UK cost of living crisis breathes new life into old Brexit battle
With an inflation rate of just over 9%, the United Kingdom is more or less in the same boat as the United States and the European Union. But the UK’s cost of living crisis is having a unique effect: stoking the 6-year-old Cold War over Brexit. Opponents of Britain’s departure from the EU say support for reversing Brexit can only grow.
“We’re seeing consistent polls right now showing a consistent majority saying we should join the EU,” Richard Hewison of the small Rejoin EU party told Marketplace. “I think things can only accelerate further in that direction.”
Hewison said pressure on UK household budgets had been intensified by the strong Sterling plummets following Brexit vote, which made imports into the UK more expensive. He said the remedy is obvious.
“The pound would gain significantly against other currencies if we were to join the EU,” he said. “That would of course take a lot of the pressure off the cost of living crisis, because the price of inputs into the system would come down.”
But another strong supporter of the EU, Professor Peter Holmes of the UK Trade Policy Observatory, pointed out that opinion poll majorities in favor of reinstatement are still too small to justify another referendum.
“There is no evidence in the polls that reinstatement is an option any prudent politician would want to take,” Holmes said.
However, he certainly hasn’t given up hope of a return to the European fold.
“There are intermediate steps we can take to finally join the EU,” he said.
Holmes has write a paper suggesting a way to mitigate what he sees as the worst effects of the UK’s departure from the European Union: the hassles and higher costs that UK exporters and importers now face when dealing with the bloc .
He points to a provision in the trade and cooperation agreement with the EU that allows for a five-year review that could allow the UK to harmonize its regulations with Brussels in specific areas to reduce bureaucratic burdens imposed after Brexit. . Holmes believes that gradually the UK could regain closer economic proximity to its biggest trading partner. This should appeal to some joiners and might appeal to some Brexiters as well, as it does not imply full integration in the short term.
But pro-Brexitist Prof Patrick Minford of Cardiff Business School strongly opposes any attempt to bring the UK back into the regulatory orbit of the EU.
“The whole basis of the Brexit vote was to return to autonomy. That was really what Brexit was about,” Minford said.
He also insisted that the cost of living crisis had nothing to do with Britain leaving the EU.
“It has everything to do with COVID and how different economies have responded to it,” he said. “The UK is actually well placed to curb inflation because it can remove all the high tariffs the protectionist EU imposes on imports from the rest of the world.”
Although its inflation rate is not significantly worse than that of the United States or continental Europe, the United Kingdom seems to be facing a more marked economic slowdown.
The Organization for Economic Co-operation and Development has provided that UK will have zero growth next year, the worst performance for a developed country. Joiners blame Brexit.
But Brexiters are saying, “Stay tuned. New debt crisis looms in the euro area. We are much better off the block.
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