Brexit – no, not another article- my critique

Clearly, no one day goes by where we don't see endless articles on Brexit this, Brexit that. Just like when credit crunch/ crisis was echoed to be the cause and effect of all things back then. A few generalisations, of course.

Pro-Brexit campaigners feel enthusiastic by a very British project: an independent UK challenges an undemocratic European power. So how do we get there… well, Brexit must be hard, not soft (where Britain keeps following European rules). Or was Brexit motivated by sovereignty, not immigration; “It’s about who runs this country: us or them, the Europeans.”

I’m not trying to “set things right here” but merely to explain my opinion/ observation. A larger majority of voters didn’t do a cost-benefit analysis on the referendum. They were guided by beliefs about where Britain’s place would be in the world.

I think Britain’s biggest project deserves ongoing attention, especially as all varieties of Brexit remain possible: hard, soft, no-deal or even no Brexit. Democratic votes can be reversed. Parliament doesn’t have the moral legitimacy to overturn a referendum, but voters could. After the referendum, I accepted that the UK didn’t belong in the EU. I thought Britain should become more like Switzerland: friendly to Europe but outside it. My kids’ are pro-European, pro-internationalist, pro-multiculturalist and pro-European freedom of movement- but surely most young folk would take that stance. Brussels is being maliciously stubborn in the negotiations as far as I am concerned. This indeed is proving damaging. I came across a quote where one European politician said that when one negotiating partner has all the cards and the other has none, the former will tend to thrash the latter. Is history repeating here, where during the Versailles treaty after the First World War, victor nations punished Germany- sorry I shouldn’t mention the war. If the people of UK think Brussels is being harsh, the next generation may not drift back towards Europe. Snobbish metropolitan views may well kick in at some point. Based on opinion polls, Brexit vote was predominantly southern and middle-class. Low income didn’t predict support for Leave.

Brexiters brilliantly use anti-elite rhetoric — hence the constant talk about poor, Brexit-voting northern towns. Remainers’ increasingly marshal the same rhetoric against the Tory government with a feeling that the EU was a Garden of Eden. Or was it really? That’s a matter of opinion… and worth pondering over.

Interestingly, Professor Minford of Cardiff University was the only one who provided some economic modelling on Brexit. He predicted that there would be a welfare gain of 4% of GDP by 2020 if the UK were to leave the EU. This prediction is surprising, considering every piece of economic analysis finds negative economic effects from the UK leaving the EU. Minford’s model (as a former university economics student) is inconsistent on two accounts on international trade; first, that trade satisfies the gravity equation based (Newton’s law) on normal trade; and second, the EU has been trade-creating, not to instil trade diversion. Unfortunately, Minford’s model is not the right tool to use for predicting the consequences of Brexit for trade and living standards. If I was to answer the hypothesis (true or false) then using economics common sense and the use of modern economics that incorporate international trade data and a more realistic assessment of how UK “unilateral trade liberalisation” could actually work will definitely point to the fact that Brexit will lead to a decline in UK standard of living. Please don’t get me wrong, I’m not here to argue, nor have I mathematically using statistics worked this out… it’s merely my view- rightly or wrongly.

I read this very morning that a Brexit deal is “almost within touching distance” and could be concluded within 48 hours, David Lidington, Britain’s de facto deputy prime minister declared. Mr Lidington, speaking ahead of a cabinet meeting in Downing Street, said he was “optimistic because we have managed to get things down to a small number of difficult issues outstanding”.

Here we go again...

I can bang on about Brexit largely because I feel surprisingly involved, but maybe it’s because I’m more of a British patriot than I thought. Being a Chartered Accountant and Treasurer bod, you may well say to yourself, what does he know about all this anyway? And my answer would be, well you’ve got me.

Dee Singh Kothari is a senior partner in Kothari Partners Ideas expressed and/ or methodologies in this article are solely of the authors. The author nor Kothari Partner’s accept any liability for the incorrect application of these ideas either used by companies, employees or other individuals alike.

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