Tuesday, 28 June 2016

5 Days After Brexit and 5 Reasons to Still be Negative

Five days have passed since the Brexit vote was confirmed and I am still struggling to find anything positive from the mess the EU is now in. It’s plainly obvious that there never was a Plan B from the government to deal with a Leave vote.

Nigel Farage has done nothing other than to be at his sanctimonious best in the EU parliament today.

How he really expects the EU to be grown up about the leave negotiations when he is berating, shouting and smirking his way through a totally misguided speech I do not know! All he is doing is winding up MEP’s even more, just what we need at this moment as a country.

Boris, or Backtracking Boris as I refer to him now, has not one idea what to do next, not a Scooby Do. It’s like he woke up on Friday morning and said “Shit.... what do we do now?”

It appears that no-one on the leave campaign has a clue and even worse no-one seems to want to stand up and lead the country in the way it has voted.

So here are my 5 reasons I’m still negative.

1  The Economy is basically going to be on hold for two years, or longer if Article 50 of the Lisbon Treaty isn’t invoked any time soon. Most businesses cannot standstill for two years. Already multinational companies based in London are moving staff to EU countries.

Reports of recruitment freezes abound and capital investments in plant and equipment are being put on hold. The economy will at best stagnate whilst we are in this period of uncertainty but UK plc is more likely go back into recession, meaning less money for the new government to spend.

Add to this the need to renegotiate trade agreements with all our export markets with no guarantee of this being completed in two years and the recession becomes more significant.

2.     The stock market reaction to all this turmoil has been dramatic and many may think it has nothing to do with themselves. Well it has a lot to do with everyone.

Anyone saving for a Pension or is in a Company Pension scheme will have money tied up in the stock markets. Pensions schemes are going to be under funded very quickly or if you have a personal pension your cash will buy you an annuity paying out less than a week ago. Basically what your retirement is going to more expensive and it’s going to be later in your life.

Will the markets recover? Possibly, but if businesses aren’t investing, growing and making profits to be redistributed to their shareholders then that recovery is going to take many years to happen.

3.     The pound has fallen by 13% against the dollar. A weaker pound will mean imports are more expensive. For example, we only produce 60% of the food we eat, as of today the 40% of our food we import will be 13% more expensive as most of it is traded in US dollars. But just think of the other everyday items we import that are going to cost more.

Oil, Gas, Cars, Electronic equipment, Clothes, Precious metals, Medical equipment, Aircraft, Drugs, Wine are all going to be 10-15% more expensive overnight. The UK just got very expensive for the basic everyday needs of the majority of the population.

4.     The UK political situation genuinely makes me sad. The lurch to the right has well and truly started. Jeremy Corbyn will surely not survive today’s vote of no confidence in him by his own MP’s, having probably resigned during the time I am writing this.

The SNP seem hell bent on leaving the United Kingdom and are literally begging the EU to accept them. Why they cannot wait for the negotiations to leave to start in earnest before creating more mayhem I just don’t know. Nicola Sturgeon is playing a very dangerous game with the future of the Scottish people.

And then there is the Tories! A party so divided it will take years to heal the wounds opened up by the Brexit vote. It seems likely an anti tory leader will be elected creating a party almost as far to the right as it was in the Thatcher era. There will not be any credible opposition (as in the Thatcher era) and this, I fear, will lead to more division and xenophobia than ever before in my lifetime.

5.     Leading on from this is the increase in racist activity against immigrants. This vote will give the far right parties all the encouragement they need to increase their agenda of hatred. News reports of victimisation of Polish families is only the start.

Immigrants have long been part of the UK’s culture and success and we have generally welcomed them with open arms over the decades from Ireland, the Caribbean, India, Pakistan and more recently Eastern Europe.

The Brexit vote is not going to mean a sudden mass departure of these people. Most have settled lives in the UK, pay their taxes and contribute to the economy in a positive way. Immigrants have long done jobs that “British” people don’t want to do.

But is this going to stop or even reduce. I seriously doubt it. Conflicts, bullying and intimidation between the far right factions and the immigrant communities will increase with very little being done to stop it.

So there you have my 5 reasons to be negative about Brexit. Despite my negativity I still think there is an opportunity to be grasped. The positive people are all saying things like, “it is what it is, let’s just get on with it and see what happens” Which I generally agree with.

However, someone has to grasp this opportunity and map out a plan for how the UK will get through leaving the EU and until the proverbial nettle is grasped I will continue to feel negative

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