Looming Brexit trade war will be catastrophic for Britain amid a cost of living crisis
Liz Truss becoming Prime Minister is the end of what little hope remained that the Northern Ireland Protocol Bill would be scrapped.
As foreign secretary, Truss sponsored the bill, resulting in condemnation over how it could break international law by invoking Article 16. Far less widely reported are sinister clauses in the bill that amount to blatant power-grabbing domestically.
At last week’s Prime Minister’s Questions, Truss said she would prefer a “negotiated solution” with the European Union, but if talks don’t go well I am certain the NIP Bill will return. Should the bill pass, it would be a huge betrayal of trust that will damage our international standing. It would create a massive constitutional fracture, giving ministers power to back out of the Withdrawal Agreement without renegotiation or parliamentary scrutiny.
To seek out unnecessary rows during an era of extreme economic crisis is sheer madness
Coupled with Truss’s unhelpful rhetoric about EU leaders – the absurd suggestion that “the jury is out” on whether French president Emmanuel Macron is a friend or foe during the leadership race – she is agitating for a trade war, which would further damage United Kingdom exports and hike inflation to levels beyond the 13 per cent forecast for later this year.
This penchant for picking unnecessary fights, including ramping up anti-China rhetoric, is extremely concerning for those of us who have long worried about our country post-Brexit.
Spoiling for trade wars appears to be a defining feature of Trussonomics, which would be worrying in the most benign of times. To seek out unnecessary rows during an era of extreme economic crisis is sheer madness and we’ve already seen how badly the markets have reacted to the Prime Minister’s dogma.
Yet Truss is not stopping there. As well as being deeply worried about the Protocol, President Joe Biden will have noted Truss’s continually cool rhetoric about US-UK relations. Last year, she undermined a long-standing tenet of our international policy by declaring the US-UK relationship “special, but not exclusive”. All because she was struggling to secure Boris Johnson’s promised mega trade deal with Washington.
Truss is also going after domestic institutions. Her embattled Chancellor, Kwasi Kwarteng, warned in August that something had “gone wrong” at the Bank of England, seemingly blaming inflation on independent monetary policy rather than Vladimir Putin’s invasion of Ukraine.
I have been very vocal about my concerns regarding Andrew Bailey’s appointment as governor of the Bank of England, but floating changes to the Bank of England’s mandate is extremely concerning. Politicians wanting to get involved with rates and rate-setting would be politically motivated and lack fiscal responsibility.
Any curbing of the central bank’s independent decision-making on interest rates would be damaging, with power-hungry ministers persuaded that they know best and deciding to set monetary directions.
We face similar challenges to other European countries, be that high inflation, rising interest rates and an energy crisis. Yet none of our neighbours have the added negatives of Brexit and the resulting falling inward investment.
They also do not have a new leader who is determined to make their mark by antagonising anyone and everyone. The Prime Minister, a Brexiteer convert, is twice as dogmatic as most of the heavy-handed idealogues who set the country down this path with no realistic plans.
What Truss is doing, inadvertently or not, is creating a culture of fiscal fear; a cocktail of fanciful policy that will make the UK a rogue outlier.
Six years after leaving the EU, a world-leading trading body, Truss is picking fights with the world’s largest economies, China and the US, each accounting for about 16 per cent of global GDP. I fear her stubbornness will seriously weaken the UK, leaving us even more ill-prepared for the economic headwinds coming our way.
Gina Miller, leader of the True and Fair Party.
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