CapX, June 16, David Paton
The mood music from negotiators Michel Barnier and David Frost does little to suggest that the EU and UK will agree a trade deal by the end of the year. And so we face yet another Brexit-related deadline, this time the June 30 date by which any extension would have to be agreed. The government has now formally ruled out an extension, which means the possibility of the UK leaving transition without a trade deal is very real.
The conventional wisdom is that leaving without a trade deal will hit exports, economic growth and jobs and, coming on top of the economic hit due to coronavirus, many businesses will not be able to cope. Hence the pressure building on the Government to agree an extension.
But there is another perspective. One of the biggest problems caused by the anguished Brexit process has been the uncertainty faced by businesses and potential investors. A transition extension would not solve any of the underlying issues, rather it would put them off for a year till we face another deadline. In other words, we would simply have an extension to business uncertainty, the last thing we need in the current situation.
All of these factors are highly relevant to voters in the so-called “Red Wall” ex-Labour seats in the Midlands and North. They elected Boris largely to “get Brexit done” and new polling done for the Centre for Brexit Policy suggests they voters in these seats haven’t changed their mind, with 51% of Red Wall voters saying there should be no extension. Critically, the CBP polling shows that as many as 35% of the voters who switched from Labour to the Conservatives in the 2019 election would be less likely to vote Conservative in the event of an extension, a point which will not have escaped the notice of Boris Johnson and Dominic Cummings.
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