As Conservative Party members vote for the next UK prime minister — the one who will maybe, possibly, finally take Britain out of the European Union — they face a depressing choice: neither of the candidates is prepared for the role, and neither will create any ‘Brexit dividend’.
The frontrunner is the well-known columnist Boris Johnson, former mayor of London and former foreign secretary – both public roles in which he attracted criticism and controversy. His rival, current foreign secretary Jeremy Hunt, has not been free from controversy either.
But they have more than controversy in common. They both made unrealistic promises regarding Brexit, and attempting to fulfil them risks pushing the economy into a deep recession.
Jeremy Hunt promises to “engage with” European Union leaders in August to push for an alternative withdrawal deal, which presumably will be better than the one Theresa May took two years to negotiate.
He doesn’t say, though, how exactly he will get hold of the EU leaders in August — a month when most politicians of continental Europe (and of the UK) are either sipping cocktails on the beach or hiking in the mountains. In Europe, any serious business should be concluded before summer. It is worrying that a man who claims he’ll get a better Brexit deal doesn’t know that.
Failing that, Hunt promises to cover the cost of tariffs on farming and fishing industry exports in the case of a no-deal Brexit with money from the UK taxpayer. He doesn’t seem to have a clear plan for other industries that will be hit, and in particular for the services sector, which currently makes up the bulk of the British economy.
He made other promises as well, for instance cutting corporation tax to 12.5% from 19% and increasing spending on defence. All amount to around £40 billion, according to Reuters.
Boris Johnson’s promises are even more strident. For a start, he told fellow Conservatives that a hard Brexit would make more money available for the government to spend. He may have vaguely remembered something written on the side of a bus, but things are not that simple.
Boris Johnson’s spending is a bit more modest, according to calculations made by Reuters, but it still runs in the tens of billions of pounds. He has promised to spend around £31 billion on tax cuts, public sector pay rises and better education.
Besides, he has said that if Britain leaves without a deal, it would not pay the money it had pledged to contribute to the EU before the Brexit vote, totalling around £40 billion.
But while such promises serve their short-term purpose – that of pleasing the voters by telling them what they want to hear, rather than the unpleasant truth – over the longer term they deal a heavy blow to the UK’s credibility in the eyes of investors.
Already, the pound has suffered and foreign investment in the UK has fallen to the lowest level in six years. The pound is at risk of losing even the diminished role it was playing in the make-up of international reserves, if investors lose confidence in the UK’s willingness to keep its promises.
And if the pound weakens even further after a hard Brexit, it is unlikely that British exporters will benefit from the tailwinds they felt while the country was still in the EU. Tariffs are likely to be imposed on UK products, whereas services exports will be curtailed by regulatory barriers.
During their campaign, the two candidates can promise whatever they want. But when it comes to delivering on those promises, they, as well as their voters will have a rude awakening.