Thoughts on Brexit
The Brexit vote has left me bewildered. I’m not really sure what’s going to happen (I’m not alone). I’m just writing down these thoughts to try and clear my head…
I love this cartoon. I’m not sure what the political correctness shark has to do with it — but it’s unintended genius. It’s very blackly humorous though as I suspect the deadeningly literal metaphor is exactly arse-backwards.
So what’s going to happen now? Here’s some wild guesses:
The Economy
Friday morning began with a big depreciation of the pound ending the day about 8% below the dollar. As I owe Tania a few hundred Euros it was a bit annoying. I’m not a big believer in the prescience of the markets — the night before they had rallied on the expectation of a Remain win — but I think they are right that Britains immediate economic outlook is poor. Companies aren’t going to invest or build anything in Britain for the moment. Companies already here like Nissan in Sunderland (60% vote for Leave) have big sunk costs but may need to be bribed to stay. Jobs on the brink in say Tata Steel are toast. The City jobs that the Conservatives have sacrificed all else to protect will diminish. So I guess there will be a proper recession now.
Growth in Britain over the last few years has not spread wealth evenly (thats an understatement). Whilst employment has increased these have often been poorly paid and insecure jobs. This is partly — only partly —the impetus behind the Leave vote. A recession now though will probably come with increased unemployment — as ever chiefly amongst the young. Tax receipts will be reduced, repayment of government debt will slow, austerity will be prolonged. Very late in the day Osborne and Cameron tried to spell this out by threatening their now infamous “Punishment Budget”. As with so much of the campaign this was disingenuous — as though the recession is likely the response threatened would be counterproductive. Soon though as the pound is devalued fuel bills (petrol, gas, electricity) will rise. Food bills will rise. Basically most shop bought stuff is imported (we buy goods and sell services)— and it’s price will rise. Interest rates could either fall although they cant go far (to stimulate the economy) — or alternatively rise to stabilise the pound.
Generally I’m not a big fan of those who vote in general elections for selfish financial reasons, but Brexit is personally all bad news for me. I’m legally obliged to sell my house next year and try and relocate (with Meg) on half the proceeds. Theoretically house prices should be a zero-sum game to me and like most I would like them to come down. Not like this though. Right now moving house I have calculated is just financially possible. Next year will they give me a mortgage for the extra I need to move? What will interest rates be doing? Will I be able to find a buyer? I’m genuinely anxious and unsure.
Then there’s my job of course. I work in science. About 10% of UK research funding comes from the EU. We put in about $5.4B to the science budget and get back about $8.8B. I don’t expect this difference to be replaced during a time of prolonged austerity. Cynically I don’t expect much of it to be replaced at all.
Politics:
Dearie me…where to begin.
Leavers: Let’s start with “Leavers” as this theme follows on from above. In the two days since Friday two central promises of their campaign seem to have been abandoned. The most shocking to me was the MEP Dan Hannan appearing to accept that an agreement on access to the free market from outside the EU would require free movement of EU citizens. I’m not sure he speaks for his friends in UKIP (more on that later) but I presume he is at one with Boris Johnson and Michael Gove.
Second there was the less surprising abandonment of the promise to spend our £350m contribution to the EU on the NHS. I say less surprising because 1) we don’t contribute that much — it’s <£250m, 2) We then get a lot of that back for farming, regional development, science etc, 3) We will have to replace that before the NHS 4) then we’ll have to pay a similar amount if we are to get access to the single market (it’s going to be more — of course it will be more). Nonetheless it was headspinning to hear first Nigel Farrage and then Ian Duncan Smith disavow that they had ever promised this…
In a messed up sense I understand where IDS is coming from. Such a promise always had the ring of what Stephen Colbert coined as “truthiness”:
The quality of stating what one wishes or feels to be true instead of what is actually true.
It was ridiculous to the point that I doubt most leave voters believed a word of it, or rather they would like to believe it in a visceral if not actual sense. IDS is claiming that’s not a real promise just a sort of emotive campaign ploy — and that doesn’t count.
At this point let’s split the Leavers into Tories and UKIP and talk about them separately because I think their paths are going to diverge. I have nothing to say about the now irrelevant Labour MPs Gisela Stuart or Kate Hoey.
Tories: Of the two promises above the first is likely to prove a bigger albatross for Tory Leave politicians. I’m sure that their political opponents will try to batter them for their absurd £350m claim but for the reasons above I don’t think most Leave voters care. They do seem to care about immigration. If it really is their intention to leave the EU but bargain into the single market with free movement then this will be bitterly resented as a betrayal. My fear is they will realise this and avoid it by accepting a truly awful negotiated deal for Britain that emisserates the UK economy.
If they call an election it is absolutely imperative that the labour party not allow them to fudge this issue. They absolutely must be forced to state what their migration plan is. We must have clarity on what the EU demands for a single market agreement. It would be a vast strategic failing of the magnitude of the just gone Remain campaign to let them off the hook. If the choice is free movement or single market access they must be made to state their choice before the election. DO NOT MISS THIS OPEN GOAL.
Regardless of this I expect a recession and you have to hope that this will cost them. I’m sure this is partly why the Tories want a quick election — to get a mandate before this really bites.
UKIP: I wouldn’t expect UKIP to go along with a free movement agreement. For them to exist they must push for a more draconian immigration settlement with the EU than the other parties. Otherwise what is the point of UKIP?Natural justice would suggest that their support too should be damaged by the coming recession — but perhaps I’m being too logical.
It’s bizarre actually that I have no idea what their actual plan for leaving the EU is. It seems that for both the Tories and UKIP this is either because it’s a secret, they cannot agree, or they just don’t know.
Which is worst?
Labour: David Cameron is responsible for Brexit not Jeremy Corbyn. Blaming him is either an emotional spasm or cynical opportunism. According to polls about 64% of SNP voters went for Remain and about 63% of Labour voters. Every party has to have big personalities that enthuse different constituencies throughout the country. Jeremy Corbyn has a constituency amongst the young and the metropolitan that he successfully enthused. The failure to get out the Labour vote in the North-East, Wales and Midlands is not on him. Others were posted missing or like him failed to rush the stage that the media had set up for Cameron vs Boris.
That said … he should go now. I’m in broad agreeement with his politics and so are the majority of the party. But he’s a terrible politician. Right policies, wrong guy. He simply fails again and again to put his ideas across competently. He is leader because the other candidates were awful and nobody liked their politics.
In any case he cannot form a cabinet now. It is profoundly undemocratic, profoundly wrong, that the MPs should be able to mount such a putsch against the will of the membership. But if the MPs won’t follow him then that’s it.
Now remember what I said the previous candidates were awful. I don’t just mean their policies. To name a few: Chuka Umunna, Harriet Harman, or Caroline Flint are rubbish communicators. I have no doubt they may perform better in PMQs but they have less appeal to the lost Labour voters than Corbyn. Wrong policies, wrong guys. Tom Watson, Andy Burnham or Alan Johnson are OK. Perhaps there is a better candidate to emerge. But they need to get a move on as the Leave parties actual leave plans are in total disarray and they need to formulate a united plan of attack to damage them.
Lib Dems: LOL. Who cares.
SNP: Here’s an admission. I stayed up to watch the first hour or so of the BBCs referendum coverage. The first time I actually considered what might happen to Gibraltar when (if?) we leave the EU was when their 96% remain vote was the first announced. After the vote all sorts of issues that received little attention have finally come to the fore. Will Ireland and N. Ireland need a border?(err … Yes) What happens to Britain's border control in Calais? (it’s toast) What about the agreements that we recently made to curtail in-work benefits for EU citizens? (it is null and void) What happens to the ~1 million British people living abroad, mainly in Spain? ( I dunno?)
Strangely too it seemed of little concern to the Leave campaigners that the Scottish would be unlikely to go along for the ride. I’m sure most don’t really care.
In Britain the SNP are the only party that look in control. To their credit the SNP campaigned strongly for Remain and cannot be accused of opportunism in any way. It would be wrong to say they have a plan. But they know what they want to do and can plainly tell the public without dissembling what they mean to do.
Can they stay in the EU though? They need the EU to be willing and they need to secure and win a referendum? Two years ago the EU were unwilling to encourage break up of the UK by granting easy access. Perhaps circumstances are different or perhaps they still wont want to encourage their own unruly separatists (I’m looking at you Catalonia)? But in addition they lost the referendum over fears on the unanswered questions of currency. They also had to contend against a majority of independent experts who rightfully pointed to the economic risks and possible poorer trading position of an independent Scotland. If the next few years go as I expect in Britain as a whole — then I dont think those arguments will have much weight in a second Scottish referendum. The currency question will remain the major stumbling block.
I reckon it’s 50/50 whether Scotland stays in the EU now or possibly wins some special constitutional settlement (greater freedom of movement). Long term I think independence and EU membership is a certainty in my lifetime.
The EU
I haven’t talked until just now about how the EU will respond to Brexit. They will decide the terms on which we access the single market. It has been argued that they will be nice to us because they will want to continue selling lots of stuff to us. This is ridiculous naivety — just laughable stupidity. Look how they have acted in the past few years. The Telegraph Brussels correspondent has put it best in a long article you should read:
The EU Will Treat Britain Like Greece
I warn you, sit down and maybe have a strong drink before you read that article.
Petitions
Finally I note there a number of petitions to annul the referendum. Forget it, it’s not right and it won’t happen. It’s a waste of your time and more importantly your political credibility. There is a small chance EU exit will fall apart when the EU defines the terms and the government wavers from actually committing Seppuku. This is why we keep hearing about Article 50 the mythical countdown that no-one in the Leave camp wants to start.
It’s a small chance though. We are led by vainglorious fools who would rather push on to disaster than admit their mistakes. We need to save our energies to win the coming election and spell out the realities — then perhaps offer the EU terms to the public as a second referendum. That’s the only hope.
Good Luck.
PS Just a final comment on the Remain campaign… did you see this video?
Nope, almost no-one saw it. That’s possibly the most famous celebrity in Britain (plus side-kick 1) with probably the greatest cultural pull among Leave voters arguing for Remain. It was released a couple of days before the vote and sank without trace. That’s how pitiful the Remain campaign was.
