Brexit Blues

A friend pointed me to this article: Brexit Blues by John Lanchester on the London Review of Books website.  You can find it here:  (or here if you wish to cut’n’paste : http://www.lrb.co.uk/v38/n15/john-lanchester/brexit-blues).

It’s an excellent piece which highlights many of the problems we’re now facing after the vote to leave the EU.  Well worth a few moments of reading and then a further few moments reflecting on it.

We’ve got a lot of work to do, just to stand still or even to get back to where we were before the vote.  I’m not certain that this has been recognised across society yet.  The “leave” campaign evoked all the jingoistic images of Britain standing tall, alone against the world.  But that’s just an unreal image of a time which can’t come back (if it ever existed at all).   It also had a society which was united.  Now its fractured along so many lines (political, class, nationality, religion, etc) that I find it hard to see how it can be joined together to do all the work that needs to be done.

What do you think?

A short post.  And a bit of a rant.  You have been warned. If you were wanting to ensure that an organisation you were responsble for is to fail, what might you do?   I know, it’s an odd kind of question as few of us set out to sabotage and ensure an organisation fails.  However…….

I might make it hard for the organisation to recruit new staff. Then I might make it hard for the organisation to keep those staff who currently work in it happy and motivated. After doing those, particularly to staff lower down the heirarchy in the organsation, then I’d sit back and think “Job Done”.  So if you did these two simple things, what do you think the effect would be over a period of say 4 or 5 years?

So when the Tories tell you they are investing in the NHS just re-read the paragraph above and remember they are doing this:

  • Imposing a contract on Junior Doctors which no-one in the medical sector thinks is safe.
  • Removing the bursary which helps student nurses and midwives.
  • Discussing sending back to their home EU country anyone who earns less than £35,000 pa.

Here’s an extract from the Royal College of Nurses NHS pay scales.

NHS pay scales

To get to the top of Band 6, I’m presuming takes a long time, many years of effort and dedication.  And it’s below the arbitrary threshold our Government is discussing.

So what do you think our Government is doing to the staff of our NHS?

I think they’re ensuring it will fail by making it an unattractive place to work. (Never mind all the real pressure on NHS staff from what they actually do every day) .

It looks like they’re just moving the recruitment problems over to Virgin Care, Circle, Spire, Care UK or any of the other private companies who are taking over the health service.  And that’s before you dig into the contracts and such like.

 

 

Falling apart at the seams.

There’s a bad smell hanging over Westminster, the still rotting odour caused by the collapse in anything like competence being shown by both the Labour and the Tory parties. While Labour are gaining members at an astonishing rate, almost taking in as many new members in a weekend as the total number of members of each of the  next two parties. (SNP and Tories)  this is because of their civil-war.  Tories, although  riding the crest of the new PM wave, have a heap of problems being stored up. However they have the Media, aka air-cover for Tories, helping them out by not actually asking any awkward questions and not publishing anything the Tories don’t want us to see.  Although the Tories are presenting themselves as reunified it still seems that the whole edifice of British democracy is on the brink of falling apart at the seams.

Tories

Although their world looks rosy, there’s more than a few storms coming for them.  And they’ve still got to cover up   explain their Election Expenses.  29 Police Forces were investigating this before the Brexit vote.  It’s all gone far too quiet on this, partly because the Tories have their air-cover deployed on bombing runs over Jeremy Corbyn  and the standing target of the SNP.  PM May might find her honeymoon period becoming very short when Parliament goes on holiday recess and the only thing all the people who voted “Leave” find is how much more their holidays cost.  How will this play out do you think?  MPs running away from the heat which the public are starting to feel.  Oh, and then there’s Boris.  Bumbling around the world.  This can’t end well for the UK, never mind the Tories. Pretty much everyone (IMF) is downgrading their forecasts for the UK economy over the next year. How on earth they can do any credible forecast when the Tories haven’t got a plan for the economy beats me.  Oh, and the Teachers are striking. And the NHS Junior Doctors aren’t likely to be happy about  their new forced contracts. And 3 million EU citizens who have made their homes here don’t know if they’ll be allowed to stay (unless they’re earning more than £35,000 pa)

Labour

Where to begin?   When the Tories were being totally incompetent and trashing the countries short terms economic prospects, Labour decided to ignore that and have a civil war of their own. And it’s not over yet by any means.  So they’re useless as an opposition  (plus ca change…..)  while the Tories are getting away with, well, anything they want to.

My predication – Jeremy Corbyn will again win the public vote with a massive majority.  The MPs will refuse to recognise this. Labour will split. There’s no credible way back to join the PLP with the  Membership Labour Party (MLP).

 

 

Ireland

This is the doosie of a problem which no-one in the UK Government, aka The Tories, are yet talking about. How do you have one part of that island in the EU and the other part out?  The Good Friday Agreement, which has brought a decent amount of peace to the island realies on there being an open border.  What’s the plan for this one?  What’s  the timeline?   The Taoiseach of Southern Ireland has called for the EU to prepare for border poll in Ireland to see the two parts reunited.  he even likened it to East and West Germany.  So how does that affect the “United” Kingdom?

Scotland

Where to begin too?   Nicola Sturgeon is playing a long game, exhausting all the other options before going to the country  saying Independence is the only way to ensure  Scotland stays in the EU.  By then PM May will be having to deal with the problems outlined above.  As time goes by the impact of the Brexit vote will start to work through the UK economy and the Scottish economy.  If, as seems highly likely, this creates further uncertainty, it kind of plays into the SNPs hands in terms of another Independence Referendum.   If things are failing in the wider economy because of decisions taken in Westminster – well, it’s hard to defend the competency of that house. So it’s game on for another Indy Ref.  My prediction – sometime next year.

Scotland wants to remain in the EU, England’s going out.  It’s a very DisUnited Kingdom.

The EU

Although neither our UK Goverment nor it’s air-support media seems to have noticed, when you have a negotiation it means the party you are negotiating with have a say in what the outcomes will be.  We’ve got a Minister for Exit who is making all sorts of claims about what the UK will get.  Maybe, just maybe it won’t be that easy.  Maybe, just maybe the EU side of the negotiations won’t roll over and concede everything which the UK wants. There are 27 Nations to satisfy on the other side of the table.  how can we be so sure they’ll all give in to Britain’s demands without seeking a very real quid pro quo?   What have we got that we could bargain with anyway?    (more on this some other time)

The EU has its own problems with the continuing financial fiascos in Italy causing serious worry.  Greece is still a can being kicked down the road as there’s no chance of that country ever being able to repay the debt that’s been piled on it. So the EU is most cetainly not the land of milk and honey.

 

Bottom Line

There are soooo many things, soooo many storms approaching the UK Government that it’s hard to see  how they can avoid crashing and burning on some of them. Teachers, Doctors have to be solved  – both sets of people who have decent amounts of public support.

What does the UK want?  It seems that Scotland and Ireland want something completely different from England.  It’s hard to see how that can be resolved without seriously compromising someone’s desires.

Is there actually a coherent plan from the UK Government?   Theresa May made some bold statements when she got the top job, her chancellor hasn’t said much at all.  So are we still on with the Cam/Osbo Austerity policies?  It seems very much like now that the Tories have settled their internal party civil wars they’ve kind of forgotten about actually governing.  The lack of any opposition and the continuing air-cover they have means no-one is really challenging them. Which isn’t good.

Not a very conclusive post.  Sorry…….

Out, out, damned Brexit….

….with apologies to Macbeth and William Shakespeare.  There is something ironic about where we are now though, compared to “the Scottish Play”.  The play has characters with vaulting ambitions who fall by the wayside, we’ve had characters with vaulting ambitions who’ve fallen by the wayside too, but we’ve not reached the last act of our play, in fact we’ve not even reached the intermissions.  Oh we’re in the middle of tragedy of Shakesperian proportions, that’s true. But what happens next?

We all know what’s happened in our play so far.  The Brexit vote took place and almost all the leading characters around it have been vanquished.  Not quite as bloodily as Shakespeare did, but still they’ve exited the stage.  So what are we left with – what might happen in the next acts in our play?    Ay, there’s the rub (Hamlet – sorry I’m mixing up my plays!) Look at where we are and what might happen – because the only certainty is that no-one,  repeat that, no-one actually can forecast what is going to happen to the UK in the next 12 months.  All that can be done is to offer some scenarios. Here’s some of the reasons why…

  • No country has ever invoked Article 50 to leave the EU.
  • No country has ever put itself in the position of needing to re-negotiate trade deals with almost every other country on the planet.
  • No country has done this with a an untested Goverment and a political system in turmoil.
  • No country has worked though issues like reinstating  border controls where they used to be, and possibly creating border controls where there are currently none.

 

“It’s the economy stupid…” 

Taking back control  is what Brexit was all about.  The vote however has had some possiby unforeseen consequences.  The £ Sterling is down by around 10% against the US Dollar $ and the Euro.  The chart below (sourced from xe.com) shows what’s going on.

dollar to pound

The ££ floats freely on the world markets which means that the market sets the exchange rates.  The UK Government doesn’t at present, try to set the exchange rate levels. (This has been done in the past, with mixed results).  So the markets are in control of the value of the ££.   When it drops, as it did on announcement of the vote and as it has more or less stayed at – that’s the markets telling us what they think our currency is worth.  And right now we’re all poorer than we were before the vote as the ££ doesn’t go as far.    How can this be when the FTSE100 has recovered so much I hear you ask?  Using the overall FTSE100 as a measure of the UK economy isn’t really a good idea.   Many of the FTSE100 companies are global and earn much of their money outside the UK.  Companies like Royal Dutch Shell, for example.  They are doing very well since the Brexit result because they measure their earnings in $$.  As the ££ is low so this give a boost to such businesses.  On the other hand, businesses which trade primarily in ££ have not recovered since the vote.  e.g. RBS.  So the FTSE100 ain’t the best tool around.  (I don’t really understand why we fetishise the FTSE100, even to the extent of having its movements scrutinised and reported on a daily basis across much of the media).  The FTSE250, which comprises of a better mix of businesses trading in the UK seems to me to be a better measure for the UK economy.  Now its getting there, pretty much back to where it was before the vote.  The chart below shows this.  (sourced from Yahoo Finance)

FTSE250

So the economy is in good shape right?   Well maybe……. The impact of the fall in the ££ hasn’t really fed through to the economy yet.  Imported materials will cost more but our exports should cost less for those buying them.  There’s a couple of  problems with this though,

1)  there’s a delay before the benefits of increased export activity can feed through to the economy because that export business has yet to be won

2)  The UK doesn’t have a good balance of trade position. (Understatement – it’s currently the worse it has ever been! see below sourced from UK ONS.)  The UK is a net importer of goods.  Thus, a lowering of the ££ is likely to make the balance of trade position worse, not better.

BoP current account balance

Although that’s a pretty depresssing picure, it’s not quite the whole story as the UK does run a positive trade in Services.  the difficulty we’re going to face is that such Services are outwith the terms of most of the Trade Agreements which are options for the future UK.  I’ll cover this in another blog post in a day or two.


Short Term, Medium Term

Anyone who thinks they can forecast what’s going to happen beyond the next 6 months is mad.  Here’s some of the variables they’d have to be considering:

  • When will the UK actually write the Article 50 letter?
  • What will Ireland be doing about it’s border situation?
  • What will Scotland do about another Independence referendum?
  • What is the UK Goverment’s economic plan?
  • How will all the other 27 Governments in the EU respond?
  • What’s going on in Italy with their banks?
  • What’s the impact of the current changes in Turkey?

 

That’s enough for a blog post for now.  As you can see, the UK has some real problems and challenges to get round in the short and medium terms and just wishing them away isn’t likely to cut it on the world markets.  Brexit may yet prove to be the best thing ever for the UK but the short and medium term costs could outweigh the benefits for a long time to come.

I welcome your comments and discussions.  No-one’s got a plan yet so maybe we can crowdsource one.

Coming Back To Life

It’s been a very long time since I posted anything at all on a blog.  I’ve been using comments on Facebook for that as Facebook facilitates easy discussion.  And talking and discussing is an important thing we should be doing these most divided of days.  So it’s back to blogging my thoughts – not that they’re worth anything more than anyone elses thoughts.  I hope anyone who reads this will make a comment and so can begin a discussion.  We’ve had  the EU Ref and a total spring clean in the UK Government. For better or worse we now are where we are.   What happens next?

Putting the band back together, coming back to life, that’s what I plan to do with this blog.  I’ll link it to my Facebook timeline so that new posts here will show up as a link over there.  (Or something like that!).  WordPress has changed since I last used it, so there’s some new ways of doing stuff that I’ll need to catch up on.

This blog’s been in existence for several years, but for most of them it’s been lying dormant, gathering cyber-dust and cyber-rust.  I’ve got work to do in blowing off the cobwebs, updating and completing much of the musical side,  selecting different images.  Better get started then……