Everything You Need To Know About ‘Brexit’ but was afraid to ask

Q: Why does it appear as though the Prime Minister and Chancellor are ‘fighting for their lives’ and seem to be going to ludicrous measures to ‘drum home’ the Remain case, even as far as bringing up the spectre of a ‘European War’ if Brexit wins?

A: Their jobs and reputations rest squarely on winning the Referendum. They would both suffer a premature and ignominious end to their illustrious careers if the result goes against them, since they have been planning this campaign for more than a year or so and it is now more to do with this, than whether the UK will be better off inside the EU.

Q:  The Prime Minister and Chancellor are now extolling the imaginary horrors of Brexit, but not four months ago – whilst they were negotiating the terms with Brussels, they seemed ambivalent about the matter.  What has changed in the interim?

A:  Absolutely nothing, but it does show you how their arguments follow the ‘hills and dales’ of judicious rhetoric, almost comically, as we move towards the date.  We all know their ulterior motives and the question must be whether you believe them.  I must confess that there is a palpable air of desperation in their strategy, which must tell you something i.e. in private polling, the Brexit poll is in the ascendancy.

Q: You don’t have to be a ‘rocket scientist’ to work out that the Terms offered by Brussels to the UK are lackluster at best and meaningless at worst. It must be an illustration of the obduracy of the EU hierarchy, that they would risk our leaving rather than offer us more appealing terms.  The question must be, Why didn’t the Prime Minister ‘come clean’ with the ‘Great British Electorate’ and concede that the deal offered by the EU is inadequate, but that he would leave the decision to the them at the Referendum?  This way, he would be the ‘jolly good fellow’ regardless of the outcome.

A: ‘Like it or lump it’ all incumbent governments have to be seen to support the status quo.  Even arch Euro sceptics such as, Margaret Thatcher and John Major, did so, begrudgingly, with the Maastricht Treaty and the ERM etc., however inane this must have been for them, at the time.

Q: Would inflation increase, house prices drop and the economy slow down after Brexit?

A: Absolutely not.  There are no capacity issues in the system that would give rise to inflation, particularly with food prices dropping and oil at an unprecedented low.  Yes, the Pound will probably fall against the Dollar, but it will remain in parity with the Euro, as both currencies will be temporarily affected by the Brexit result. Since a good deal of our goods are imported from the EU, this will not have an appreciable inflationary affect.

Property prices above £1million are falling now, as activity slows under the heavy burden of the following; Stamp Duty, Buy-to-Let and Nom Dom fiscal changes, the latter of which has caused an exodus of wealth creators and this has been the case for the last 18 months. There are very few International buyers at the moment, looking for property in London.

Values up to £1million, that have been rising due to the pre-election Stamp Duty ‘give-away’ in 2014, are now also slowing after the April ‘Buy-to-Let’ tax watershed. This has been of no help to the moribund first time buyer who has been caught between the ‘devil and deep blue sea’, by the rising property prices in sales and rentals markets.

The economy has been slowing now for the last year, with unemployment rising and whilst this is partly due to the world economic circumstances, it is not assisted by the four month hiatus before the Referendum, which was of the government’s choosing, ‘heavens knows why’.  The draconian property taxes imposed by the Chancellor have now started to infect retail spending trends and its predictable influence on the consumer led economy. The budget deficit seems to be intractable as the economy stalls and tax receipts wane. How on earth is the Chancellor going to meet his strict budgetary targets for deficit reduction by 2020, when he is hamstrung by his own manifesto tax commitments and a failing economy? Maybe it won’t be his responsibility in a few months’ time?

Q: Will the likelihood of War be greater with Brexit?

A: I have never heard such a load of ‘tosh’ in all my life. We are the 4th largest military power in the world and one of five members of the UN Council. The EU has no conspicuous President to speak of and does not think or function as one coherent continent and has been ambivalent, at best, to the conflicts on its doorstep, relying instead on the military initiatives of individual European members or NATO to solve the problems i.e. the fiasco in the Ukraine and the Balkans for example.

As under-resourced as the UN/NATO may be, they are the only bodies willing to globally intervene or negotiate any conflict on behalf of western nations and together with the US, this is what has kept Europe safe.  Cameron made this quite clear when he refused to attend the ceremony for the EU to accept the Nobel Peace Prize in 2012. If we have to leave peace to the EU, then we are certainly all in trouble.

In any event, why should Germany create a third World War when they have got it so good?

Yes, it is true that the six founding nations of Europe after the WWII wanted a commercial solution for a political imperative and they will certainly have one with a Federal Europe.

In the last war, in order to fulfill Hitler’s ambitions of hegemony, his idea was to ‘crush’ the Armies of each European country, but today’s Germany is far more discreet, since controlling the Treasuries of these countries achieves the same end goal, but avoids a war and therefore does not attract bad press.

The Euro is de facto a devalued Deutsche Mark, which allows Germany to export their goods at lower prices, to an ever-increasing basket of European consumers which has contributed to make them the second biggest exporters in the world today.

Q: Would the City of London abdicate its dominant position in the world to Frankfurt or Paris in terms of financial services?

A: London has been an emerging global force for financial services since the early beginnings of the coffee houses and early banks of the 17th Century and today it has emerged as the ‘Greatest City on Earth’. With Thatcher’s deregulation and reforms In the 80s, the Capital began its long march towards its pivotal financial status today, as many more IPO’s today take place here, than the former bastion of finance, New York.

London’s ability to reinvent itself, embrace change and new technology is unique and this is why today it is the financial fulcrum of the world and will remain so. Even Britain’s biggest bank, HSBC, has decided to keep its headquarters in the Capital, rather than moving to Hong Kong even before the Referendum result is known and this must act as a further endorsement for London.

Not only is the Capital ‘teeming’ with financial activity, but somewhat uniquely, all the centres of excellence of most industries are conveniently located in one place. Besides anything else, it is steeped in history and heritage and today represents ‘the happening place’ for culture, couture, cuisine, technology and it is where residents want to be, by choice, not necessarily by the confines of their jobs.

Has anyone been to Frankfurt recently?  Is it really conceivable that this sterile, soulless city would replace London as the financial hub? I don’t think so! Paris may be a fabulous souvenir City, steeped in history, but hardly an International Financial hub.

The voices of disquiet which are now trying to propagate ‘Operation Fear’, are the same ones that told us that we had to be in the ERM and subsequently to join the Euro in order to counterbalance the ‘mighty Dollar’ and the emerging ‘Renminbi. They deluged us with arguments that it was a ‘global play’ and we should not think like ‘Little Englanders’ anymore. Thankfully, we ignored them then, and we should ignore them now.

We can thank the Head of the Bundesbank in 1992, whose mischievous comments about our unsustainable position in the ERM, within minutes, led to our devaluation which, paradoxically, was the best thing that ever happened to the UK. This is what you call European solidarity?

The reason why big business is for the Remain vote is that they can negotiate with one large bureaucratic body, but this is certainly not the case for small businesses in the UK, which make up 95% of industry.

Q:  42% of our exports go to Europe, how will this be affected by a Brexit?

A: ‘In a nutshell’, we import far more goods from Europe than we export to them, hence our outlandish current account deficit. Indeed, the UK is the second biggest importer of German goods in the world. It would, therefore, be inconceivable that with Europe desperate to ‘claw its way’ out of recession themselves, it would deliberately impose tariffs on their goods exported to the UK.  It is also a nonsense that they would ‘try and teach the UK a lesson’ by putting their economies at risk and by delaying trade agreements with us.  In any event, we don’t need trade agreements to trade. The European economic model is far from a ‘paragon of virtue’. Collectively, their economies have not grown since 2006 and their employment rate is double that of ours.  You could say, that they should model themselves on us, rather than the other way around.

Is it not perfectly conceivable that after Brexit, the EU Trade Delegation will ask whether we would be prepared to go back to our electorate with a second Referendum, on far more beneficial terms?  Let’s be real here, they have a lot to lose (let alone us) by the absence of the second largest economy in Europe leaving ‘The Club’ after Brexit and this will be very damaging to their economic model and financial credibility.

Q: Migration and control of our Borders post Brexit.

A: The free passage of European citizens across Europe is fundamental to the political imperative that ‘lies at the heart’ of the EU model.  In theory, it was conceived by bureaucrats and had no capacity to cope with the influx of millions of refugees from say, Syria, Iraq, Libya etc.

The Turkish President Erdoğan, is a self-styled autocrat, who wants his dynasty to control Turkey – I wish the EU well in getting him ‘to toe the line’.  The country has done very well outside of the EU to date, but still ‘nurses’ an ambition to join ‘The Club’ and at present is trying to ‘bully’ its way in.  This effectively means that the welfare systems of the richer northern European countries (certainly within the Schengen Area), will come under further strain from some of the 77million Turks, Kurds and refugees who will then have free passage across the European continent.

The greatest windfall from Brexit is that we will have absolute and total control of our borders.  We are an ‘island nation’ and we should model ourselves on the Australian points system and then we will know exactly who and how many migrants enter the country at any one time. The Schengen Area is designed as a precursor to Federal Europe which we are not interested in, nor is relevant to us.

Q:  How will we influence a ‘reformed’ Europe if we Remain?

A: There will be no reforming of Europe. The model is ‘cast in stone’ and the DNA will never change – no matter how hard we argue to the contrary. France, for instance, is mired in the past and is totally resistant to change and any French President who tries to reform this socialist country, and its Institutions, will never be elected again.

There are now 28 countries on a one-member, one-vote basis. Does anyone in their ‘right mind’ think that one more vote, either way, makes any difference to the decision making process in Brussels?  Europe needs to Federalise, since this will provide the Euro with two vital components to sustain its long-term viability i.e. control over spending/taxation and a lender of the last resort.  At our own volition, we want to be excluded from this process, so we will be specifically shutout from any discussions which take place on this subject and therefore, be in the worst of all worlds – in but out.

All the Financial Institutions told us that by joining the Euro, we would be ‘world players’ in the global market and we studiously ignored them.  If Gordon Brown did one good thing as Chancellor, it was to keep out of the Euro.  It was the best thing we ever did.

Q:  Why are a number of leaders of industry, big political ‘beasts’ and even the American President being so pro Europe?

A: The Prime Minister and Chancellor are so anxious to win this Referendum, that for the past year they have thought of nothing else.  They seem to be exchanging favours with anyone who can be coerced into either joining ‘Operation Fear’ or in the hope that they support the Remain vote.  For instance, by demonising Donald Trump, however imprudent this may have been, the Prime Minister, ‘Call me Dave’, was trying to assist the US Democratic cause and as such, Obama repaid the favour by supporting the Remain issue, whilst on the ‘last lap’ of his European tour. He even ‘dusted off’ the last six US treasury secretaries to endorse this view. The tactic backfired, since the UK electorate does not like to be bullied and rightly so.

Q: Did it not seem odd that at a premature stage of the Electoral cycle, the Chancellor, in the last Autumn Statement, supposedly found £27billion of debt servicing cost savings, which he used as tax-giveaways to avoid the Tax Credit problem?  Surely, prudence dictates that when you are more certain of the deficit reduction programme later on in the electoral cycle, you would then be able to release these provisions, closer to the General Election so that your shop window looks as good as it can be at the critical time. Why the unedifying volte-face on Pension Reforms, Invalidity Benefits and Academy schools in the last Budget?

A: Both the Prime Minister and Chancellor could not afford either a Tory backbench revolt or an irritated electorate ahead of the Referendum vote and this explains the importance of winning this argument, no matter what the cost. The slogan ‘Desperate Dave’ seems to resonate.

Q: Why should the European Court of Justice ‘reign supreme’ over our August judicial system?

A: The temerity and arrogance of the EU is breath taking here.  The august UK Judicial system, which is adopted by many ‘far flung’ countries of the world and is the basis of all maritime law, is one of the longest established, most respected and fair systems in the world.  How could anyone question its partiality or efficacy?  What possible purpose could be served by establishing the European Court of Justice with supremacy over it?

Q: Will the UK be safer if we remain in Europe?

A: We are the forth largest military nation in the world and have one of the most sophisticated Intelligence networks. We deign to share confidential information with certain European countries (and not with others, we don’t trust) at our option.  It is the security of the European nation which will suffer by the UK leaving Europe, not the other way around.  Often the European Courts of Justice have prevented potential terrorists from being extradited to the UK for interrogation and questioning and this has interfered with our ability to seek justice and protect our citizens. The UK is therefore less safe, in Europe, than out.

A few things for you to think about:

  • If staying in Europe is such a good idea, why is the debate too difficult to establish and why are other European nations so fearful of consulting their electorate via a Referendum? Could there be any more important matter for a nation to decide upon than the seceding of sovereignty?
  • Europe is a ‘top-down’ ‘dirigisme’, undemocratic, corrupt and bureaucratic trading block which is a hangover of the past vision of the 1950s, long before there was an Internet and where adjoining countries needed to co-operate together because of their geographical proximity.  This outmoded notion has been superseded by the Internet, cheap flights and SKYPE.  It is as easy today to do business with New Zealand, as it is The Netherlands.
  • Why on Earth would we tie ourselves to one part of the world which has not experienced any significant growth?  Whilst India, China and even Ethiopia have doubled in size since 2006, Europe is the same size.  Every continent on the planet has grown, except for Antartica and Europe, in this time.
  • We do not sit on huge natural resources and trading is at the heart of our Nation’s ethos, but we are prevented from reaching trading agreements with other parts of the world, by EU diktats.  Why on earth are we paying a great deal of money to belong to the only stagnant, ‘Customs Union’ in the world?
  • The entire austerity programme since 2008, could have been wiped out by our net EU contributions.
  • We fought a Civil War in the UK to establish the principle that only our elected representatives should pass laws and raise taxes and if we Remain that privilege will be passed to the non-elected bureaucrats of Europe.
  • You would be insane to not want to work with your neighbouring countries, but the problem for us here, is that our neighbours want to take on the trappings of statehood and thereby undermine our sovereignty.
  • We have a once in a lifetime opportunity to escape ‘fortress Europe’ and this could be the start of our economic renaissance.  Regulation, which is rife in the EU, is the enemy of competition and competition is the engine of growth.

.   Why should we apologise and is it not natural and healthy for a Democracy to want to live under its own laws?  After all, we are the fifth largest economy on the planet and the second largest in Europe and how significant need we be to have the confidence to raise our eyes to more distant horizons and rediscover our own global vocation, that we once took so much for granted?

All in all, I believe that a vote for Brexit would be a great day for liberty and for free markets, a bit like that achieved by Margaret Thatcher in the 1980s.  I have no doubt that the 364 economists who signed the letter to The Times in 1981 condemning her macroeconomic policies would have sided with ‘Remain’.  Two years after that letter was sent, the markets ‘bottomed’ in April 1983 and UK equities entered a structural boom.  To summarise, if Brexit materializes, there will be dislocation, but it will offer an immense opportunity for those willing to take risks and extend the duration of their views.  ‘The end of horror is always better that a horror without an end’, runs the German saying.  By contrast, if Remain wins, the British caravan will maintain its slow crawl into Europe’s ‘death valley’ and the participants would do well to remember Dante’s invocation on the gates of The Inferno ‘Abandon all hope, ye who enter here’.

‘Till we have built Jerusalem in England’s green and pleasant land.’





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