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Sunday 19 January 2020

Sajid Javid Approves Economic Suicide

All those voters who backed the Tories last month and whose livelihoods are dependent on trade with the European Union may have thought that alleged Prime Minister Alexander Boris de Pfeffel Johnson would reward their trust by not rocking the Brexit boat too harshly: there would, surely, be as little friction in trade as possible, not too much divergence from EU rules and standards. That trust now appears to have been misplaced.
This can be deduced from what Chancellor of the Exchequer Sajid Javid has just said on the subject of EU rules and divergence. His discussion with the FT has been interpreted by the Guardian as “Javid comments on non-alignment with EU prompt warnings of price rises”. That is bad, but more ominous is the sub-heading “Chancellor’s remarks represent ‘death knell for frictionless trade’, experts warn”. Oh dear.
Here’s what Javid said: “There will not be alignment, we will not be a rule taker, we will not be in the single market and we will not be in the customs union - and we will do this by the end of the year … We’re … talking about companies that have known since 2016 that we are leaving the EU”. As the Guardian observes, “His remarks will be seen as confirmation of a strategic departure from Theresa May’s deal in which she envisaged close alignment with the EU, in an effort to reduce friction at the border for traders”.
Worse is this snippet: “they will alarm business leaders in key sectors including car manufacturing and agriculture who fear the price of non-alignment will be more complex trade barriers for those who export and import with the rest of the EU”. CBI Director General Carolyn Fairbairn warned “For some firms, divergence brings value, but for many others, alignment supports jobs and competitiveness”. That’s putting it mildly.
Claire Walker of the British Chamber of Commerce put it more directly: “uncertainty around the extent of divergence risks firms moving their production elsewhere”. Small wonder the likes of Richard Murphy respondedJavid knows  he’s setting out to blight the economy, and is doing it anyway”. David Schneider reminded Javid of his Brexit volte face: “I wish Sajid Javid would read this brilliant explanation of why ending alignment with the EU is such a terrible idea by - *checks notes* - Sajid Javid”. There was more.
Seb Dance, who correctly noted that Nigel “Thirsty” Farage’s pants were on fire, added “You may as well just set fire to Britain’s economy and be done with it. Bathe in the warm glow as businesses and people’s livelihoods disappear, all so the Tory Party can be united. Brexiters promised ‘frictionless trade’ not economic arson”. Former Labour MP Anna Turley mused “Sajid Javid has completely backtracked on this today. They lied. Again”.
That was on Bozo telling Nissan that they would be “protected”. The same Nissan that has manufacturing facilities in mainland Europe. Toyota has them in Spain. BMW - owners of the Mini and Rolls-Royce marques - could up sticks and produce in Germany. VW could take production of the Bentley Bentayga SUV to Slovakia, where equivalent Audi and VW models are built, more or less tomorrow. Vauxhall’s UK presence hangs by a thread.
New Tory MPs are looking for investment in their parts of the country. But their Government doesn’t appear to want to keep the investment that is already there.

And once one car plant goes, more will follow. How’s that Tory trust looking now?
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Anonymous said...

It isn't an exaggeration to say anyone who trusts the tories is an utter mug.

And if said manufacturers do actually unbolt their production plants and shift them to Europe - well, the warnings were made years ago. Vote far right in haste, repent at leisure.

The knock-on socioeconomic effects would be catastrophic. Not that the Bozo gang could give a shit about anything or anyone but their barrow boys and girls selves.

Anonymous said...

Oh, wouldn't that be a supreme irony - Rollers and Bentleys being built in Germany. As for the new Northern Tories - you voted for this, suck it up when all you've got left is call centres.

grim northerner said...

Who benefits from 'no deal'?

R B Trage said...

"Who benefits from 'no deal'?"
Well, very rich people who 'sell short' can make a sizeable sum of money from collapsing company share prices. See: https://www.youtube.com/watch?v=3wdg9__Oq9w&t=1s

Sam said...

Anon 12.28 is correct- if you trusted the current crop of Tories you deserve everything you get. The problem is everyone else suffers as well. And for their false use of the name "Conservative Party" they should be hauled up for breaching the Trade Description's Act.

GCU Grey Area said...

An interesting thought experiment; what would the press do with Javid if he was Labour's Chancellor?

My guess is they'd crucify him for having been on the board of Deutsche Bank at an 'interesting' time in their history back in the 2000s.

But he isn't, so they don't.

grim northerner said...

I find it hard to believe that a few financial spins are pulling all the strings, can't rule it out either.