Friday, 1 July 2016

Brext Steps

Lots of focus is now on the selection by the Tory party of the next PM; and rightly so, because the decisions made now will affect whether we can achieve a smooth exit or not. One faux-pas and it might be auf wiedersehen, pet to any sweetheart deal with Queen Europe. Luckily, international leaders are urging all parties to behave sensibly and it is in nobody's interest to foul up the world economy.

But there is plenty that the UK government can crack on with on the domestic front, to try to keep the economy whizzing along nicely during potentially turbulent times. Mark Carney has hinted at a rate cut, which has confirmed the Pound as a weakening currency. So far, so good. He could go further, of course: he should re-affirm that no monetary tightening efforts will be made unless and until any signs of inflation arise. He could set an explicit inflation-trigger-level, perhaps, and make sure that nobody is under any illusion that the exchange rate will be propped up.

Next, the new Chancellor should swoop in and make some emergency business tax cuts. Take a few points off the Corporation Tax rate, and set out a timetable to phase out employers' national insurance "contributions". The government must send a message to the outside world that the UK is Open For Business. A reduction in business overheads ought to stave off any worries about tariffs that might be imposed by the rEU if a hard exit does happen. After all, a suggestion I read was that the average tariff on the sort of stuff that we sell to other EU countries is about 4%, which is relatively easy to deal with, with some judicious tax cutting and a falling Pound.

At the same time, a review into the operation of the VAT system is a nice easy early start, too. Even if we end up staying within the EEA we can play around with the VAT system in a way we cannot within the EU. Show voters and the world what a difference it can make to be in charge of our own decisions. Abolish the "tampon tax".

Make it immediately clear that it will not play politics with the people from other EU countries who are already here living and working. We absolutely must not use the possibility of throwing people out as a bargaining chip. Anything other than this leads to uncertainty for everyone, and leaves space for rumours and threats. 

Start talking to friendly non-EU countries about trade deals. Get the momentum going. Boris said that he has been quietly approached by various important markets. Make it less quiet. Get those orders in and show the French and Germans that we will be quite happy to compete with them in the world. Set up a trade fair. Send Prince Charles around. Invest in a Trade Force One jet to fly business leaders around the world and to bring them to Britain. Reinvigorate the Board of Trade, appoint a President of it.

Set up an investigatory committee to look at what rules and regs have been put in place under our EU membership that could be tweaked or abolished. We have the Law Commission to review the criminal law, let's have something similar to make sure that we only have sensible and light-touch regulation. Some areas will be out of bounds until we know whether we are inside the single market or not; that is fine, start with the low-hanging fruit.

There is one HUGE risk for Brexiters: that the economy tanks while we are sorting out what we are doing.


Anonymous said...

Lots of great ideas there. Why were these not put into action prior to Brexit?

Roger said...

@ Anoymous 6:38 because we are led by selfish idiots.

The dead cat bounced, rose back up and now on its way down to who knows where. The cat had been dead for years, kept twitching and purring by infusions of property cash, but now, some fools encouraged the mob to chuck it out the window.

Looking back over the past 40 years UK governments have never succeeded in boosting UK performance, all that has happened is a long series of devaluations of the £, the Brexit vote is the latest but is of a slower burning more damaging kind.

Eventually we will be reduced to making Iphones for Africa, JD Sports wage structures everywhere north of Watford, wasn't that the plan? Boris is no fool, keeping well away from this mess.

Barnacle Bill said...

One thing we must do is not allow T B-Lair to become involved in any way.

He's shafted this country enough; although I suppose that now we're leaving a European arrest warrant for war crimes won't work?

Blue Eyes said...

As Evan Davis noted, all of the candidates have acknowledged that we are leaving.

Bill, I think Tony Blair has an excellent sense of humour!

Nick Drew said...

the key is not to allow the dyed-in-the-wool Remainders to characterise the next couple of months as "of course the FTSE has recovered; of course not much has gone wrong for us - everyone knows we are not going to trigger Art 50: if anyone is stupid enough to do that, then the world really will fall down around our ears"

excellent, then, that May said "we are definitely going to leave the EU"

and even better if we straightaway do some of those no-regret, preparatory-type things you suggested, BE

Electro-Kevin said...

And excellent post, BE. I too am concerned that the economy tanks and we get blamed for it.

I was heartened by the Theresa May speech which I listened to on R4, even though she was against Brexit. It seems only right to link here the paper from which the Boris assassination was launched and what they think of her, which helped change my mind further:

The Brexit government isn't in office yet. We need to get this in place with some urgency and stop the madness going on in Westminster.

We need the likes of Andrea Leadsom and her reassuring voice given a prominent position and telling the people that they have done the right thing.

Keep Calm and Carry On has never been so important.

Electro-Kevin said...

Perhaps instead of Remainders we should call them Remoaners, Nick.

They are holding our country back.

Anonymous said...

The Referendum had the legal weight of a beauty parade. It is for an [almost minority] government to set the stall out and have Westminster steer a path through parliament, the Lords, the devolved assemblies, and the EU itself.

That will take time.

In the meantime all the excellent suggestions are in the hands of the business community and consumers. So what is everyone doing?

In business, are you planning visiting non-EU markets. As consumers are you switching your portfolios into UK based exporter stocks?

Brexit doesn't happen by itself.

Anonymous said...

EK - And excellent post, BE. I too am concerned that the economy tanks and we get blamed for it

errr no, I understand we were due a recession and long term the EU won't succeed but all the Leavers are on the hook for this, voters included, drives me mad that many people will have voted for leave and then when we're all in the shit they'll say it was the right idea but the politicians didn't deliver it, people should have factored that into their decision.

dearieme said...

Blair implies that he should be involved because the work will involve a lot of detail.

He really is barking, isn't he?

Still, hang 'im just the same. Pour d├ęcourager.

Gringe said...

Anon 10.11 - What's everyone doing ? Not selling London houses it seems.

Electro-Kevin said...

Anonymous at 10.26

Something which was definitely not said in the EU Referendum was "We politicians will refuse to deliver Brexit and obstruct the referendum result if it goes that way."

So you can't blame ordinary people for not factoring it.

CityUnslicker said...

Also, we need to be tough. EU is suffering worse than the UK in terms of feedback I am receiving. We know London will make it, it always does.

The Eurozone is a basket case.

The best action is to call their silly bluff and head for WTO. I know who will crack first in that case. Even if they don't there are 12 free trade deals on the table already for the UK and Trump/Clinton will cook one up in about 5 mins.

WTO will be fine, better than the EEA halfway house. Passporting withdrawal will leave the EU with its source of funding outside the the hands of the hated Anglo-Saxons.

Europe's fucked, best we make this clear to them. I am leaining Leadsom or Gove for this reason.

Anonymous said...

I think the politicians have a duty to deliver something that reflects how people voted, given it was pretty well 50/50 the Norway deal seems fair.

I personally will blame ordinary people for the mess that ensues, we have/had it pretty good here, by no means perfect but alot of the things we could have improved we were free to improve regardless of our membership of the EU, but people want a free meal, they think they can vote leave, the politicians will do some magic and their life will get better, they didn't think of maybe working harder, getting more qualified, taking some risks and starting a business, no they just outsourced their fortune to a tick box and will be disappointed when it doesn't deliver, big fking surprise!

Anonymous said...

Anonymous 10.49 - How many of the 48 were scared into voting Remain by the relentless Project Fear ?

The People who voted Out were wise enough to see the future of the EU rather than focus on the present.

No-one wants a free meal. Most don't mind hard work. They value above all else safety in their beloved nation state - one which the EU seeks to abolish.

A mess is ensuing anyway and I advise anyone in doubt to take a short easyJet flight to southern areas of the EZ. Parts of it look like Africa but without the women and children.

Anonymous said...

Same applies to the 52 that voted out, how many were conned into it by project utopia, sure the EU is long term going to fail/scale back dramatically but is now the best time/circumstances to leave under? I'd argue that its the worst time as in its dying years it will become more protectionist and punishing to outsiders to discourage others from leaving.

I concede that I don't get patriotism, or really care about this idea of a nation state, to me whether the person making laws is in Brussels or London either way they are faceless, the only thing i care about is that i'm only paying for one of them, and really i don't see why the many of the laws or decisions change based on countries i.e. any good reason why recycling policy shouldn't be the same between us and spain?? But i get that certain things should be devolved down, the Netherlands will probably want to control anything that relates to flood prevention very differently from Spain. So this whole "we've got our country back" argument is alien to me, all you get a say on is your local councillor and your local MP, if you don't like the laws our newly empowered courts invent will voters have any more control over them, not really.

Anonymous said...

How many of the 48 were scared into voting Remain by the relentless Project Fear ?

Genius George must be one as he's cancelled the LTEP.

Cameron's "golden legacy" turning out to be brass.

Blue Eyes said...

CU I think you are right. We should act as though we are going bare WTO. The tariffs wouldn't kill us, but the government could soften the blow for the worst affected industries. Showing that we are preparing for that outcome ought to concentrate minds on the other side of the Channel. My guess is that some rEU governments are expecting that the UK will either backtrack or accept a cosmetic change and then stay in. But we will only ever get a decent trade agreement if we plan for not having one.

EK I don't know if the wailers are holding anything back, but it is getting boring. Social media are full of ridiculous reasoning! Dry your eyes, dust yourselves down, and crack on.

Blue Eyes said...

CU I think you are right. We should act as though we are going bare WTO. The tariffs wouldn't kill us, but the government could soften the blow for the worst affected industries. Showing that we are preparing for that outcome ought to concentrate minds on the other side of the Channel. My guess is that some rEU governments are expecting that the UK will either backtrack or accept a cosmetic change and then stay in. But we will only ever get a decent trade agreement if we plan for not having one.

EK I don't know if the wailers are holding anything back, but it is getting boring. Social media are full of ridiculous reasoning! Dry your eyes, dust yourselves down, and crack on.

Anonymous said...

Anon 12.55 - Well Osborne would cancel long term plans. Hopefully he won't be here for long, that's why.

(His performance in the referendum was woeful.)

Steven_L said...

I reckon key is whether candidates will commit to a three line whip on any vote to restore parliamentary sovereignty to Westminster.

Without a three line whip no such motion has a hope does it? Even with one, the government could be defeated and have to go back to the nation.

The are tories abandoning deficit reduction as a key plank of their manifesto, and softening their stance on the NHS. They are headed for the centre ground that labour have vacated.

If labour elect a sensible leader and come back onto it, we could yet conceivably end up with Northern Ireland-style (and the way Scotland is going Scots-style) politics where voters back 'in' or 'out' in a general election.

MyProstBrexitName said...

@Anon 12:55

Poor Cameron; He's going to be the one child that everyone remembers in school because he shat his pants.
What a legacy!

House prices down by ~30% by years end, 18 months of very, very bad economic new; much worse than anyone expects.
Thereafter the UK will emerge as a member of the EEA with EU Parliament representation and a sleeker, more honed economy a la Singapore or Hong Kong. Much City business to be lost to Euro mainland but will fail because of amateurish legal and regulatory regimes. Core, 'post financial', financial services to remain in UK w/ possible brass-plate EU prescence.
Higher taxes - personal and business - but higher exemptions too.

Intelligent people could swing this hugely in Britains favour, but EVERYONE will have to sacrifice something important.

Anonymous said...

MPBN - Good. Then everyone will hate the EU !

Anonymous said...

Only trouble withe the Singapore/HK idea is that we're not full of Chinese - average IQ 105. We've spent the last 40 years encouraging the brightest women to do doctorates and have one designer baby at age 38, while paying the least bright to have as many kids as they want, then when those kids grow up they're told they just can't compete and it's their fault they're unemployed.

Singapore was also fortunate to have the benevolent dictatorship of Lee Kuan Yew, the kind of leader a country gets once per few centuries.

Electro-Kevin said...


We are in a strong position. Angela Merkel is going to have problems with her own people soon. They are already miffed with her over her immigration policy. Now they see that London is to leave just as Ankara seeks to join.

750,000 car workers distributed throughout Germany are not going to be pleased with loss of trade with us - either by politics or by our own economic downturn.

I am in contact with German friends of my social class and they are not happy with the EU either.

Electro-Kevin said...

PS, My German friends have great sympathy with our decision.

Nick Drew said...

On the subject of Germany, this is an interesting piece (you may have already seen it) - could be the Germano-Frog elite intends to zoom their countries off over the horizon before their own voters can say 'hang on a minute ...'

on the subject of house prices, I'd be interested to know how may of the 'dispossesed' Brexiteers care two hoots about the prospect of softer house prices: not a few of them are generally complaining their offspring can't ever get n the propoerty ladder

of course we may be sure the Toynbee crowd are extremely disconcerted, fuck'em. They may like to consider what happens when >50% of the population feel they have no longer any stake in the status quo, and reflect (in the mirror) upon exactly who brought this about

My2ndPostBrexitName said...

@E-K - I too have spoken to many foreigners. IN fact on the school run all of the Polish and Spanish parents I spoke to were in favour of Brexit; the Polish in particular were very fearful of the Germans. Natch, I suppose.

@ND - I love to see Toynbee et al squirm and scream, I'd vote for anything to see that.
Heres a thing though that might have you all looking differently at her and Carney etc... The lefties and bankers have been commenting on this in unison for one reason; they all see people the same way. This is their demise.
Firstly, they see Human Beings as nothing more than economic inputs in an ideological masterplan. The people have no value in and of themselves only in their usefulness in attaining the Grand Project; a political Utopia, (where some are more lauded than others, obviously.)
Secondly, in their sneering at the 'stupidity' of people who voted for Brexit, they have revealed that they see themselves as more intelligent and therefore more deserving than others. Intellect is the only virtue of the Human. Love, Family, community, hobbies, friendship can all go to hell because they dont add anything to the GSP.

So we see a mentality that values intellect as the only virtue and discounts human life as worthless beyond its economic value. We cant be too far from one of them suggesting that re-education be undertaken for the Brexit voters. In fact, if they live too far away they might suggest commandeering trains and to bring them to a camp en masse.

The NuLabour project is revealing itself for what it is, or what its roots are; quantitative management. The math-ification of everything. The diminution and ridicule of the Human experience. The enslavement of the individual life to a wholly pernicious doctrine.

Or in old money; fascism.

You read it here first.

Y Ddraig Goch said...

Nick Drew @ 5:14 pm

You can't post that link and then just leave it!

They are explicitly escalating all the European Superstate stuff that is already driving people away from the EU. Yet at the same time endorsing a multi-speed EU -

"we need to recognise that member states differ in their levels of ambition member state when it comes to the project of European integration."

and making Euro participation optional -

"We must therefore respect the wish of others to decide on their own when to join the euro."

Apparently, the EU we voted to leave, will soon cease to exist.

Nick Drew said...

YDG - yes I can! Prerogative of the www ...

(actually I think we will be returning to this many, many times)

Blue Eyes said...

Nick interesting question re house prices. As a would-be second time buyer I find myself extremely relaxed about falling houseprices. While the prospect of losing the hard-earned equity I have built up over the last few post-crash years, I reckon I would be overall slightly better of if current prices fell by less than about 50%. Any bigger fall than that would leave me in negative equity, and therefore a bit stuck...

If there is a substantial slackening of the market, I foresee the corset being loosened as well, allowing those of us on less-than-six-figure salaries to borrow more.