What are the problems of Brexit?
Many people insist that all the Project Fear experts were wrong, and lied about our prospects. Now, 3 months after the vote, what problems have appeared, and what is looming if we continue?
- Sterling has fallen from $1.50 to $1.31, a fall of 13%. That means that all our exports are 13% cheaper, and all our imports are 13% more expensive. We import a great deal more than we export, so it means that we will have higher inflation.
- Our credit rating has fallen, so any money we borrow is at a higher repayment rate. We currently owe 1,600 billion pounds, so debt repayment is very expensive
- Overseas companies have stopped investing, as they don’t trust that their investment is safe with us.
- Overseas travel has become more expensive as the pounds buys less.
- Already there is a huge rise in racist violence, and many EU citizens have already left. The problem is that the ones that have left are the productive ones: the wastrels beloved of the Daily Mirror living on benefit will be here for as long as they can.
Future problems, if and when article 50 is invoked, and then more so when we leave the EU.
- The economy will shrink
- Many service companies will leave and relocate to the EU. Our GDP is 80% services, especially financial services in the City (where most people voted to remain). Already HSBC have said they have stopped hiring, and will move 1000 jobs abroad. JPMorgan have said they will move 4000 jobs abroad. And these are not low paid clerical jobs: these are high tax paying individuals.
- Many manufacturing companies will relocate. Car manufacturers such as Nissan and Honda are here because the cars produced here have unfettered access to markets in the EU. It’s not just a question of the level of tariffs, but of all the other barriers that we have successfully removed, so we can take advantage of the 4 freedoms, freedom of movement of goods, services, capital and people.
- Even the simplest trip abroad will be subject to more admin: I don’t know how often you have travelled abroad, but if you have been to the US, South America, India etc, it is very troublesome getting visas. You’ll need to get a visa just to go to Paris for the weekend, potentially (unless they make special arrangements, and why would they?) Already our immigration service is hugely overstretched. The simplest of visas can take several months to organise. I have an Indian friend who wanted a simple visa extension to work here for another 6 months. He was told it would take 2 weeks: at worst 8 weeks. After 8 weeks he was told that they haven’t even started processing his application.
- The Northern Ireland border. If we leave, all EU citizens will have the right to settle in Ireland. Once they are legally there, they will have free access into Northern Ireland (unless you plan to build a Trump wall). From there anyone can go from Belfast to Liverpool without crossing an international border. Currently any EU citizens settled here pay tax: those who come via the Northern Ireland route will disappear into the black economy.
- EU citizens have been shown to pay more in tax than they take in benefits, so we will have less tax to spend. Forget the empty promise of 350m to the NHS: we will have less to spend on them not more, and we are highly likely to carry on paying a levy to the EU. The closest parallel is Norway who are not in the EU. They have a special arrangement. They have access to the single market, (which 62% of Brits said in a recent survey that they do want). In order to get that they have full freedom of movement, (which 79% of Brits said they expected to be removed when we Brexit) they pay around the same levy as us (which 89% of Brits don’t want), have more EU citizens living there per head than we do (no comment), and have no say on drafting laws. They are different from us in that they are smaller and have high oil income, but they are the closest parallel, and one that Boris said we should follow.
- Certain types of work will be very hard to fill. We have large numbers of Eastern Europeans picking fruit and veg. It’s very hard to get British workers to do seasonal work, as they would lose their benefits in the months they were not working. The EU citizens go home. Also there is a high level of Europeans doing care work, which Brits will often refuse to do as it is seen as demeaning. So if you restrict immigrants to the desirable ones (non EU immigrants can since April come in only with a firm job offer paying £20,800 at the start, rising to 35k in 5 years, so there is a precedent), then Brits will do all the menial work and will provide the underclass. Need the loos cleaned? Find a Brit.
- we have 43 years of laws on the statute book, and each one will have to be redrafted if we leave.
- We will need to build new trade agreements with every country with whom we trade, and we have almost no trade negotiators working for us as we haven’t needed them. And if you were a foreign country, would you give a better deal to a country of 65m people than to a trading block of 508m?
- As an exercise in democracy, we have chosen to elect 650 representatives to govern us, in a process that has taken centuries to develop. Then you take a poll in which a large proportion of voters don’t understand the implications of the question, and insist that that overrules the elected MPs? How healthy is that for our democracy?
- You want to give more power to a Parliament in which we were in real danger of choosing between Corbyn and Leadsom as PM. Seriously?
And what is the benefit of leaving the EU?
- “National Pride”
- “Taking Back Control”
- “Sovereignty” whatever you think that means