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Brexit Scaremonger? Damn Right I Am.

I drafted this in March 2016, 3 months before the fateful referendum where 52% of people who voted (only 37% of the UK electorate) decided we would be better off leaving the EU. 

I am posting this 3 days before the 2019 general election following 3 years of destructive turmoil. I hope the 37% think it's been worth it now that even worse is surely to follow.


Lemmings are cute Scandinavian rodents who follow each other over cliffs. I am convinced this is what is happening to the UK. We're being brainwashed by either disingenuous or simply ignorant politicians, none of whom have ever sold anything in their tedious committee-ridden lives, to believe that we will be better off if we leave the EU. They're asking us to blindly follow them over a cliff.

It's a bit like the mystery why a dangerous moron like Trump is building a following in the USA. Soundbites work. 'Make America Great Again!' What American wouldn't cheer for that?... until they think a little harder and ask themselves: How, At what cost (socially and financially), and more intriguingly perhaps, why great 'again'... back to what era? If Trump wants to reverse time to some wondrous golden age, what age would that be? Prohibition, The Great Depression, WW1 or 2, Civil War, Cuban missiles, Slavery or perhaps just good old Racial Segregation - about which at least he's honest enough to admit that this really is one of his ambitions. Is he leading millions of beguiled, deluded Americans over a precipice?

We love slogans. They are easy to digest, to repeat and to follow. But the problem with slogans is that there's rarely little rationale behind them. They're designed to excite, not inform. It takes patience and expertise to predict implications of future actions. And as far as Brexit is concerned, there is one implication in particular that terrifies me - but which our leaders, both political and commercial - fear to state without being accused of 'scaremongering'. It's the prediction that if we leave the EU, we will quickly discover that Britain is replaceable and ignorable. Our competitors will gleefully line up to swiftly take our place.

As I explained in a previous post, 50% of our exports are to Europe, but only 10% of theirs are to us. So they're more important to us than we are to them. If anyone believes that after a bloody divorce where we abandon our partners and leave them to carry our share of the load, it will work out well for us, then they are either naive or delusional. Even if we do agree a free-trade agreement with 27 former European 'friends', will their populations still want to buy British stuff? Given a choice between a BMW and a Jaguar, which would a Frenchman buy? Slogans are easy, selling is not!

Have you heard of Passporting Rights? Nor had I until recently... and it seems nor had the lemming leaders demanding we leave the EU. All financial institutions based in EU countries (banks, insurance companies, hedge funds etc) automatically enjoy Passporting Rights which enable them to sell their financial products and services freely within the EU without additional regulation or controls. Several countries outside the EU such as Switzerland and Canada have tried to apply for Passporting Rights but were refused. Having Passporting Rights makes it quick, cheap and easy for London financial businesses to ply their trade in the world's largest market. The EU knows it can rely on such businesses and institutions to conform to their financial standards because all EU governments have instructed their internal regulators to enforce the rules governing such trades. Without that obligation, and the sanctions which can be applied if we fail to comply, we will be unable to offer those services either within the EU or, more importantly perhaps, to anyone outside the EU. That includes China, India and the USA. If they want their suppliers to deal in financial products and services that tick the EU box, they won't be able to find them in the UK. Frankfurt, Amsterdam and Paris are getting very excited! The City of London will simply evacuate to somewhere that does have Passporting Rights.

But can the banks, hedge funds, insurance companies and even stock exchanges state they will have to relocate if we leave? Nope. That's 'scaremongering'.

And it's not just finance that will be radically affected, huge though that industry is for the UK economy. Every other business that wants to sell its goods and services into Europe will have to conform to EU regulations. So Europe can be certain our stuff won't damage, threaten or otherwise harm anyone or anything for which EU regulations have evolved to prevent. Once again, by agreeing to abide by those rules as part of a national obligation of club membership, EU product purchasers can relax in the knowledge that there's consistency and therefore safety within producer EU countries. It's simply too difficult for EU countries to individually regulate every single product and service they import from outside the EU - and especially within poorer EU countries with limited infrastructure. They buy EU certified stuff because they can trust it - not just because there's no import duty.

So by leaving the EU, our stuff won't automatically be sellable in EU countries - whether their populations want to buy it or not.

And what happens if an independent UK decides to create new regulations, or do away with old ones? Even though these might be sensible changes here in the UK, they will instantly invalidate our conformity to EU standards. Probably temporarily, maybe permanently. But either way, it would load UK businesses, and all those existing customers in the EU we want to keep, with huge regulatory burdens they simply don't need - thereby increasing costs and reducing sales. Marvellous. But at least we'll have British rules for British people. Woopee.

And all because some ignorant politicians think everything will be rosy on the outside.

Yes I'm a scaremonger... because I really am scared and if you're British, so should you be too.




Comments

  1. Good points. Let's make sure we don't let the 'Leave' camp's arguments drown out the economic nightmare that will undoubtedly follow.

    ReplyDelete
  2. All valid points. I'd also like to add to the list of non-sensical arguments the Brexiter's refrain that the answer to reduced trade with the EU will be to increase trade with the Rest Of The World. Surely, if the demand is there, Business would already be chasing it. BIL

    ReplyDelete
    Replies
    1. Totally agree. Why would the RoW suddently rush to buy British goods if we left the EU? They certainly won't be rushing to buy our financial services if we can't guarantee offering them access to the EU.

      Delete

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