Brexit ‘Permanently Damaged’ UK Economy, Michael Saunders Says
Former BOE official says calls for closer trade links with EU Comments feed debate about how to soften a worsening recession
Lizzy BurdenNovember 14, 2022, 6:24 AM EST
Former Bank of England policy maker Michael Saunders said Britain’s exit from the European Union is one of the reasons why the UK is now entering a period of austerity.
“The UK economy as a whole has been permanently damaged by Brexit,” Saunders said in an interview with Bloomberg TV on Monday. “If we hadn’t had Brexit, we probably wouldn’t be talking about an austerity budget this week. The need for tax rises, spending cuts wouldn’t be there.”
He said that the UK’s decision to leave the EU and the customs union reduced the country’s potential economic output and eroded business investment. His comments echoed the sentiment last week by the head of the British Chambers of Commerce, Shevaun Haviland, who said that British firms haven’t seen any upsides from Brexit so far.
The remarks add to growing criticism of the central accomplishment of the Conservative government, which after a referendum in 2016 decided to implement a strict break from the EU. It also feeds into debate about how Prime Minister Rishi Sunak’s should handle the economy, which the BOE says is already in recession.
Saunders, who sat on the Monetary Policy Committee until August and is now senior economist at Oxford Economics, said that Chancellor of the Exchequer Jeremy Hunt should focus on improving trade links with the EU. He also pointed toward improving education and training as ways to boost productivity, as well as fixing the rise in long-term sickness, which has driven large swaths of people out of the workforce since the pandemic.
Saunders also said that the chancellor’s fiscal statement on Thursday should include measures that avoid damaging the economy further. So far, Hunt has suggested he’ll cut spending and raise taxes to plug the Treasury’s widening deficit — delivering a squeeze on the economy at a time the economy is shrinking.
The former BOE official suggested policies included introducing a tiered system of interest rates on banks reserves, reducing tax relief for top rate taxpayers on pension contributions, closing some of the tax loopholes open to non-domiciled residents, and reducing the tax-free allowance on dividend income.
“These kinds of measures would probably have a less adverse immediate effect on the economy than raising the headline tax rates or cutting the main departmental public spending,” said Saunders.
Not much point yowling about it. Might as well crack on and make the best of it.
Sounds heavily caveated with a “probably” so it would be good to see what figures he’s actually basing this off as anything with brexit in the headline is full of partisan hot air so referring to actual numbers is sensible.
Mad that people still think imposing trade barriers against themselves won’t hurt their economy.
If you are a British firm and your business has improved then could you please raise your hand?
……Anybody?……….Anybody at all?
Can you hear me in the back there? If you are a British firm and your business has improved then could you please raise your hand?
Anybody? ……….sigh
From start to finish gbp has lost 40% off is value
Atleast the right people made some bank from it. Who cares about Joe Public. /s
Fake News! I see you in the back over there! UK is never better, the best, amazing place, I’ll tell you what, folks…
We only left a few years ago. It is far too early to say.
Also if the UK hadn’t left the EU, then the EU would have the confidence to push more of it laws onto the countries in it. Creating an EU army, contributing towards other debt and increased tariffs.
Salaries are far higher now because of it.
Having seen, internally, how the EU works. The money they spend is absolutely wasted.
Why do you think the areas that received the funding voted out?
They never understand the area and only serve to try created EU monuments in empty leisure centre and colleges which have train kids up for nonexistent jobs.
You can’t put a price of making a racist smile for 30 seconds before they remember Meghan Markle exists.
The thing is that austerity caused more damage.
Zero economic growth for 5-10 years followed by a massive setback.
The UK government isn’t perfect but they actually consult the locals to find out what they want so at least most people are happy whether the EU would make nobody happy.
News is generally localised so you will here more about it in the UK but Monday in British talks about Germanys economy that is in a worse recession than ours or the gunfights and grenades going off on Swedish streets.
Also no matter where I went it was people from London and the Home Counties telling people in the North and Wales what they want
13 comments
Brexit ‘Permanently Damaged’ UK Economy, Michael Saunders Says
Former BOE official says calls for closer trade links with EU Comments feed debate about how to soften a worsening recession
Lizzy BurdenNovember 14, 2022, 6:24 AM EST
Former Bank of England policy maker Michael Saunders said Britain’s exit from the European Union is one of the reasons why the UK is now entering a period of austerity.
“The UK economy as a whole has been permanently damaged by Brexit,” Saunders said in an interview with Bloomberg TV on Monday. “If we hadn’t had Brexit, we probably wouldn’t be talking about an austerity budget this week. The need for tax rises, spending cuts wouldn’t be there.”
He said that the UK’s decision to leave the EU and the customs union reduced the country’s potential economic output and eroded business investment. His comments echoed the sentiment last week by the head of the British Chambers of Commerce, Shevaun Haviland, who said that British firms haven’t seen any upsides from Brexit so far.
The remarks add to growing criticism of the central accomplishment of the Conservative government, which after a referendum in 2016 decided to implement a strict break from the EU. It also feeds into debate about how Prime Minister Rishi Sunak’s should handle the economy, which the BOE says is already in recession.
Saunders, who sat on the Monetary Policy Committee until August and is now senior economist at Oxford Economics, said that Chancellor of the Exchequer Jeremy Hunt should focus on improving trade links with the EU. He also pointed toward improving education and training as ways to boost productivity, as well as fixing the rise in long-term sickness, which has driven large swaths of people out of the workforce since the pandemic.
Saunders also said that the chancellor’s fiscal statement on Thursday should include measures that avoid damaging the economy further. So far, Hunt has suggested he’ll cut spending and raise taxes to plug the Treasury’s widening deficit — delivering a squeeze on the economy at a time the economy is shrinking.
The former BOE official suggested policies included introducing a tiered system of interest rates on banks reserves, reducing tax relief for top rate taxpayers on pension contributions, closing some of the tax loopholes open to non-domiciled residents, and reducing the tax-free allowance on dividend income.
“These kinds of measures would probably have a less adverse immediate effect on the economy than raising the headline tax rates or cutting the main departmental public spending,” said Saunders.
video:
https://youtu.be/MLRRjEOA_Y4
Not much point yowling about it. Might as well crack on and make the best of it.
Sounds heavily caveated with a “probably” so it would be good to see what figures he’s actually basing this off as anything with brexit in the headline is full of partisan hot air so referring to actual numbers is sensible.
Mad that people still think imposing trade barriers against themselves won’t hurt their economy.
If you are a British firm and your business has improved then could you please raise your hand?
……Anybody?……….Anybody at all?
Can you hear me in the back there? If you are a British firm and your business has improved then could you please raise your hand?
Anybody? ……….sigh
From start to finish gbp has lost 40% off is value
Atleast the right people made some bank from it. Who cares about Joe Public. /s
Fake News! I see you in the back over there! UK is never better, the best, amazing place, I’ll tell you what, folks…
We only left a few years ago. It is far too early to say.
Also if the UK hadn’t left the EU, then the EU would have the confidence to push more of it laws onto the countries in it. Creating an EU army, contributing towards other debt and increased tariffs.
Salaries are far higher now because of it.
Having seen, internally, how the EU works. The money they spend is absolutely wasted.
Why do you think the areas that received the funding voted out?
They never understand the area and only serve to try created EU monuments in empty leisure centre and colleges which have train kids up for nonexistent jobs.
You can’t put a price of making a racist smile for 30 seconds before they remember Meghan Markle exists.
The thing is that austerity caused more damage.
Zero economic growth for 5-10 years followed by a massive setback.
The UK government isn’t perfect but they actually consult the locals to find out what they want so at least most people are happy whether the EU would make nobody happy.
News is generally localised so you will here more about it in the UK but Monday in British talks about Germanys economy that is in a worse recession than ours or the gunfights and grenades going off on Swedish streets.
Also no matter where I went it was people from London and the Home Counties telling people in the North and Wales what they want