So what does all this Brexit baloney really mean then?

Be careful what you wish for. You may just get it.

King Midas, and the characters in The Monkey’s Paw

Democracy is the theory that the common people know what they want, and deserve to get it good and hard.

H.L.Mencken, 1915

I have much sympathy with the view of Guy Verhofstedt that Brexit is the result of a catfight in the Conservative party that got out of hand. The more I see of how the Tory party prosecutes the aim of leaving the EU, the more Verhofstedt’s observation rings true.

Very little of what I have seen since June 2016 has convinced me that I erred in voting remain. However, it is clear from the result of the referendum that there is considerable animus in the UK to what the EU does or how it does it. Added to that seems to be a terrific amount of projection of other issues the EU is not particularly responsible for, from the winds of globalisation and automation to the fact that Britain was a much more significant player on the world stage 40 or 50 years ago, and those of late middle age feel the ways of the world slipping away from them, and hearken to glories past.

The tragedy of the referendum is that it was couched in the nihilistic terms of this or not-this. The problem is one of direction. A remain result would have been a clear result for a particular solution – the status quo in that case. A no result is a vote for ‘anywhere but here’. If I get in my car and set the sat-nav for London it can take me there. But I haven’t yet found the ‘get me the hell anywhere but here’ button.

The Tory party is ripping itself apart like a bunch of rats in a sack, because it is not of one view on anywhere but here. We have the swivel-eyed nut jobs, step forward John Redwood, Bill Cash, Daniel Hannan1, Jacob Rees-Mogg and others. Now to their credit they do deeply believe in Brexit, from a point of basically despising John Donne’s dictum that no man is an island – basically it’s everyone for themselves and let the devil take the hindmost. You can take that point of view as long as you are much richer than average, because you can buy your services and security on the open market. It’s Ayn Rand’s Objectivism, and Britain is Going Galt, 2 along with everyone in it.

These Brextremists positively crave a no-deal Brexit, because any deal gives the EU a say in something, and that pisses them off. No price is too high to pay for purity, and anything that doesn’t give them what they want is always the other side’s fault. There is a mirror-image of this in the EU with the focus on the terms of process, but in the end the UK is the dumper rather than the dumpee, so we get the advantage of calling the what and when, but fewer rights in calling the how.

We have the self-serving egotists – hello Boris Johnson, Gove et al, trimming their sails to whichever wind will blow them personal aggrandisement. The concept of living in a country run by BoJo is I suppose a little bit less bad than living in one run by Donald Trump, but the fundamental problem is the same – narcissist at the switch. BoJo is brighter than Trump, but has more of a tin ear, whereas I have a sneaking admiration for Trump’s ability to signal to his vote base via a barrage of what looks to others like random brain-farts.

Cats will fight

Then we have a whole bunch of non-extreme people that think a well-negotiated Brexit would work well for Britain, who seem to be AWOL on both sides, scared of the intensity of feeling of the nut-jobs. If we could kick out the swivel-eyed nut-jobs, then perhaps  the rest of Tory party could make a fist of it, but at the moment my greatest hope is that they rip themselves apart in the next few months. Cats will fight, and the buggers have been fighting about this for 40 years, it’s time that the fight goes all the way to death or dishonour for the sake of the rest of us. The endless yowling needs to stop, and Top Cat needs to stand on top of his dustbin lid.

What does a successful Brexit look like?

The trouble with the referendum is the nihilism of the No response leading to a lack of direction.

It should have been more nuanced – for instance

Should the UK remain a member of the EU or leave

Remain a member of the EU

Leave the EU

If you voted Leave the EU, what are your primary concerns?

The primacy of Parliament to determine life in Britain
The effects of freedom of movement on the social fabric
The effects of freedom of movement on wages
The effects of freedom of movement on services

It would have been useful to gauge which of the aspects of the EU concerned people the most.The obvious pushback is that it sets a leading question and favours the Leave side, and the government didn’t really want the No answer, but Cameron stupidly made it a manifesto promise hoping a Coalition would spike it.  Very little work was done on what a successful Brexit looked like. However, I saw the vile creepy grins3 and the spring in the step of my fellow voters who were all of a certain age (I voted in the afternoon, like all retirees) and I was pretty sure they weren’t voting remain 😉

Qualifying the issues people had would have informed what to prioritise afterwards. For instance, May and the wingnuts are making a hullabaloo about the ECJ, which probably doesn’t exercise people bothered about immigration, while the wingnuts frequently don’t even bother to mention immigration. I love Hannan’s disingenuity in asserting

In the event, of course, things worked out differently. Britain appears to have grown more strongly in the six months following the vote than in the six months before it, and finished 2016 as the world’s most successful major economy. Unemployment, far from rising, has fallen consistently since the vote. British stocks are the best performing in Europe..

Hannan, me old mucker, you may be a wingnut, but you’re not shit for brains. The result you wanted has devalued the pound by a lot. Obviously things measured in pounds will look bigger, in the same way as it takes you twice as many six-inch rulers to measure your carpet as 12-inch rulers.

the pound has got about 10% smaller in IMF SDRs since the referendum

A lot of those stock market gains you’re seeing aren’t real. The way unemployment is measured is deeply borked. I will be considered employed this year because I was working as self employed between April and May. We torture the genuinely unemployed with pettifogging rules and regulations; it’s not surprising that people claim to be employed but make no money and get tax credits. Look at the increasing number of rough sleepers and the use of food banks, which are also caused by the increasingly worthless pound among other things.

rich Brexiters fuss about sovereignty, the poor about immigration

It is of course possible as a remainer I have missed some aspect of the Leave debate, but of what I have heard, rich Brexiters tend to lie on the sovereignty axis, often not really giving a toss about freedom of movement, whereas poorer Brexiters have concerns about immigration, the effects of freedom of movement and the effect on their wages. The rich make sweeping assertions about Ricardian advantage and Schumpterian creative destruction, but when Tony Blair opened the UK to people from Eastern Europe the resulting influx had a negative impact on wages the lower end of the market. There is a very strong argument that the influx was good for the UK economy as a whole, which probably made people that took the sharp end of the stick feel even worse, seeing rich Londoners living it up on fine dining while they went to food banks.

A ‘sleb leaving the Chiltern Firehouse. Observing the increase in London fine dining probably throws a hard light on the tribulations of the minimum wage slave on a zero hours contract

If you’ve taken the shaft on minimum wage, voting Leave is not necessarily irrational even if it impoverishes the country.  It will be immigration that lights your fire. It is tragic that the effects of globalisation and automation are hurting these people too, and it is compounded by the wilful destruction of the welfare safety net in the last few years. The EU ended up shot for an awful lot of decisions that should have been laid at the door of UK politicians or the tides of capitalism and Schumpeterian destruction, as well as secular trends which aren’t going the way of unskilled labour. There’s some case for adapting the welfare system to ameliorate this shift from labour to capital, but it’s not really the theme of the current administration.

Free movement of persons seems to be the main sticking point. Freedom of goods is OK – not that many people seem to have an an issue about driving German cars or eating Italian ham. Curiously enough nobody seems to have a beef with the free movement of capital, even if they don’t have any, though that also makes working a bit more crap than it used to as the capital chases the lowest labour costs offshore. Freedom to establish and provide services across the EU doesn’t exercise passions either – people rich and poor are happy to bank with Santander.

The Ermine, sadly, is in the same camp as the swivel-eyed nut jobs in one aspect. I think the EEC jumped the shark with the treaty of Maastricht and the inception of the Euro. The change of name from European Economic Community to European Union showed the nature of the rot. I view the economic benefits of the EU as the reason for being in it, the political union as misbegotten, I’m not so keen on a United States of Europe, although it doesn’t exercise me with devastated dreams of Imperial derring-do of yesteryear, I’m not old enough to recall the pink of the British Empire maps.

The British Empire in 1915, when the sun didn’t set on it.

I don’t give a toss about freedom of movement, so that places me on the rich people side of the issues – with sovereignty. But I’m not rich enough to afford that sort of navel-gazing – in the end rubbing along with people in the world is about compromise. Britain secured specific opt-outs from the ever closer union and the Euro, which means what we had was better from a sovereignty point of view than what we would have if we left and rejoin once the old colonels dreaming of Empire days of glory die off and the interests of younger voters and the economic argument shifts the balance, as Verhofstadt carried on to say

“I am also sure that, one day or another, there will be a young man or woman who will try again, who will lead Britain into the European family once again. A young generation that will see Brexit for what it really is – a catfight in the Conservative party that got out of hand, a loss of time, a waste of energy, stupidity.”


Let’s not forget, Britain entered the union as the ‘sick man of Europe’ and thanks to the single market came out of the other side Europe made Britain also punch above its weight in terms of geopolitics, as in the heydays of the British empire.

And we from our side must pay tribute to Britain’s immense contributions – a staunch, unmatched defender of free markets and civil liberties. Thank you for that. As a liberal, I tell you, I will miss that.”

I am not rich enough to prize sovereignty above economics. I expect to be hit less than the poor by the economic fallout of Brexit, but I expect to be a lot poorer, and we will be the sick man of Europe once again. Looking at the swivel-eyed crew with their indifference to the economic costs, I am nowhere near as rich as they are, I would probably need to have much more than twice the wealth I have to share their insouciance about the economic fallout. I have no human capital left, so unlike the young who might be able to make it up by moving and working abroad – after all people worked in other European countries before 1973 – I will have to make my stand in the UK, stuck on a small island with these guys

I will probably face the need for health insurance as the NHS is destroyed because we can’t afford it, I expect social unrest because we won’t be able to afford even the eroded welfare state that we have now. It’s not an attractive thought to grow old in. And in the event that Britain does leave and rejoin, we will have less sovereignty than we had before we left, though I can hope that the Euro explodes due to its internal inconsistencies before any of those events come to pass, which may trim some of the dream of ever closer union. Europe doesn’t even share a common language FFS, never mind a common culture, there is more history in any one European country than there is in the entire United States (born 1776) which is why the United States of America is a viable union of states in a way the United States of Europe isn’t.

I do get some of this Brexit bollocks, from a sovereignty point of view, but nowhere near enough of it to think it’s a grand idea and vote for it. The EU had a lot wrong with it, but an awful lot more right, inherited from the old EEC, which was partly shaped by the UK, particularly the Single Market that the wingnuts are so keen to get away from. I find no conviction in the notion of a buccaneering Britain striking trade deals left, right and centre. The one with the United States will be ‘Here are our terms, you sign here for our GMO crops, chorinated chicken and antibiotic and hormone-pumped beef’. It’s been 60 years since Britain surrendered its Empire, the 1950s ain’t ever coming back, and Verhofstadt was wrong. Britain did perhaps punch above its weight in terms of geopolitics as part of the EEC, but not as it did  in the heydays of the British empire. Declinism is a disease of late middle age, and we are in peak Boomer time. I am one, but hey guys, we didn’t have to actually help the downswing come.

Sic transit gloria mundi, guys. For a Matt-Ridley-esque counter strike, let’s hear it from the Spectator

Brexit was a vote of confidence in our ability to shape our future as an independent democratic nation — a choice that few of our European neighbours feel they still have. We should not allow declinist panics to confuse the outcome.

I think matey boy is barking, but I admire his chutzpah, and ability to sell a great story. I suspect it isn’t just me that doesn’t have any idea what this Brexit bollocks means. The only people that do have an idea are the wingnuts. It’s the usual problem

The best lack all conviction, while the worst   
Are full of passionate intensity.
The wingnuts seem to be in the ascendant. Their no deal Brexit probably won’t be about immigration, bucanneering free market Britain will need all the lost cost hands it can get, and if that keeps the oiks in their place, well, all to the good if you’re Jacob Rees-Mogg and his ilk.

The personal finance angle – what to do?

Most of the last few years I have been allocating new spend towards foreign assets, with a bias ex-UK. As I accumulated stocks, I became lazier as I realised I wouldn’t have to eat an actuarial reduction on my pension, so I shifted towards the world according to Lars Kroijer. I didn’t sell my HYP but I bought a lot of a FTSE World ExUK index, to offset the fact my HYP was heavily UK biased. If you expect the UK to go titsup due to Brexit, it’s a good move.

Against that one should set the fact that fund managers deeply hate the UK at the moment (H/T Monevator)

When I see something stinking up the place like UK equities I want to go buy it – there’s now’t wrong with schizophrenic investment and so I am tempted to Buy Britain at the moment. Maybe a push on small/mid cap with about a quarter FTSE100, after all I should lean against my own prejudices every so often and I am too biased towards UK big fish. Brexit might turn out absolutely great, I find it hard to believe, but it’s possible. I may allocate half of this year’s £20k ISA allocation to Lars and half to the UK. If Brexit is a bastard the UK lot will go down the toilet, if it is a terrific success then it will save my ass for this year’s contributions. And vice versa for the L&G Lars option, which coincidentally is heavily weighted towards the US (because the US is the largest component of world equities by valuation) so I still remain contrarian. The US is also notably hated by the professional fund managers. I really can’t think why 😉

I need to stoke my SIPP with £7200 this year and next. It will follow the rest of my small SIPP which is currently in a gold ETF, this is money I will call on in the next year or two and I don’t trust the £ across March 2019. I will be most  happy to eat the hit if Brexit is a roaring success and the pound soars 😉


  1. A measure of the hypocrisy of the scumbag Hannan and that of Nigel Farage is that they were MEPs sucking at the teat/gravy train of their supposed arch enemy FFS, Hannan since 1999
  2. Attempts to replicate Galt’s Gulch didn’t go very well “Ayn Rand’s Capitalist Paradise Is Now a Greedy Land-Grabbing Shitstorm” for the same reason communism didn’t work – human nature. Better luck with Seasteading, eh, chaps? 
  3. I wish I had taken my camera with me, I saw an animation in people quite unlike any election before or since, and the turnout was huge

39 thoughts on “So what does all this Brexit baloney really mean then?”

  1. The most upsetting thing for me is that when the rest of the EU inevitably turns around and says “No, you can’t have your cake and eat it, we have to uphold the integrity of the single market”, the Brexiters will all shout about how unreasonable the EU are and how this proves them right all along.

    My Brexiter workmates seem to get very excited about some impending EU disintegration whenever there is news of a right-wing party in Europe doing well – like in Germany and Austria recently. I’m not sure why as even those parties seem to be fundamentally pro-EU (though perhaps sceptical of further integration or expansion).

    Also, curiously, I’ve noticed people seem to want to paint the right-wing parties in other countries as somehow further to the right than the right-wing parties in this country. I wonder why that is? I looked at the policies of the supposedly far-right AfD in Germany for example and they don’t seem all that different to UKIP.

    Oh, you forgot to mention the most insane Brexiteer of all – Nigel Lawson – now a climate change denier of course. Part of me hopes there is a hard Brexit so that he gets turfed out of his residence in France. That would be sweet justice.


    1. I have a particularly soft spot in Hell for our Nige, because his stint as Chancellor pumped house prices just as a young and foolish Ermine decided to dive in feet-first in 1989. I don’t actually hear much about him these days, but whatever he is talking about he’s always wrong. Sadly he’ll just buy Maltese citizenship if he needs to keep his French pied a terre 😦

      It’s difficult to know whether to be cheerful that UKIP seems to be imploding or despairing about that fact that it’s metastasized into the wingnuts!


  2. I’m buying the US but not Britain. The thing about positioning vs history is that in order for the comparison to hold, the conditions over time this history covers have to remain comparable. I think this is true for the US, but not so much for the UK.


    1. It’s a difficult one – I have once before struck lucky by investing in something I didn’t believe would come to pass in the GFC, but I see the point about the nonstationary boundary conditions. And Roberto Sans reminded me I am overexposed to the fall in the pound through my main pension, so maybe I will stick with Lars 😉


  3. To me, crossing borders between Germany, France and the Benelux countries on an almost daily basis, a United States of Europe is the most natural thing in the world.
    Who in their right mind would want to go back to the way things where in the first half of the 1900’s ?
    ( Just for measure, I’m just a couple of months younger than the Ermine )
    The Euro has serious issues, that alas i have to concede.


    1. When I used the term USE I meant a politically and fiscally integrated federal state like the US. I may be showing a lifetime of living in Das Inselreich but I don’t think I will see that in Europe in my lifetime – I am not sure there is sufficient common cause within the EU. I’m not sure the federal government has ever treated a US state in the same way Greece was. Decommissioning the Euro would make most of these issues go away, Greece had no problem with its different lifestyle until joining the Euro, the depreciation of the drachma smoothed the differences out 😉

      Schengen is an agreement between a group of nation states. They don’t even seem to all have to be in the EU, I had my passport ready to cross from Lindau to Switzerland and was surprised to find there was nobody to show it to last time I passed that way.


    2. I used to drive round Europe in the mid 80s to early 90s and generally just moved from country to country without stopping. I can’t honestly believe that the EU will suddenly put up customs posts just for British tourists. And as regards goods, I shipped out of Dover with freight in the same time period and even before the advent of the SAD doc that streamlined customs paperwork, there weren’t huge delays. I never once got pulled for a physical customs check.


      1. I also don’t ever recall ever actually being stopped by Customs, but I do recall passports being checked at each pre-Schengen highway border crossing.

        For the future, I guess the process of a Schengen visa would mean any formalities would be done at the point of ingress to the EU.


  4. Thank you for your honest and as always informed and entertaining assessment of this situation. As an EU citizen living in the UK since 1998, my main reason for concern is the possible no deal scenario. I am fortunate that I would be able to restart my life in my country of origin without too much difficulty but what worries me is the prospect of a run on the pound and a flight of assets from the UK , as it has happened recently with the supposed Catalexit in Spain that led to an overnight flight of all the main banks and companies , so the tax base of the new state would be all but non existent. I wonder if an economy so heavily dependent on banking services like the British would not receive a mortal wound rather than just a severe bout of flu.
    So I am re balancing my portfolio leaving all UK assets and investing in non UK markets. Pity my NHS pension cannot be saved.


    1. I think the run on the pound is a given the way things are headed. Interesting point you make about your pension, I have this issue too (as well as the joy of living in the shattered wreckage) so perhaps I need to shift my ISA saving plans away from the UK – I need to consider my entire assets, not just the equities in isolation.


  5. I was/am firmly in the leave camp and share the view of Nick Train that everything will work out just fine in the end.

    The EU leaders will come around to a more reasonable position when they consider the real possibility of a ‘no deal’ and I hope, over time, more remainers will come round to accepting the fact that we are leaving…but also accept some of them never will.

    Keep calm and carry on.


    1. I think it will work out for people who have money. I guess my fear is that I may not have enough to bridge the gap, and that I will grow old into the suckout. But I do hope you are right!


  6. Got to agree with DIY Investor on this one. In 10 years time Bexit will just be a blip on a chart. Anyone remember “Black Wednesday”?

    I was an “on balance” Leaver, but the more of the way I see the EU negotiators behaving the more I want out at any price.

    We should just walk, save our contributions (and use them to replicate the hideously mis-named “EU funding”) and bank the rest – we’ve been an over-payer (paying more than we get back) for ever.

    No “divorce payment” – you pay while you’re in the club, not before or after. And given that we’ve paid more than our fair share from Day 1, shouldn’t they be paying us? 🙂

    WTO tariffs will be fine, if a bit of a jolt to start with.

    But I do wish May et al would make their minds up. They’re useless negotiators – so the choice is abject surrender to the EU or Hard Brexit. Hardly a great choice, but it seems as if there’s no middle ground with the EU – “do as we say, or else…” Well, that attitude is one of the reasons the UK voted to leave in the first place.

    Heavens knows what the EU will look like in 10 years. I just hope we’re no longer part of it.


    1. I remember Black Wednesday only too well. I had been foolish enough to overpay dramatically for a house in 1989, and then got to pay 15% mortgage rates to atone for my arrant stupidity, twice as much as the rate when I took it out 😦 I’ve loathed the asset class ever since. But yes, if one sticks to equities it’s a fair point.

      As far as the negotiations, I’d say a plague on both their houses. I expected a modicum of competence out of our side but the endless cat-fight seems to be draining all semblance of doing one thing consistently from Her Majesty’s Government, and the pusillanimous shrinking away from their duty by the moderates seems to be leaving the field clear for the wingnuts.

      However, I suspect you’ll get your preferred path, it seems to be heading that way and time is ticking away…


    2. I love the optimism of the Brexiters! Unfortunately I look at little things called facts which tell a different story. Like the fact inflation (caused by the weak pound caused by Brexit) Is now higher than wage growth. Or the fact that the UK has the lowest growth this year in the G7 and EU. And we havent even left the EU yet.

      Brexit will be a blip for the rest of the EU, the UK on the other hand… I suspect in 10 years time we’ll be desperate to get back into the Single Market, just like we were in the 70s.

      The EU negotiation process seems quite sensible to me, sort out the big issues first – citizen’s rights, the Irish border, the money the UK owes (that the UK already committed to pay) – then go onto trade deals. And they have the upper hand, they’re well aware that a hard Brexit will be far more damaging to the UK than it will be for them, so it’s no surprise they’re waiting for a better deal. But the EU’s stronger position was made clear before the referendum and the Brexiters made up some guff about German car manufacturers saving the day (it turns out the German car manufacturer’s chief concern is the integrity of the Single Market but hey ho).

      As it stands the Brexiter lies have all turned out to be just that – lies. We’re not going to get £350m a week, we’re not going to get the ‘easiest trade deal ever’ and we were never going to be ‘flooded’ by 80m Turkish immigrants. Whereas the Remainer ‘scaremongering’ is all, slowly but surely, coming true.


  7. The nation is deeply divided. I am a firm remainer and am pissed off that my ability to perhaps retire or spend a substantial amount of time in France or Spain is put at risk Why?…because repocipical health agreements will expire, and I will get much less for my GBP. That’s a personal and perhaps selfish reason but nevertheless I don’t see how we are going to be better off as a nation when trade (under WTO) will become at the very least frustrating to trade with our largest trading partner. Supply chains will be broken, Companies that are unable to adapt quickly will go under and there will be job losses, its a pity the job losses wont be confined to brexit voters.


    1. > its a pity the job losses wont be confined to brexit voters.

      I confess a certain degree of feeling that way too – It was arguably Blair that amplified the hit of the A8 on low end wages, but IMO some of these guys were Pied Pipered to Brexit, and I don’t really thing the Brextremists are that bothered about immigration anyway.

      I will find it difficult to have sympathy with people bellyaching about high inflation and stagnant wages if they voted Brexit – Mencken seems to be an apposite response to that. Let’s hope that unskilled Brits are really up to picking Londoners’ fruit and veg at a price they’re prepared to pay. After all, I am reliably informed that we can dig for victory to be self-sufficient in food so that nasty £ depreciation won’t affect food prices but it will reduce unskilled unemployment 😉


  8. One warning light is the London property status, with prices gently drifting downwards on every gust of uncertainty. Given that this is an asset class in its own right for tax-dodgers the world over and that few natives can actually afford it any more, the message is clear. If rich foreigners want to redeem their savings when they feel they’re no longer safe, then they most likely have to sell to those of their own mindset …..who by definition will be subject to the same jitters – so this must lead to a steady decline at least – even if the bubble doesn’t burst per se.

    Endearingly brexiteers will cheer that as a good thing because ”normal people can now afford to buy in London” – but those people will no longer want to live in (still) the most over-priced and unhealthy region of the country if there are no jobs there forcing them to do so. So, onto jobs…..

    If a company anywhere is serious, they’ll keep a careful eye on their suppliers and if any are looking unreliable [brexit uncertainty for example] will substitute them in good time so as to prevent any disruption. So much for booming exports; imports will also increase in cost due to a continuation of the run on the £. Why would foreign investors prop up a derelict island if they think they wont get their money back with interest any more?

    As for the Anglo-saxon brotherhood bailing the UK out, think the Boston tea party and why it’s said never go into business with friends if you want to keep them. So, as long as the UK remains crippled by the dysfunctionality of a 2-party system who effectively share power, nothing will change as the political class are incentivised to retain the staus quo. Both collude in scapegoating outside forces [of which the EU is just one bogeyman] to escape punishment for their corruption & ineptitude because enough of the electorate are reliably guaranteed to fall for their lies, no matter how crude.


  9. As a ‘last minute’ Leaver (I was undecided …until I put the X in the box), I don’t think that all will go well, but neither do I think that the world is going to end. Maybe this will be my ‘Black Wednesday’. When the crap hits the fan, I guess I shall just ‘keep calm and carry on’ – I can’t see a better plan than that really (for me).


    1. I think if you can continue working after Brexit you’ll have a better experience of it. Any mortgage will be reduced by inflation, and hopefully the money earned will increase to compensate for inflation.

      I am more than 50% exposed to the erosion in the £, and indeed this thread has shown me I am not in a position to take a contrarian UK push in my ISA, since I need the income from foreign assets to fight back.


  10. 1. In 1992, the sterling/dollar exchange rate fell from around 2 on 1st September to 1.56 at the end of October.

    2. MLR was at 9.875% on 1st September, then raised on 16th to 12% and then 15% (not implemented) , reduced to 5.875% by January 1993.

    3. Crude oil prices were relatively subdued for the next 7 years

    4. We also enjoyed the ‘New World Order’ and the associated peace dividend after the collapse of the Soviet Union.

    These factors were likely to have been largely responsible for the sky not falling in after Black Wednesday. In fact, as I’m very fond of reminding people, we then had 16 years of uninterrupted economic growth until the GFC.

    We may not be so lucky after Brexit!


  11. An interesting analysis: not least for the mental blindspots the “rant” appears to show up. At the start of the piece you state that a remain result would be for the status quo. Then twice later in the piece you express disquiet on the euro and the ever closer union without an suggestion that they both fundamentally impact on the status quo; so much so that a status quo vote was not an alternative either by a leave or remain vote_ only a vote to change this way (ultimately become part of the United States of Europe) or that way (chose to be a small country on your own with some flexibility).
    Having been an expat for more than 18 years I didn’t get a vote, and of my two brothers one voted each way,so the family is neutral (!) but this seems a fairly fundamental issue to me which doesn’t get any acknowledement in the remain camp. It seems intellectually dishonest to me to suggest that remain means no change from the current status when the EU itself has made clear it wants to accelerate ever closer union.
    Plus being in the service industry I have been very consious that the 4 freedoms essentially exclude freedom of services (which the Uk is very good at) so exit means no real loss for the bulk of Uk exports to Europe, and being in a WTO governed country that has traded sucessfully with the Uk on those terms for longer than i have been here, neither does the switch to those terms cause me alarm.
    Yet according to the Uk press the world will end!. Very strange- but clearly commentators take their position and defend against all comers regardless of how valid their points may be. Yet another “benefit” of the echo chambers facebook and other social media have created so that their subscibers only get to see the views of others who agree with them and not a whiff of dissent…


    1. I believe the UK is exempted from both the requirement to join the Euro and from the requirement for ever closer union so the current status quo is much better on these fronts than the remain case you cited.

      The division in the ruling party seems to be sapping their competence as negotiators over the transition, largely because there seems no clear view of which Brexit constituency to prioritise, the sovereignty side or the immigration side. I suspect it will be the former, so there will probably be a lot of people angry with the result whatever happens.

      I hope we have done better than the typical echo chamber, yes, eight commenters so far are broadly Remain but four are Leave.


    2. “the 4 freedoms essentially exclude freedom of services”

      No they don’t. See: passporting rights.
      Or did you think all that wailing emanating from the City was about Brexiters threatening to bring back the blue passports?


  12. The degree of complacency and misjudgment on the part of the conservative government about its relative negotiating strength and the attitude of the EU27 reminds me of Antony Eden’s misjudgment of the US’ attitude in the Suez crisis

    The end result of the Suez crisis was the fall of a government and end of Britain’s aspirations as a world power

    Just run away from GBP exposure really


  13. I am surprised there is so little attention to how climate change, population pressure and bad governance throughout the African and Middle Eastern countries will propel economic migrants northward into Europe, moreso than in 2015-16.

    I’m looking at it the situation from the Americas where we have much more capacity to absorb southern populations (once Trump is impeached and tossed out). Why is there so little attention to carrying capacity in the UK just 20 years from now?


    1. I guess because you have to fight the nearest fire first 😉 I personally have steered clear of that sort of thing because I suspect my views are not of the mainstream. Let’s just say that I would be surprised if the 1951 UN refugee convention survives the next 20 years.

      But I am old, I am unlikely to live another 30 years, and I am child-free. If I had children, particularly young children or grandchildren, those mid-range issues would scare me shitless. That outlook and my status aren’t entirely unconnected, but that’s a very different topic that tends to polarise opinion when generalised. So I don’t go there, as I don’t have too much skin in the game. I do sincerely and deeply hope those fears are/were misplaced, and the get out of jail free card of invoking human ingenuity addresses the challenge.


      1. Actually I think your views are most likely very mainstream. I think it is just that the economic, political and intellectual elites have systematically and deliberately whitewashed the issue and ignored majority opinion.

        I also doubt that the refugee convention is realistic and will have to go sooner rather than later. Like you I do not have children but I am absolutely baffled by the complacency of my friends who do have children. If I was in their shoes I would be terrified. What kind of society do they imagine they will be leaving their children and grandchildren? It could get really, really ugly and Brexit will look like picnic in comparison. I suspect that many westerners have not travelled to the less developed parts of the world and so fail to understand that the safe and relatively civilised west is an increasingly small exception to the rule. In the 1950s Europe accounted for about a quarter of the world”s population, now it is 7% and that figure is shrinking rapidly.


  14. This made me go hmmm this summer.

    “ 34% of the [European] public feel they have benefited from the EU, compared with 71% of the elite.
    A majority of the public (54%) think their country was a better place to live 20 years ago.
    Large sections of [the public] view the EU in negative terms, want to see it return some powers to member states, and feel anxious over the effects of immigration. ” [1]

    Also it pains me to give Farage any credit but in fairness he did call out the EU in the EP for their pointed silence on the Spanish government’s actions in Catalonia.

    1. The Future of Europe Comparing Public and Elite Attitudes. Chatham house. June 2017


    1. That’s an interesting paper – thanks for that.

      I can see the thinking behind their contry being a better place ot live – although in the rich West we are materially a lot better off career paths for people starting now have to compete with a lot more of the world than was the case when I started work, where China and anything behind the Iron Curtain wasn’t part of the competition. If you’re very bright or talented opportunities now are probably a lot greater, but for the rest of us in the erstwhile First World things were perhaps easier. Globalisation has reduced absolute poverty since, but that’s no help to people who aren’t at the top of the tree here.


  15. Ermine
    Thank you for the reply.
    I was by no means suggesting that your blog falls into the category of an echo chamber, circa facebook, quite the reverse-that is one of the joy’s of reading it (and the comments).
    Re the Euro and the exemption from ever closer union- yes, now; but how much longer if the vote had been remain?. Like always no one can see the future, only their projections of what they expect it to be- heavily influenced by inherent bias, which is maybe why the vote was what it was- tipped over the line by normally solid labour supporters who in the general election reverted staright back to “home” which undermines the argument of the power of the Murdoch/right wing press argument somewhat.
    Anyway, no one can see the future and i suspect the Uk will muddle along just fine, whatever happens. With globalisation the world has changed fundamentally in the past 30 years (from a personal perspective China is not just unrecogniseable it’s a new universe), and no one knows the optimium model. Being part of EU means safety within a large slow moving entity, with its inherent risks. Brexit means more flexibility and speed of response, but smaller and on your own, with all those inherent risks.
    Which is best, now and for the future?. Who knows? But having gone through the 1997 handback of HK to China and all the fears/projections that involved I am probabily a bit more experienced, cynical, and relaxed about what appear to be fundamental changes, but ultimately prove to be trumped (pun not intended) by millions of people carrying on life as normal.


  16. Good luck to the UK pulling out of Europe and then trying to negotiate a trade deal with the USA. Both Canada and Mexico cannot even renegotiate an existing trade agreement with the US. Are we back in the 1930s?


    1. And your guys have experience in this sort of thing, where ours are just out of kindergarten as UK trade negotiations have been outsourced to the EU for 40 years!


  17. I wonder what the longer term political impact will be, if it’s really painful the Conservatives could be out of power for a generation. It would be ironic if the outcome of all this is the UK shifting to the left and the EU racing down the road of further integration without us. I’m not sure that’s the intention of the brexit agitators.


    1. I think monetary union pretty much forces the Eurozone down the road of further integration. The Greeks wanted a currency with more of the characteristics of the Deutschemark than those of the drachma. I fear it escaped their attention that the implication of that is you have to live a little bit more like Germany than like the freewheeling approach they had enjoyed before.

      In the UK, if most of the votes for Brexit were from people concerned about immigration on their jobs, then a shift to the left might well be a rational response. The most vocal Brexiteers are on the right of the Tory party, but I am not sure they are the most numerous in the Brexit constituency. Nothing I have seen or heard from Jeremy Corbyn says to me he is anything but a Brexiteer, just one coming from a different viewpoint than the Tory wingnuts.

      Corbyn’s actually quite consistent on the EU he voted against both the Maastricht Treaty which transformed the EEC into the EU and the Lisbon Treaty. Had I been given a vote I would have done likewise, to push back against ever closer union 😉 I don’t particularly view the prospect of a Corbyn government with joy but he’s less extreme on the issue of Europe than the wingnuts IMO


  18. Excellent article and I 100% agree with Guy Verhofstedt. Cameron just couldn’t grow a pair, face down the Brexiteers in his party and get on with governing the country. Why so many people voted for Leave, a lot to do with anti EU propaganda in the mainstream media. How many articles in the mainstream media pointing out the benefits of being in the EU, I scratch my head to remember. Whats done is done and now we try to position ourselves as best we can for whatever outcome. Whats worrying me is further sell off in the pound leading to higher inflation. All of my bond holdings are international hedged to sterling but i wonder about the future benefits of being hedged.


  19. Free trade deals end up being mercantilist protection rackets, the UK should declare unilateral free trade and reduce regulatory barriers to trade.

    Subsidies to farmers wealthy landowners through the Common Agricultural Policy and renewable energy should end. British farmers can and do compete on quality, let developing world farmers easier access to our markets.

    Reduced income tax, company tax and VAT for depressed parts of Britain should be considered, while overall taxation should be normalised to bring the taxes paid on labour and capital into line to minimise incentives for tax minimisation/avoidance.

    A land tax should be considered on the unimproved value of land, independent of its use. Farms, country estates, family homes, industrial, commercial, urban and suburban land should be taxed to encourage owners to use their land for economic purposes. Land, they are simply not making much more of it, and windfall profits form ownership is the ultimate in rent seeking. This tax could be introduced at low rate, then ramped up to substitute for income tax.


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