Stepping away from the European Union is beginning to look like a major mistake for the United Kingdom – one with serious economic repercussions.
Michael Saunders, former policymaker for the Bank of England, cited Brexit as one of the causes behind the country’s headlong plunge into austerity measures, claiming that the national economy has been permanently damaged by the withdrawal.
Saunders went so far as to say that if Brexit had not occurred, the government wouldn’t be working on an austerity budget today, along with discussions regarding an increase in taxes and implementing budgetary cuts.
The former BOE exec added that Brexit and the UK’s similar departure from the customs union has significantly decreased its economic growth potential and the number of investments in the corporate and financial sectors.
Currently a senior economist at Oxford Economics, Saunders proposed that Chancellor of the Exchequer Jeremy Hunt ought to set his sights on improving trade with the EU, along with improving the national education and training systems to improve workplace productivity and dealing with the increase in long-term illnesses which have knocked numerous people out of employment since 2020.
That said, Saunders hopes that the fiscal statement the Exchequer plans to release on Thursday, November 17, includes reparative measures to prevent further damage to the economy. However, this is highly unlikely, as Hunt recently stated that he expects to raise taxes and curb further government spending to stop the ongoing economic deficit. Saunders and other experts feel that this will do more harm than good.
Nevertheless, Saunders suggested several potential policy changes, including the introduction of tiered interest rates on tax reserves, reduced tax relief for top-rate taxpayers on pension contributions, reducing tax-free allowances on income from dividends, and well as closing several tax-related loopholes that many non-domiciled residents have taken advantage of over the past several years.
Not the Only One
Saunders is not the only one to speak so openly about the negative impact Brexit has had on the UK economy.
Shevaun Haviland, the current head of the British Chambers of Commerce, echoed Saunders’ sentiments last week when he stated that no British business has seen any benefit from the nation’s departure from the EU.
Haviland’s scathing remarks were just the latest in a lengthening screed criticizing the accomplishments of the Conservative government, which was responsible for the country’s ongoing “break” from the EU. The criticism is expected to influence the ongoing debate on how the current Prime Minister, Rishi Sunak, ought to deal with the economy, which, according to BOE experts, has slid into recession mode.