As an addendum to yesterday's blog I just want to add that although the British economy has not suffered post-Brexit referendum, as many (myself included) had thought, I wish to ponder briefly on the reasons for this in the light of the rising costs of leaving the EU as I detailed yesterday. Whilst it's not a bad thing that the Bank of England has upgraded Britain's growth forecast for next year (from 1.2 to 2%, with EU Commission following suit) I do think it has the unfortunate side effect of fooling the nation into thinking that (Phew!) 'it's all going to be ok!' 'The sky won't fall in' and 'we will survive after all!'
Well yes, Britain will survive, of that there is no doubt! But in what form long term? Realistically, what are the prospects?
Perhaps the first thing to say is that I'm not an economist or a politician. I'm a layman; an interested layman but nonetheless still just a layman. But I think that this optimism is somewhat misguided and that, despite the upgraded forecasts, I believe the powers that be are sitting there, fingers crossed and hoping that, in the end, it will all turn out fine. However, I think this post-referendum mini-boom, for want of a better expression, is a merely a bubble that is just waiting to burst.
Let me explain.
Since June 23rd the value of Sterling has dropped significantly so allowing UK exports to be more competitive and, as one might expect, many companies are reporting increased sales and business as a consequence. The problem is that the EU receives by far the biggest share of UK exports (when compared to any other trading bloc: 44% in 2015) and I predict (figures are not yet available) that 2016 will see that share rise substantially, and therein lies the problem. Once Brexit is done what happens to those exports? To those companies? As I detailed yesterday the chances of the UK staying in the single market are hopelessly slim and it cannot be expected that deals from outside the EU with the rest of the world will come anywhere near replacing that massive proportion of UK trade. Thus, the bubble bursts, does it not?
The WEF predicts that the UK will drop out of the G8 by 2030 to become the 10th largest economy in the world (from 5th in 2015), but that (although it doesn't specify so) is if the UK remains as the UK. I firmly believe, as does Tony Blair (see his speech to Open Britain last Thursday), that Brexit facilitates the chances of Scotland breaking up the union. If this does happen then the UK will not exist anymore. The 12th biggest economy in the EU (Scotland) and the 2nd biggest in the UK will be out on their own, as will England, Wales and NI. England (or more pertinently) the UK will go from being a group of nations punching well above their weight to relative flyweights almost overnight. Where the UK was once a world power both Scotland (by association with England) and England (as part of the UK) will become virtual non-entities the day after the union breaks up.
Call me stupid; call me naive, but it's just bloody daft to me that we have somehow contrived to get ourselves into this ridiculous situation.
Lord Kerr of Scotland, former British representative to the EU, speaking yesterday in the Brexit debate in the House of Lords, said that he believes Article 50, once triggered, is not irrevocable; that the process could be stopped, if we so wished, and 'there would be nothing the EU could do about it.'
I sincerely hope that before we consign the UK to the bin of economic obscurity that commonsense prevails. If it looks likely that the deal we would get from the EU is a stinker (and that does seem more and more likely) then I do believe it should be brought back to parliament and indeed, to the people themselves, for us to say 'yea' or 'nay' to said deal.
And if that means revoking Article 50 at a late stage then so be it. By then (2 years hence) elections will have taken place all over Europe and the EU will either be much stronger or more vulnerable depending (largely) on what has taken place in those elections. Either way, the EU needs massive reformation. It needs to be much more democratic, more accountable, more approachable, more open, in short, it needs to start functioning more like a true governing body rather than just being an unapproachable, faceless load of time wasting bureaucrats! It needs reforming from the bottom up, in a every aspect to be able to move forward and meet the challenges Europe faces in the 21st Century. Maybe a close run Brexit 'thing' is the push it needs to change, but change it must (however, the mechanics and specifics of that change are for another day).
But for me, and hopefully for the UK, a Brexit at any cost is NOT the way forward! This must be considered further and more carefully once the road has been explored. This is not undemocratic I believe, it is just commonsense!
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