Irish Times view on Bank of England’s stark Brexit assessment
Impact on Ireland would be devastating if worst case scenario materialises
The evidence to date is that Tory Brexiteers are unmoved by the Bank of England’s stark warning and the same applies to the opposition Labour Party which remains committed to voting against the deal.
The truly appalling consequences of a no-deal Brexit for the people of the United Kingdom and the entire island of Ireland were spelled out in unambiguous terms by the Bank of England during the week. This authoritative view about the impact of the worst-case scenario should serve as a wake-up call to MPs ahead of the critical House of Commons vote on December 11th about whether to ratify the deal struck by Theresa May’s government with the European Union.
The evidence to date is that the Tory Brexiteers are entirely unmoved by the Bank of England’s stark warning and the same applies to the opposition Labour Party which remains committed to voting against the deal. The frightening aspect of the bank’s estimate is just how quickly the economic cost could be inflicted if the UK crashes out of the EU next March with no withdrawal agreement. GDP is forecast to fall by a massive 8 per cent next year with an immediate collapse in the value of sterling. The impact on Ireland would be devastating.
Despite the warnings, May’s opponents argue that a better deal can still be negotiated at the 11th hour. This looks highly improbable. EU chief negotiator Michel Barnier has stated clearly that the deal on offer is the only one available. Given that any changes would have to be approved by the governments of the remaining 27 EU member states, it certainly looks as if the choice facing the House of Commons is a straightforward take it or leave it.
In any case there is no consensus among the MPs opposed to the deal about what they want to see in its place. The Brexiteers want a much looser free trade arrangement with the EU while most of the Labour MPs favour closer ties. What the Labour leader Jeremy Corbyn really wants is anybody’s guess.
The feeling in Westminster is that the deal will be voted down on December 11th but, assuming all other options are also likely to be defeated, there is an expectation that it will come back for a second and final decision shortly before or shortly after Christmas.
However, there is no knowing what precisely will happen if the deal is formally rejected by the Commons. The Labour Party is unlikely to get its wished-for general election and the party is already shifting its focus to the demand for another referendum. A so-called people’s vote is a perilous road to go down and could conceivably lead to the worst kind of no-deal.
A Norway-type deal to keep the UK in the single market appeals to moderate MPs of both parties but it is also fraught with difficulties and, again, it is doubtful if there is a majority for it. The reality is that if May’s strategy is rejected, a no-deal outcome at the end of March is a real possibility. And the consequences of that are stark.