I commented that economics do not matter in the Brexit vote given the anti-EU and anti-immigration mood. There were sound reasons to vote Leave but the balance of the argument inclusive of economics should be Remain. So now after the vote, economic truly matters. Here is what Leave has voted for themselves in simple terms,
The British pound has fallen sharply and will continue to fall given the likely break-up of the UK. Higher inflation across the board starting with higher energy prices – takes more pounds to fill up the car, pay heating bills and electricity bills. Retail prices – those German cars, Ikea furniture, Korean made TV, iphones, food prices and more – all up. Buy Japanese cars made in Sunderland you say, well the Japanese ain’t gonna stick around for long.
Buy British fruits and vegetables you say, well the farmer has to fill up the tank in his tractor with more expensive diesel and he ain’t gonna find farm labourers from Eastern Europe to do the work. Who’s gonna man the counter at your local Starbucks, serve your food at pubs and restaurants.
Ah you say the cheap British pound will make your exports super competitive. Wake up sunshine! Input prices for manufacturing your export products will go up because of higher energy prices and you need to import the materials, don’t you? UK economy will benefit from being freed from EU regulations and harmonization rules you say. Well the terms of trade from the cheap pound and all that will take years to come through.
By way, those EU regulations and harmonization rules – it means you will face less job protection and lower redundancy benefits. Remember that because you have just voted for a longer unemployment benefit queue. I failed to mention environment protection laws didn’t I?
Which brings me to that GBP 350m a week that BoJo said would be saved from the EU contributions that can be spend on the NHS. Well, that won’t be there when the government has to spend more in unemployment benefits and when tax receipts dived from the economic fall out.
Oh did I mention that your employment pension large or small has just taken a hit and will continue to be hit? Those oldies who voted Leave in droves – well they are not bothered; they have their final salary pensions or their employment pensions have already been converted to annuities. They care more about things like identity but if you are not retired, you are the one paying for it by having to work longer for your own retirement.
Sell your house and move to cheap Portugal and Spain? Well you are no longer in the EU and that pot of money stored in your house value has just gotten smaller.
You say all of that won’t matter much when the UK gets her association treaty with the EU like Norway and Switzerland. Well free movement of labour is non-negotiable, ask those two. Which makes the immigration argument pointless right?
It is very nice to put a foot up the ass of those wankers in Brussels and give a black eye to your own establishment. Why not, they deserve it! But you are gonna pay dearly for your day of fun especially if you are earning below median income. Life is a whole lotta bollocks innit?
“I’m alright Jack” – I agree but it will take time.