Boris Johnson and Rishi Sunak should level with the public that Brexit has scarred our economy – iNews

When Rishi Sunak appeared before MPs today, it was inevitable that the cost of living would dominate. He was at turns both combative and defensive, as he tried to account for just why his mini-Budget had had such a negative reaction from the public.

The Chancellor fended off ridicule for filling up someone elses car for a petrol pump PR stunt, and doubled down on his key decision not to do more on energy bills in his Spring Statement. When asked about fresh gas and electricity rises in the autumn, his answer lets wait until we get there- sounded as much a rebuff to Boris Johnson as to his Labour critics.

But it was when Sunak was asked about Brexit that he looked most uncomfortable. When quizzed by two Tory MPs on just why the UKs trade had plunged by 15 per cent since 2019, much lower than other advanced economies, he suddenly was lost for words.

Whereas he had every statistic at his fingertips when grilled over his focus on pre-election tax cuts, the friendly fire from his own side on trade seemed to discombobulate him. The cost of living he could handle, the cost of Brexit he couldnt.

Asked if he had expected such a big drop in trade when he had argued in 2016 as an unknown MP for Vote Leave, he replied: Forgive me I dont have the numbers in my hand or in my head.

At first, he claimed that the Covid pandemic made things just too complicated to disentangle. The big drawback with that was the independent Office for Budget Responsibility (OBR) had last week done just that.

Its 245-page assessment concluded that UK trade as a share of GDP had fallen 12 per cent since 2019, two and a half times more than in any other G7 country. In his own evidence to PMs earlier, OBR chief Richard Hughes referred to the consequences of Brexit in being a less open economy.

It gets worse. The OBR forecasts productivity the very thing that drives the economic growth that we all rely on will be 4 per cent lower over the next 15 years. Growth itself will be hit by 4 per cent, double the damage caused by coronavirus pandemic.

Eventually, Sunak did admit the damage: Without a doubt we are changing our trading relationship with the EU and that means a different set of controls. And that will obviously have an impact and that Im sure is a big part of the reason why this [drop in trade] is happening.

Its no wonder the Chancellor looked so uneasy. Whereas Covid, global oil prices and the war in Ukraine are all global events out of our control (and factors he relied on to defend his tax rises), the trade figures suggest that Brexit is a self-inflicted wound.

No major party or politician is offering to turn back the clock, but what is the Governments answer when all these facts are put to it? And, given the Chancellor opted to back Leave, shouldnt he be singing its economic benefits from the rooftops?

Well, Sunak mentioned Brexit just once in his Budget speech last week, and that was in the context of a small VAT cut on solar panels. In his Budget and Spending Review last October, the B-word wasnt uttered at all. In his Budget in March 2021, he did at least have something, as he unveiled eight new freeports and suggested new trade deals would be a boost.

But on those freeports, the OBR says bluntly: We have assumed that the main effect of the freeports will be to alter the location rather than the volume of economic activity.

And on much-trumpeted new trade deals with Australia and New Zealand, the OBR watchdog is damningly downbeat: None of the new free-trade agreements (FTAs) or other regulatory changes announced so far would be sufficient to have a material impact on our forecast.

Sunak again sounded uncomfortable when he was asked by MPs if the UK was becoming a closed economy rather than an open one. The benefit of new trading relationships takes time, they dont happen all overnight, he said.

Although the UK has seen a big drop in imports from the EU (with all the implications that carries for free trade and growth), Brexiteers take some heart from some changes.

A fortnightly ONS survey published last week showed that more than half of UK businesses that had changed their supply chain had switched to more domestic, British sourcing since the end of the Brexit transition period in January 2021.

Could Sunak deliver another Brexit bonus, by replacing the cash the EU sent to our poorer areas with something more generous Unfortunately, the new UK Shared Prosperity Fund is actually worth less than the 1.3bn a year that was spent when we were members of the EU.

What about the biggest Brexit boast of all, that the 350 million a week not sent to Brussels would be spent on the NHS? Jacob Rees-Mogg and others claim that somehow Theresa Mays 2018 NHS settlement delivered on that promise, but the UK hadnt even formally left the EU then.

In fact, Sunak and the Cabinet repeatedly stress that the reason they are whacking up taxes next month (via the health and social care levy to increase National Insurance) is to fund the NHS. That suggests the Brexit dividend is not after all funding our health service (in fact the NHSs funding sources are totally unclear once the levy is meant to shift to social care).

Many Brexiteers will rightly point out that theres no point re-interring all the debates from 2016. Yet the Chancellor so far has little concrete to show how he will use Brexit to boost the economy. Sunak produced a Tax Plan to cut taxes last week, which was skinny enough. There is no Brexit Plan at all from the Treasury.

A Benefits of Brexit paper produced by the Cabinet Office in January had a grand total of two pages on financial services and one page on international trade. Rees-Mogg is reduced to crowd-sourcing from readers of The Sun his ideas for Brexit opportunities.

Sunak often tries to persuade the public that hes a straightforward kind of guy. We are honest with people, I think people respect that honesty, he said recently. Yet so far, neither he nor Boris Johnson are being honest about the economic costs of Brexit. Even more strangely, theyre not doing much to plan for any upsides.

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Boris Johnson and Rishi Sunak should level with the public that Brexit has scarred our economy - iNews