Horse and fish trading

The Brexit protest on the Thames reminded me of the final episode of Blackadder. General Melchett went into the World War One trench and said “What we need at this stage of the war is a futile gesture.” This gesture turns out to be ordering Blackadder’s platoon to mount a frontal assault on an unassailable German position, with the inevitable result seen in numerous such futile gestures on the Western Front.

The Brexiteers are good at futile gestures and slogans on buses, but sadly their level of competence and economic foresight so far is on a par with the battlefield tactics of General Melchett. The fact is that this country is now embarked on the biggest horse trade it has ever conducted with a whole range of countries including the EU. In any horse trade, just like in battle, there will always be casualties.

When the serious horse trading begins, some horses are worth more than others. The winner of the Gold Cup commands a higher price than a 15 year-old nag with a lame foot. In terms of the UK economy, I am afraid to say that farming and fishing is the equivalent of the lame 15 year-old nag, and no amount of futile gestures can alter this fact.

The combined output of farming and fishing to UK GDP is just under 1% of our total economy, compared to roughly 80% from the services sector. So when it comes to the crunch it was always going to be the case that the fishermen would be sold down the river to net a larger catch elsewhere.

The fundamental lie many Brexit voters fell for was that this sort of industrial horse trading would not harm them. It was a lie at the time of the vote and it is still a lie now. If farmers and fishermen had voted with their heads they would have voted overwhelmingly to stay in the EU. But mostly they did not do that, and they are just one element of a bigger picture. In my view the economic damage from Brexit is going to be greatest on precisely those regions and sectors most likely to have voted to leave the EU.

Logically, the best option for these regions and sectors of the country is a “soft” Brexit. This, for example, would not force us into trade deals which result in massive imports of cheap food from the USA at the expense of British farmers. But overall I fear for the prospects of the lame nag when the going gets tough.

Thursday 29 March 2018