Brexit Bulletin: The Great Unmentionable

(Bloomberg) --

What’s Happening? The first budget after Brexit resolutely refused to talk about Brexit.

Rishi Sunak had plenty on his plate. When the new chancellor stood up in the House of Commons today he needed to outline a robust response to the escalating coronavirus crisis. By Wednesday morning, 456 people in the U.K. had tested positive for the virus and six had died.

Sunak needed little encouragement to keep silent on Brexit. The defining issue of recent years was thus notable by its virtual absence from his first budget. Instead, he unveiled a blizzard of policies:

• A 30 billion-pound ($39 billion) emergency spending boost
• The biggest jump in borrowing since 2013, and the largest tax-and-spending giveaway since 1992
• A promise the National Health Service will get “whatever it needs, whatever it costs,” with a 5 billion-pound emergency response fund available immediately for public services.
• An increase in the threshold for paying National Insurance
• A freeze on fuel duty for another year and the cancelation of a planned rise in beer duty.

There was no mention of any help for businesses as they grapple with the upheaval of Brexit. The Office for Budget Responsibility did note that Brexit has cut potential output by 2% (or about £40 billion) and brought business investment to a standstill since the referendum.

The question now is how Sunak will pay for all his largesse. Growth projections for 2020 were cut to 1.1%, with the OBR pinning that revision on the impact of government policy—Brexit to you and I. In any case, those forecasts will need further revision to account for a virus-induced slowdown.

Earlier, the Bank of England kicked off budget day with an emergency interest-rate cut and further measures aimed at keeping banks lending so U.K. business can keep turning amid the Covid-19 disruption.

Whether you believe Brexit is done or far from it, the drama that is British political life isn’t going away yet.

Beyond Brexit

• Britain’s strategy to beat the virus? Keep calm and wash your hands. 

• Disgraced movie mogul Harvey Weinstein has been sentenced to 23 years in prison.

• Greta Thunberg wants climate activists to find other ways to protest, with large crowds being discouraged in order to curb the coronavirus outbreak. 

Brexit in Brief

Talks in Trouble | Negotiations between the U.K. and the European Union over their post-Brexit relationship are at risk of being delayed by the coronavirus. 

Points of View | The virus outbreak is putting recent political crises—particularly those in Britain — into perspective, writes Tom McTague in the Atlantic.

Feeling Left Out | The U.K. government has been urged to implement a “meaningful, comprehensive and transparent process” for the devolved administrations to influence Brexit talks.

French Connection | Many Britons living in France are still in the dark about what Brexit means for their lives. 

Missed the Mark | Michael Gove was so pleased with his attempt at humor during his appearance at the Committee on the Future Relationship with the EU, he poured water over his own phone. 

Want to keep up with Brexit?

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To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

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