Monday, 8 August 2016

The great Brexit terror

The Great Brexit terror reminds me of  research I did in 1959 about fluoridation of water supplies in New Zealand.In the first town to put fluoride in its water supply to prevent tooth decay a terrifying picture was painted  of the likely effects:head ache, nausea,bone collapse ,cancer and blindness , F day arrived and complaints from people suffering all the foretold symptoms flowed in.Except that the fluoride hadn't arrived. F day had been postponed

It's much the same with Brexit.Remainers argue that we've made a terrible mistake which must be reversed. Their terrifying warnings are all materialising.Trade groups like cars and construction warn of rising prices and falling outputs and every emerging problem including several that would have happened anyway is blamed on Brexit. Yet it hasn't happened yet and won't for two years and more.

The fear manipulators have ignored  crucial facts. Any government will take corrective measures when the economy slows .Theresa May has already abandoned the deficit reduction programme and will borrow to finance essential work.The Bank will add even lower ,possibly negative,interest rates to this and  a new dollop of quantitive easing though this time the Bank should buy back government bonds issued to finance infrastructure work.

The fear mongersalso ignored the fall in the pound from its unsustainably high levels. This is already stimulating exports  and creating jobs in exporting industries  and has further to go.A competitive  pound makes exports cheaper and imports (and foreign holidays)dearer .That's the lesson we should have learned from the last Tory devaluation in 1992 when we were forced out of the European Exchange Rate Mechanism That triggered growth and gave the economy a boost which lasted for several years 

As for the negotiations ;calm down dears.There's much less to fear than the nattering nabobs of the media like to pretend.They  want to build up tension while the scardy cats of the City,constantly fearful of loosing its Taxhaven on Thames role   prophesies disaster.It predicted the same in  1992 when we left the ERM and in 2003 when we didn't join the Euro.It was wrong then and wrong now. 

The City is in more danger from the greedy incompetence it showed  in the Green case and the dishonourable behaviour of the banks over rate fixing , than from any restrictions from the EU.It's best selling point has to be  efficiency and integrity not its willingness to collude in corporate swindles,tax avoidance and huge fees for selling British assets.

As for manufacturing it will keep its access to the single market.Britain is in deficit in manufactured trade So any restriction hurts them more than it hurts us,and in the unlikely event that theY impose the common external tariff against us the  devaluation will allow manufacturers to take it in their stride.So all we have to lose is the onus of supporting French agriculutral protectionism in every trade negotiation .That  will make country by country deals a lot easier. 

Which leaves immIgration We need it. It's a driver of growth but the numbers do strain education health,housing and social services. So why not accept freedom of movement on short and (for the skilled) long term permits,provided the EU  compensates us for the costs of upgrading the supporting services including housing That will  allow us to cope with the numbers coming with fewer social strains than we now have..

 Politically all that would work. The Scots and Northen Ireland will go along if they get a fair deal. The Tories are already coming back together and Mrs May has given the Brexit boys their chance to implement their dream. If they succeed she wins. If they don't she can always fudge up a new compromise to be put in a second referendum. So the real problem is not whether Brexit will work but whether  pro-EU opinion ,particularly in the Labour Party, will accept the necessary changes or whether Remainers will attempt to negate the verdict of the people by prolonging the fight over a decision that's been taken .

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