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BANK of England governor Mark Carney claimed today that Britain’s decision to leave the European Union had cost “tens of billions of pounds” in lost economic activity.
Investment is failing to recover because of the “Brexit effect,” the banker said, blaming the referendum decision for the economy being “about a percentage point less in size than we expected.”
He said that the “deeper” any post-Brexit relationship with the EU was, “the better it is going to be over time for the economy.”
TUC general secretary Frances O’Grady agreed that new GDP figures showed “the lowest growth in five years, with working people suffering a big hit.
“We need a Brexit strategy that prioritises jobs and protects frictionless trade, with single market membership on the negotiating table,” she urged.
But Communist Party leader Robert Griffiths pointed out that wages have fallen in real terms since the financial crash of 2008, while “Britain’s capitalist class has refused to invest substantially in productive industry for decades.”
Mr Carney should have learnt from the referendum result that the public won’t swallow “scaremongering” about the disastrous results of a Leave vote, Mr Griffiths argued.
Doug Nicholls of Trade Unionists Against the EU said Mr Carney’s assessment was “so inaccurate as to be irresponsible.
“Several key factors historically led to deindustrialisation and a lack of investment in British industry and all were directly related to EU membership.
“The EU subsidised companies to move production plants overseas.
“Long-term interest rates for manufacturing investment used to be lower than general interest rates, but that disappeared as EU regional plans prioritised financial services in the UK,” he told the Morning Star.
“EU procurement rules required tendering for services across the EU, losing Britain thousands of projects that would have led to investment.
“And single-market membership effectively demanded privatisation of public services, leading to debacles like Carillion, which only invests in its own shareholders.
“We are suffering the whiplash of 40 years of EU membership, which have run down productive industry and seen our country choose the cheap route of importing heavily exploited labour rather than upskilling our own workforce.”
Mr Carney’s made his comments as Labour’s shadow Brexit secretary Keir Starmer tore into the Tories for their “double-speak” over a transitional deal with the EU.
Chancellor Philip Hammond said at Davos yesterday that changes to the EU-British relationship would be “very modest,” only to be slapped down by No 10 after an angry backlash from MPs.
Brexit Secretary David Davis followed up today with a speech in Middlesbrough, claiming that Britain would be allowed to sign independent trade deals during the projected two-year transition out of the EU from 2019, adding that there were “no differences” between him, the Chancellor and the PM on the question.
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