The economy is struggling but all ministers have to say is 'Yeah! Britain! Brexit!'

The troubles of UK plc are just beginning. Right now it is still part of the largest free trading zone ever created on planet earth

James Moore
Chief Business Commentator
Wednesday 26 July 2017 10:14 BST
Even realists like Chancellor Philip Hammond will pay a price if the Government continues down its current path
Even realists like Chancellor Philip Hammond will pay a price if the Government continues down its current path (PA)

No real surprises in the latest official data on the economy: it’s doing every bit as badly as expected.

UK plc crawled ahead, with growth of 0.3 per cent in the second quarter of 2017. About the best that can be said for the number is that it’s marginally better than the miserable 0.2 per cent recorded in the first quarter of the year.

The nation has moved from the fast lane of the Autobahn, where there are no speed limits, and where it was outpacing every developed economy, to the hard shoulder.

No wonder the number crunchers at the Office for National Statistics (ONS) were moved to describe what we’ve seen this year as “a notable slowdown”.

Of course, as one Michael Gove once opined, “Britain has had enough of experts”.

So the ONS comms people can rest easy in their Swansea homes. No one outside of the Treasury will pay any attention to that comment.

Here’s why they should: we’re still in the EU. What that means is that, for now, we still have tariff-free access to the biggest single trading zone that has ever been created on Planet Earth.

If this is how things look now, when companies have only just started prepping for the UK crashing out, just imagine what life will be like when we actually are out. Did I hear someone whispering “recession”?

By the way, so much for the Brexit-weakened pound helping manufacturers and offering an alternative source of revenue for UK plc, with half the City of London in the process of moving to Deutsche AG or La France SA. Services were the only bit of the economy to show any sign of life. Were it not for that overly dominant sector the numbers would have been worse still.

Staffline, a recruiter, is part of it. It has just issued a relentlessly upbeat trading statement. The company appears to be the sort of employer that requires staff to shout “Yeah! Staffline!” while high fiving every colleague they meet.

But, between the lines, even it has a few concerns about the future. “We have seen a reduction in the number of EU citizens coming to the UK (since the EU referendum) and an increase in those returning to their homelands,” it warned, in an uncharacteristic bout of sobriety.

The company is meeting what it calls “historic fulfilment rates” which, in English, means it’s just about managing to keep up the pace when it comes to placing people in jobs. However “it has become increasingly hard to maintain this”.

Making less jobs available might be one way of addressing its issue. That certainly seems to be the Government’s favoured long term approach. Given the damage that ministers seem intent on doing to the country’s economic prospects, it’s a strategy that might actually work. Trouble is, voters aren’t likely to view it as a winner.

But I’m probably crediting ministers with having more ability to think strategically than they have shown do date.

In reality, the response of too many of them to issues like that raised by Staffline, to data like that just produced by the ONS, and to just about anything else connected to their only policy of note, is to do what Staffline workers do when they bump into each other at the company’s Nottingham Offices. They high five while crying “Yeah! Britain! Brexit!”. Presumably they think that doing so might distract people from the fact that it’s all going wrong in a hurry.

The Tory press is doing the same thing, and so are at least some of the voters who ticked X in the box next to Leave without really thinking through the implications.

Their numbers will start to decline very quickly if those GDP numbers don’t improve soon. That spells trouble for ministers not named Philip Hammond, and most likely for realists like him too.

The Government needs to come up with something a bit better than “Yeah! Britain! Brexit!” and it’s not altogether clear that it is capable of doing so.

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