WORRYING signs of the Brexit effect are starting to appear. The economic impact of Brexit was always going to take time to filter through. Not only has the UK not left the EU yet, the two-year-old Article 50 process has barely begun, and none of the details of the final deal are known.
The Tories would have us believe that the fact we haven’t gone over a cliff yet demonstrates a masterful management of the economy by May’s government.
Brexiteers would claim that the forecast economic impact of leaving the single market was always exaggerated.
In reality we are only at the very start of a long process.
The full effects of hard Brexit won’t be felt for a while yet. However, recent data has displayed some worrying signs, reflecting what may be in store for the future.
This week, inflation rose to its highest level in over three years, up to 2.7 per cent from 2.3 per cent in March, caused largely by the falling pound raising the price of imported goods, and forcing companies to put up prices.
On Wednesday, we learned that real wages have declined for the first time since 2014.
This is a toxic combination which is going to hit already struggling families hard over the coming months.
For all the rhetoric about caring for the “squeezed middle”, the Tories are pursuing a hard Brexit at the cost of consumer spending.
And when families have less money to spend, this has a knock-on effect on jobs and investment and can quickly become a vicious cycle. Price changes have just started to filter down the supply chain and affect people’s behaviour.
For all his faults, Chancellor Philip Hammond is no fool. He gets this fundamental principle of economics.
Which makes his continued dedication in pursuing a hard Brexit in the face of all the evidence even more baffling.
Is the trade-off between the economic uncertainty of Brexit and the settling of an internal party struggle worth it for the Tories?
Their claims to be the party that delivers for people who “work hard and play by the rules” might be fooling people so far, but it’s hard to see how this will be sustainable in the face of job losses and falling living standards.
It’s becoming increasingly clear that they’re simply winging it when it comes to managing the economy.
And here we can see a pattern. They winged it when it came to calling a referendum they didn’t want to win, likewise on retaining membership of the single market, and, possibly worst of all, they are winging it when it comes to securing the rights and the future of EU nationals living in the UK.
As we head to the polls on June 8, Theresa May’s mantra of “strong and stable government” rings hollow.
“Weak and winging it” would be a more accurate tag line.
With every irresponsible and arrogant decision that this Tory government makes over Scotland’s economy, the case for taking matters into our own hands becomes ever stronger.
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Callum Baird, Editor of The National
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