Carmarthen, Wales – 31st July 2017
Many Brexiteers take a simplistic, restricted and shallow view of how the UK will leave the European Union.
It’s to be expected.
Some people are both wilfully ignorant and certain of their beliefs, even though their beliefs are no better than reactionary and rationalised prejudice, socialised absurdity and tidy-minded incongruence.
It’s to be expected.
People dream of a new-day dawning in which the UK will regain its ‘rightful’ place in the world. Not as a senior member of a very European family, but, as a free and bold, strong and stable nation, that will stand shoulder-to-shoulder with the ‘other’ world super-powers of our day.
It’s to be expected.
After Brexit we will be unchained from our subservient, humiliating and debilitating position within the EU.
We are sold a long litany of trolled tripe and onions by those who act as the foot-soldiers and canon-fodder for the economic sponsors and backers of Brexit.
Today we are slaves. Tomorrow we will be free to trade with the great trading blocks of the world, such as New Zealand, Australia and the Afrika Bambaataa and Universal Zulu Nations.
Of course, all of this is absolute boloney. It’s totally baseless and delusional optimism. In short, it’s a fraud.
It’s like as if the only things that were stopping us from being a great and influential country again (England, Wales, Scotland and Northern Ireland, not forgetting Gibraltar) were the likes of Mrs Merkel, who is busy constructing a European Reich; the faceless Brussels bureaucrats, who have it in for England; and, Mr Juncker’s secret stash of kryptonite, that he surreptitiously uses to make us all feel weak, self-obsessed and dopey.
However, like it or not, this short-sighted, self-harming and somewhat eccentric fantasy of a brave new world of Brexit is frankly untenable. We can’t just pick up our ball and go home. We can’t just lock the door and walk away. We can’t just throw a hissy-fit and step off the planet. Things don’t work that way in international politics, diplomacy and trade.
What people need to understand, even if they are averse to the idea, is that the road to the UK’s complete withdrawal from the EU is fraught with Homeric complexity, massive and numerous risks and incalculable costs. Brexit is a million cans of worms thrown into a massive and densely inhabited venomous-snake pit. And we plan to sort all of that out, by ourselves. Because it’s ‘a piece of piss’.
What a bunch of Charlies we’ve become.
This is not based on idle speculation and opinion, but evidence. Evidence that is inescapable. Evidence that has been known for years. Evidence that cannot be brushed aside in a fit of nationalistic hubris, ignorance and bluff and bluster.
As a member of the EU we have many rights, but we also have duties and obligations, ones that we have freely signed up to, without any coercion from any other party. We also have obligations. Something else that many people forget about.
People may choose to stick their jammy-fingers in the ears and go la-la-la, but that’s not going to solve anything, nor will it play any part at all in the negotiations to come. No matter what some people will say to the contrary.
It’s to be expected.
Complexity. First there is the necessarily complex nature of European Union law. It’s not just a question of incorporating EU laws into UK law, as EU laws will have control mechanisms, institutional interfaces and references to legally-binding foundational-documents and agreements that are specific to the European Union and to its 28 member states.
EU laws are regulated through both the institutions of the EU and the member states.
So, what do we pretend to do?
Do we want to be outside of the EU, still have EU laws on our law books, with all that that entails, and continue to use their institutions?
I don’t think so, Sir.
There are more than four decades of common community law to sort through. It’s a massive task in its own right, the likes of which we have never seen or experienced before. We don’t currently even have the right quantities of skills, knowledge and experience to take it on. Simply stated, it could take decades of intense and detailed work in order for all of this to be unwound, and there are no guarantees that the outcome will be satisfactory.
It’s a million cans of worms at the bottom of a pit of venomous snakes.
It’s not good.
Uncertainty. Uncertainty is the enemy of business and the curse of investments. Uncertainty has an impact on business growth, strategy and planning. Uncertainty negatively affects the economy.
Uncertainty is what Brexit has brought.
From Welsh farmers to City bankers, Scottish engineering and English marketers, the message is the same. Our future is uncertain.
Uncertainty produces additional risks, including the risk of economic recession. Uncertainty is already causing downsizing and relocation, and those companies in the UK who haven’t already made their move are more than ever actively looking at their options – especially post-Brexit. In the past many firms chose to locate in the UK because the UK is in the EU. This is always worth repeating, because the impact of losing those investments in the UK will be massive.
The uncertainties are many and varied, here are just a few:
- How will Scotland react to the UKs eventual withdrawal from the EU? Will they choose the route of full independence and membership of the EU?
- What happens to the situation in Northern Ireland and their current non-border with the Republic of Ireland?
- With reduced income, lower values assets and reduced tax raising capacity, how will we sustain the NHS, Social Security, Infrastructure and Education?
- What streamlining of the public sector would have to take place? Who would this affect?
Risks. The hazards of Brexit are many and varied. These deleterious and toxic risks will not only affect the UK, but also the EU, and in doing so will negatively impact global trade and commerce. This is going to happen, the question is how to limit the impacts and their consequences. In short, if things go very badly, Brexit will just fall short of an open declaration of war. So, managing all risks is an absolute imperative.
Exiting the EU will be bad for all concerned, the question is, what we can do to limit the damage, short of exiting from Brexit – the most sensible option.
The biggest risks centre on the uncertainty of so many Brexit factors.
We are also uncovering new and significant factors, at a fair old lick, as we go through the Brexit process. Factors and facets that many of us didn’t even realise existed before we started on this hare-brained journey into the unknown.
The fundamental risks are also closely associated with the badly-drawn definitions of the major challenges of Brexit, and naturally, the lack of any adequate government strategies, policies and plans to address those significant challenges.
Here are some examples of risks that Brexit will throw up:
- Anti-immigration sentiment played a major role in getting people to vote for Brexit. However, any changes in immigration policies will affect the employment policies of international businesses.
- There are clear risks that Brexit will essentially undermine ongoing trade negotiations. The restriction on the movement of labour, a measure that many Brexiteers had hoped for, is not compatible with membership of the European single-market.
- When the President of the USA indicates, in typical grand-standing style, that there will be major trade deals with the UK, can we take that talk on face value? Or are we simply being incredibly naïve in our almost baseless optimism.
- According to some, Brexit will be detrimental to the USA (and NATO) in its confrontation with Russia. We have already witnessed greater presence of Russian armed-forces in the Baltic Region and also the Mediterranean Sea.
- As mentioned previously, Brexit will lead to a global economic downturn, possibly leading to globalised recession.
- Brexit could easily lead to a crisis in emerging markets. Brexit will necessarily force a political reappraisal of risk across Europe and especially in emerging markets, which could lead to increased financial and currency volatility, especially as financial positions are rapidly unwound.
Economic costs. The Bank of England estimates that by 2019 business investment in the UK will be 25% less than pre-referendum forecasts.
The potential impact on future productivity and growth in the UK cannot be underestimated. Much of the trading in financial instruments carried out in the EU goes through London, primarily because the UK is in the EU, but also because the City is arguably the most important international financial centre outside of the USA and a very convenient one-stop shop. The City’s continued attraction within the EU rests on the need for both pillars. Take one of them away, and it loses its amazing competitive edge very rapidly. Naturally, this comes with an economic cost. There are alternatives to the City, and they will all be within the scope of the EU. In future, instead of just going to the City, clients will quite possibly have to use a pick and mix of financial centres, such as Dublin, Frankfurt, Zurich (although not in the EU) and Paris. Maybe, there is also a massive opportunity for Spain, who have a very skilled workforce in the financial sector, primarily in Madrid and Barcelona, and some of the best economists and financial analysts and financial-sector executives around. Their gain, our loss.
Of course, as well as affecting banking and financial services, Brexit will also hurt the broader economy, including but not limited to the auto industry; construction and manufacturing; and, the food and drinks sector.
As the FT put it “Rarely has there been such a consensus among economists, as there is on the damage that Brexit will wreak on the British economy.”
The political costs of Brexit. The first local political fallout from the Brexit vote was the resignation of the Prime Minister, David Cameron. However, in the grand scheme of things, this event was not so significant. Nothing compared to the damage that Brexit has done to the UK’s international reputation, especially amongst our EU partners.
We are a large and influential fish in a large and powerful union. But, we are giving up all of that to be just another fish in a very large and complicated fish bowl. Effectively we are turning ourselves into shark bait. Let’s make no mistake, just as major world leaders can talk about special deals and closer relations, they can just as easily send us to hell in a handcart, especially if we don’t play ball with them, the way they want us to play.
Can you really imagine that President Trump, or anyone else in a position of power (and you can include Reagan, Bush senior, Clinton, Bush junior and Obama in that) would make concessions they don’t really need to make, or which don’t result in giving them some sort of strategic, tactical and operational advantage? For the POTUS, the number one priority has always been and will always be, the USA. Same for Moscow, Beijing and Tokyo.
So, you ‘pays your make and takes your choice’. Chlorination chicken sandwiches, hormones-in-a-bap and genetically-modified comfy-car seats, anyone?
It’s all incredibly naïve. It’s like as if our exit from the EU will catapult us back into the bright and prosperous past. Back to some fictional good times – that have never existed – when god would never let the sun set on the glorious British Empire, being unable to trust the English in the dark.
Which in a way, is quite funny, because that’s exactly what I think about some Brexiteers and their dangerously dopey dyed-in-the-wool ideas.
However, first let me explain something about the EU and the UK’s veto.
Simply stated, the Council of the EU has to vote unanimously on a number of matters which the member states consider to be sensitive – i.e. no support from the UK, and it doesn’t happen. For example:
- Common foreign and security policy (with the exception of certain clearly defined cases which require qualified majority, e.g. appointment of a special representative)
- Citizenship (the granting of new rights to EU citizens)
- EU membership
- Harmonisation of national legislation on indirect taxation
- EU finances (own resources, the multiannual financial framework)
- Certain provisions in the field of justice and home affairs (the European prosecutor, family law, operational police cooperation, etc.)
- Harmonisation of national legislation in the field of social security and social protection
Obviously the UK cannot veto decisions in areas where it has secured opt-outs, such as euro monetary policy.
This all goes to show that we are not in-fact dictated to by faceless Brussels bureaucrats, nor are we as UK subjects taking back any democratic rights with Brexit, that were never given away in the first place.
In fact, we are giving up our liberties and rights as European Union citizens, in exchange for something that is far less benign. This is far madder than trading in your Samsung, Apple or Sony smartphone and going back to a black mechanical land-line Bakelite telephone. It is stark raving bonkers.
It’s like being a fly on the wall.
“I want to go back to the pre-common-market times, when we had proper black and white TVs, like god would have wanted us to have. With vertical and horizontal hold. A tele with a tube so deep that it served as a convenient base for a plastic Spanish flamenco dancer on a doily, and a Majorcan donkey with psychedelic eyes and a Mexican sombrero. These were times in which you could get a decent ghostly signal just by hooking up a wire clothes-hanger to the aerial plug. TV’s you could smack into doing the right thing, without any need of a technician or internet.
We had proper programmes then, and none of this disrespectful filth and foreign porno rubbish that they put on the box these days. But, you know what? Tell that to the youth of today, and they’ll just laugh in your face… They have absolutely no respect for their elders”.
The other political cost of Brexit has been the negative effect on Britain’s political reputation. We are telling 27 member states where to stick their European Union, and of course, they don’t like that message. Brexit is an unwanted distraction for the European Union, and we are entirely responsible for this mess that we have created, a mess which all of the European Union has to deal with.
The social costs of Brexit. The prospects of the potential social costs and consequences of Brexit are truly soul-destroying. The outcomes from this temporary lapse of reason and attention may have catastrophic social consequences.
Brexit has clearly divided the UK unlike anything else in the last hundred years. In my opinion it is divisive, nasty and delusional.
Among other things, Brexit will bring about:
- Greater threats to employment and social policy
- Greater threats to regional development
- Greater threats to funding of education, higher-education and research
- The further weakening of the positions of the more vulnerable groups of society
- The end to the pillars of Social Europe, including the chance to benefit from the European Social Fund, European Global Adjustment Fund and the European Fund for the Most Deprived
It will however allow the EU, without or meddling and blocking, to introduce measures such as:
- The EU wide regulation of bankers’ bonuses – which the UK refused to support
- A Financial Transaction Tax – which the UK vehemently opposed, even though it was a popular proposal across the EU and elsewhere
- A EU Wide Youth Guarantee to eliminate long-term unemployment among young people – something which the UK also opposed and which could not be introduced as a result
Without the EU there will be less guarantees for workers, students and pensioners in the UK. This is precisely what the big-time backers of Brexit wanted, and it looks like the people who voted for Brexit will deliver this to them on a plate.
Political grandstanding, incompetence and lack of leadership
So, there you have it. A plethora of uncertainties, risks and costs. None of which we would be contemplating now if it weren’t for the absurd political fetish that is Brexit.
Just take a look at the government. What we have there is a lack of coherent, cohesive and practical Brexit strategies, policies and plans. If we were to do the right thing, then none of this would represent a problem.
Without Brexit there would be no Brexit uncertainties, no Brexit risks and no Brexit costs.
And what’s the right thing to do?
Simple. We exit Brexit. Yes, you got that right first time. We exit Brexit and put our temporary lapse of reason down to an extended period of British eccentricity and battiness. We could then continue as a full member of the European Union, like as if nothing had happened for the last couple of years.
Our friends, allies and partners will understand.
That’s all folks!
In my view, Brexit is sheer madness, and if the members of the Conservative and Labour parties cared about their country more than they did about their party and their seats then we would have exited from Brexit months ago.
That said, I am sure that given time, enough of us will come to our senses, and call the whole thing off.
Europe: Strength through Unity. Let’s move on!
Many thanks for reading.
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The Conceit of Remainers: The Brexit Boloney Continues – https://goodstrat.com/2017/08/01/the-conceit-of-remainers/
Brexit is Bullshit – https://goodstrat.com/2017/07/26/brexit-is-bullshit/
Can Ruth Davidson save the Tories? – https://goodstrat.com/2017/07/23/can-ruth-save-the-tories/
Martyn Jones, citizen of the European Union – https://goodstrat.com/2017/07/14/citizen-of-the-european-union/
Post-truth, Fake-news and Big Data – https://goodstrat.com/2017/02/02/post-truth-fake-news-and-big-data/
BREXIT: Where’s Theresa May’s Plan B? – https://goodstrat.com/2016/09/10/brexit-wheres-theresa-mays-plan-b/
UK POLITICS: The Jeremy and Owen Show – https://goodstrat.com/2016/09/09/uk-politics-the-jeremy-and-owen-show/
BREXIT: Theresa May’s Catch-22 – https://goodstrat.com/2016/09/08/brexit-theresa-mays-catch-22/
BREXIT: The Martyn Jones Solution – https://goodstrat.com/2016/09/03/brexit-the-martyn-jones-solution/
Spanish General Elections: Power, Pride and Politesse – https://goodstrat.com/2016/05/01/spanish-general-elections-power-pride-and-politesse/
Can you read? Be honest, now – https://goodstrat.com/2016/03/15/can-you-read-be-honest-now/
Lions led by donkeys: Intense mediocrity in uncool Britannia – https://goodstrat.com/2016/03/02/lions-lead-by-donkeys-intense-mediocrity-in-uncool-britannia/
The Martyn Jones Solution: From Strategy to Jihad – https://goodstrat.com/2016/02/21/the-martyn-jones-solution-from-strategy-to-jihad/