Author Archives: wizzouk

Apologising in Europe

So yesterday I went over to Rotterdam for the first time on a business trip. Multiple times in conversation with new contacts or even strangers on public transport I found myself apologising on behalf of the UK. I should have worn my ‘don’t blame me I voted remain’ t-shirt! The minute they find out I’m British, the topic of Brexit comes up with a mix of shock, dismay or even resentment. This is from Dutch people.

The sense of ‘we should be pulling together not pushing apart’ was a clear undertone and that we as Britain seem to be turning out backs on our closest trading partners and friends. It was quite depressing and a feeling of shame that we weren’t able to counter the tide of disenfranchisement (and the misplaced blame of the cause!), xenophobia and anti-EU sentiment being fostered in the run up to the referendum.

We’ve done real damage to our standing in the world, the economic impact hasn’t even really started yet but is going to be very real indeed. There’s still time to change course and reverse this exercise in self-harm.

Word on the street is there is likely to be a general election later this year. The government is incredibly weak after all. The only real national alternative is the Liberal Democrat’s (loads of people have been joining here – https://www.libdems.org.uk/membership-faqs), who will campaign on a promise to reverse Brexit. Or individual campaigners on a case by case basis, especially if they are supported by moreunited.co.uk and make it clear their position on staying in Europe.

It’s not over yet, and we will continue the fight!

UK Leaves the EU – The Day Everything Changed

So what a day today has been so far.  First, forgot to put phone on silent and woke up at 5am to the BBC news app alert.  Having gone to bed around midnight with the pound soaring and markets basically believing the exit poll, I had no idea what I was to wake up to.  Suffice to say that I didn’t get back to sleep afterwards.  I could not, and still do not, believe what I am seeing.

I thought reason would win out against emotion, misplaced anger and the serious misrepresentation conducted in this campaign. Ignorance has prevailed. Now we reap what we have sown. We tried our best but it was not enough.

When I say ignorance, I do not mean the out voters who had legitimate arguments for why this could be a good way out.  I mean the many who turned this into an emotional single issue vote, or a “protest vote”.  Many are now regretting this.  I have yet to see any well-argued cases for why we should leave the EU.  Most descend rapidly into slanging matches and calls to give reasoned arguments against ours just fall on deaf ears.

Economic Impact

Uncertainty will prevail for a protracted period.  We’re not going to invoke article 50 until October at the earliest it seems and then at least 2 years of negotiation follow.  This is an optimistic timetable by any existing trade negotiation standard.  One thing markets, business and investors hate is uncertainty!

By 6am the Eastern markets suspended trading after the Nikkei crashed 8%. We dropped to a record low of 1.32 against the dollar. Gold surged and the FTSE opened 9% down. The bankers will be making huge profits from betting against the markets.  Some of this has recovered, but as US markets open shortly we will see the full fallout.  Many FTSE stocks are still very down, including banking and finance shares.  This is ordinary peoples’ pension funds going down the pan rapidly.

It is not scaremongering to advise people to expect job losses.  Think if you were a US company with a whole world of companies to go to.  Do you give the deal to the UK with all that is going on, or choose a competitor not subject to the uncertainty?  I have already been told by a number of people that their companies are really worried as they rely heavily on the EU for their business.

Oh but we’ll get free trade deals, they need us more than we need them surely?  Don’t be so sure.  The stakes just got much higher than a few percentage points of export stats.  The entire future of the EU is now at stake and there will be significant pressure to exact a heavy toll on Britain leaving as a deterrent to others following suit.  France, Germany and others are having big problems with the rise of their nationalist parties.  That will need to be countered and acting tough on us will be a key part of that.

I expect a correction in the housing market as foreign investors propping up the market pull away.  Bear in mind the value of their investments against other currencies just dropped 10% or so.  It would be folly to pay anywhere near market rate for a house right now with the real risk of a market fall.   Many may welcome a sharp drop in house prices but fail to see the consequence it has on an economy built on house prices going up.  People trapped in negative equity stop spending.

Cameron Gone, UK Next

David Cameron has now gone.  That was inevitable in the event of this result.  He has gambled big and lost even bigger.  Our entire country’s future is now at stake and this will be his legacy. At least he is staying short term which has helped stabilise things.  Had he resigned outright that could have been very damaging.

Ultimately this gamble did not have to be taken.  These sorts of decisions should not be put to a public vote where emotion will outweigh reason.  It is why we elect representatives after all.

The UK will likely not be the UK for much longer, as was inevitable when Scotland voted overwhelmingly to remain and is now facing the prospect of being dragged out the EU against its will. There will be a further independence referendum and this time it will be a resounding yes vote.  Northern Ireland is in a similar position and you can expect calls for reunification.

Europe is in Jeopardy

Most worrying is the unravelling of decades of Europe coming closer together.  It is highly likely the EU project is now doomed and it’s destruction will be a self-fulfilling prophecy from the leave campaign.  Britain leaving will trigger a series of calls for other countries to have their own referendum.  This is already happening in France and the Netherlands for example.

How have we allowed decades of social progress to come to this?  How have we let populist right wing figures hijack a nation and tell them that all of this is Europe’s fault?  We have a lot of work to do!

The Lies Unravel Already

So far this morning we have had Nigel Farage say the £350m figure is a mistake.  That’s the figure that was the feature of a great deal of the Leave campaign’s literature and was slapped all over the side of their battle bus.  If a company ran it’s advertising in this way, the ASA would be all over them.  Within hours a main feature of their campaign has been reneged on.

Now we have another member of the leave campaign Daniel Hannan saying immigration won’t fall.  So that huge issue that was as focus of the leave campaign is also unravelling!

Now the consequences

Now to face reality and battle the consequences.  Will this be short lived as some say?  Short term pain long term gain?  I hope so but doubt it. This is not going to be resolved quickly and one thing people hate is uncertainty.

A big sorry to the rest of Europe and the World. We tried our best to fight with reason. We had the backing of the vast majority of the thought leaders in the UK. It wasn’t enough to battle the populist right and convince people that Europe is not the source of our problems.  The shockwaves of this outcome will now be felt across the planet.

Next our electorate will be ignoring other experts and seeking the advice of celebrities as to whether to vaccinate their children.  Oh wait…

A sad day :(.

On the Brexit Vote – Why I’m IN

I thought it was about time I started a blog, and on the request of one my friends, I’m starting by reposting a response I made to some “brexiters” commenting to a post I made talking about the younger and/or more educated you are, the more likely you are to vote to stay in.  It’s a debate focused much more on emotion rather than reason right now.  The young are also much less likely to vote, so they need to get out there and register to have their voice heard.  Anyway onwards…

The mess we are in is not caused by the EU. The 2008 depression (which we are still in btw, judging by our performance against historical recovery of GDP say in comparison to the 30s) was caused by a global shock when the sub-prime housing bubble in the US collapsed. A sign of how interconnected all economies have become in the globalised economy. A good film to watch on that is “the big short” which really lays it out well. The debt bubble in the UK followed suit rapidly, as for some reason people thought it was ok to borrow 100% of a property value at 7+ times their earnings. Irresponsible lending and a standard of life we simply couldn’t afford. We are still feeling the results of this debt crisis.

You want to know some other things you are more likely to be the older you get? More likely to rely on inherent prejudice and stereotypes to make judgements. In other words, less tolerant of change, more likely to be homophobic, xenophobic, and otherwise hold outdated bigoted views.

The other stat is the more educated you are the more likely you are to vote to remain, regardless of age. It’s not a simple topic but the problem is it will be reduced to such by the sensationalist plays on both sides of the argument. Some people will reduce a highly complex socio-economic and geopolitical discussion into “too much immigration”, ignorant of the overall facts of immigration and how we benefit from it both in terms of contribution to our economy, but also the many millions of Brits who live abroad in the EU, something made much easier by our membership.

When it comes to trade I can tell you having had to build a small business and learn from scratch how to import and export both products and services both within the EU but also with a big market such as the US, the process and red tape is chalk and cheese. Just trying to understand the “Tariff” (a huge book of all the tax codes and rates when you want to import or export something to countries outside the EU) is an absolute nightmare. With the EU, there can be complexities of VAT, but none of the Tariff malarkey and all the forms to fill in and arguments to have with customs on the US side to let them release stuff where you may have filled something in slightly wrong.

Yes we won’t just stop trading with the EU overnight. There will be a protracted period of negotiation where uncertainty will prevail. Know what doesn’t like uncertainty? The markets. Foreign investors. People on the other side of business deals choosing whether to buy from a UK company or a German one. Expect the value of the pound to plummet and stocks to fall. I wouldn’t put parity with the Euro out of the question and $1.20 against the dollar.

This won’t be an issue about whether we will just stop buying BMWs. We might impose a 10% duty on German cars for example in response to a duty on UK financial products, as a hypothetical situation. That is unlikely to have much of an impact given BMWs are relatively premium products anyway. However, there are much bigger political issues at play. The rise of their own nationalist parties will make the likes of Angela Merkel not in any mood to show leniency to the UK. They will be worried about further break up of the EU and act strong to prevent others getting the idea they should go that way. There is a bigger picture and trade is just part of that. I know how I would act were I in her shoes. The best we could hope for is something slightly better than Norway. That won’t deal with all the issues people seem to think are the problem: immigration, EU regulation, EU laws.

There are so many mistrusts and misrepresentations of stats being flown around (indeed by both sides but the heavier weight of the misrepresentation has definitely been on the leave side according to statistical agencies). Scaremongering is happening both ways and I am just concerned that we will walk away from an institution of peace and prosperity for Europe for nearly 50 years, because we will look too narrowly at what is a highly complex issue.

The world is far more interconnected and a very different place to 1973. You cannot isolate yourself from the globalised economy. If you want to deal with the hugely growing companies and markets of the world, you want to be part of a larger power bloc not going it alone. You really think China or India want to deal with a market of 60 million ahead of a market of 740? They have a billion each btw and their economies are growing fast!

People need to think much bigger than our little island and realise we are no longer the empire we once were. We need to be close to our allies and establish closer economic and political ties. Now is not the time to go it alone and think everything will be ok. We need to change the system from within and do our bit to improve it, not walk away because things have got tougher!

For further reading, check out http://blogs.lse.ac.uk/brexitvote/2016/05/27/dear-friends-this-is-why-i-will-vote-remain-in-the-referendum/ for an professional, academic and well referenced piece.  Does a better job than me 🙂

And finally if you are eligible to vote in the referendum but have not registered.  DO SO!  REGISTER TO VOTE NOW!