By Sam Gyimah
As our currency plummeted last week, politicians were remarkably quiet. In normal times, a catastrophic slide in the pound would send a shockwave through Westminster.
An emergency cabinet meeting might have been called. The chancellor might have made an announcement, calming markets and reassuring the public.
But these aren’t normal times. Over the past three years, politics has been increasingly blind to the concerns of ordinary people.
The Brexit debate is stuck on abstract constitutional issues such as the backstop. While they are important matters, the relentless focus of public discourse on them means that we are in danger of forgetting about the lives of real people.
Westminster is gripped by a fanatical race towards a cliff-edge Brexit and nobody is stopping to think about the impact it would have on the everyday lives of the people we serve as politicians.
The falling pound is a perfect example. Consider for a moment the situation we find ourselves in. Three years on from the referendum, and sterling has now fallen by 15% against the euro. On average, the pound is now weaker than it was at the height of the financial crisis.
We cannot dismiss this as a trivial bump in the road. This matters, because a no-deal Brexit is now the number one threat to the value of our currency, a fundamental factor driving this nation’s prosperity. And as Paul Johnson, director of the Institute for Fiscal Studies, put it, a fall in the pound “makes those of us whose earnings or savings or investment income is in pounds poorer. Period.” We simply cannot ignore the impact this is having on people in our country.
August is the most popular month for Brits to go on holiday. This month, some 6 million people will go on a trip to a eurozone destination, during which they will spend an average of £574 per head, according to the Office for National Statistics. Whereas before the referendum, that would have bought a UK holidaymaker €740 on the continent, now the same spend is worth only €620. In other words, our politicians’ dangerous no-deal Brexit musings have cost travellers more than £100 per person already.
Supermarket prices are also likely to be affected. Much of what we buy relies on products from the EU – purchases that British importers make in euros. A simple look at UN trade data of what we import from the eurozone reveals that the plummeting pound has already meant an increased import cost each year of £200m on French wines, £50m on fruit from Spain, and £40m on chocolates from Belgium.
This is a real and present shock to UK businesses. But most importantly, it is consumers who will likely end up paying the price for this. Increased costs in imports for products will be passed on to customers. That means higher prices in the shops.
The sheer drop in sterling since 2016 is only a taste of what’s to come if we continue down the destructive route of a no-deal Brexit. Instead of continuing the ideological race to the cliff edge, we have a duty to consider the interests of ordinary people. Leaving people worse off financially is a Brexit outcome nobody supports, whether they voted leave or remain.
That is why it is time to think again. A fresh democratic mandate is key to this big decision, now that the circumstances have changed so much. This is why we must hand the choice back to the British people in a referendum
Sam Gyimah is the Conservative MP for East Surrey.