Question: How – as the May government now claims – are we going to expand trade across the rest of the planet when we make so little?
Like most people I went to bed on the night of June 23 pretty convinced the entire UK – not just Scotland – had voted to remain a member of the EU.
We were racing at Snetterton in Norfolk that weekend so I was pretty preoccupied with other things but needless to say I was not just surprised but completely astonished when I woke up on the 24th to find that there was a majority in favour of leaving.
However, I was very relieved to learn that Scotland had voted to “remain” by a very large majority because this provided the possibility of an escape from the economic mayhem I instantly knew was about to engulf us.
I won’t waste time cursing those that voted for “leave”. I’ve no doubt the sensible ones have already realised what a huge mistake they made. If they haven’t then they soon will.
The economic consequences are becoming obvious. Already, the huge fall in the value of Sterling has led to big losses for some companies including Rolls Royce engines who are now forecasting a loss of some £2billion.
The UK lost its cherished Triple A credit rating, the various FTSE indices have been bouncing around all over the place since, the manufacturing and composite Purchase Manager’s Index has fallen below 50 (anything above 50 signals growth, anything below means a decline in activity) and increasing numbers of economists are now predicting a recession.
Other consequences will unravel as time goes on but from the perspective of the energy sector it certainly means imports will get more expensive (including all those wind turbines we don’t make) and EU funding, for what little energy related R&D we do, will become difficult if not now impossible to access.
Exports should be more attractive but that may well be a false benefit if the UK can’t do a deal over access to the single market.
Collaboration between scientists and engineers across Europe in academia and industry is an important mechanism for the exchange of ideas, developing new technologies and mainly in the case of our European partners, bringing them to market. Already, UK organisations are being excluded from new EU programmes.
Scottish universities in particular rely heavily on a flow of overseas students, many of whom come in from the EU to study at both graduate and post-graduate level. There is a strong possibility they may no longer come here.
The other consequence was, of course, a change of Prime Minister and a substantial reform of government departments.
I listened carefully to the speech given by new PM Theresa May where she talked about establishing an industrial strategy and defending UK companies from overseas takeover.
Music to my ears but of course much as my instinct told me at the time, she didn’t actually mean what she said.
In fact, just a couple of days later, she and her government waved through the sale of the UK’s most important technology company to a Japanese buyer.
Both May and the new chancellor Phillip Hammond claimed this was a vote of confidence in the UK economy. That was drivel!
It was a consequence of the fall in the value of the Pound and the fact that the City – as always – wanted the deal irrespective of the industrial consequence.
It’s also true to say political animals like May and Hammond haven’t a clue as to the importance of such companies and will therefore maintain a laissez-faire approach to ownership.
At the same time of course May killed off the Department for Energy & Climate Change and merged it with the Business Department to form the Department of Business, Energy & Industrial Strategy (BEIS).
Despite praise from the journal New Scientist for a speech on the economic impact of climate change given by Greg Clark, the new secretary of state at BEIS in 2009 (seven years ago) I expect nothing much to change.
Fact is, the impact of the May government’s policies on the “green sector” have so far been disastrous resulting in major job losses already and companies even going bust.
Following “Brexit” and the decline in the economy I can’t see how the government can possibly afford to reverse any of those policies and I certainly don’t see how any effort – financial in particular – can go into doing the thing we really need most which is establish an indigenous clean technology manufacturing sector to support all this exporting we’re now told – post “Brexit” – we’re suddenly going to be able to do.
Truth is that “Brexit” was a con and is going to lead to a massive economic contraction even for our glorious financial service sector, the great City of London, so dear to the Conservatives and Labour parties and which has done so little to support UK industry.
It’s now highly likely the banks and others will lose their so-called “passporting” rights. That means much reduced access to the market for financial services in the other remaining 27 EU states.
We need to be honest about this. The UK has spent the past 40 years in what I describe as “creeping industrial and economic decline” which has led to a highly unbalanced economy where manufacturing is now a shadow of its former self and services – particularly financial services – and retail have expanded dramatically.
So quite how – as the May government now claims – we’re going to expand trade across the rest of the planet when we make so little I really don’t know.
I can only assume that, when the London government talks about trade, it means services and mainly financial services at that. If so, then they could be in for an unpleasant surprise.
Scotland though has a get out of jail card. It could, if sensible, vote to leave the UK and take up its own EU membership. It did after all vote to “remain” and it’s important to recall that the 2014 independence referendum was won on what can now be seen as a false promise that a “No” vote meant Scotland staying in the EU as part of the UK.
There have been encouraging noises on Scotland’s membership coming from EU sources and despite “the usual suspects” all moving swiftly to try to discourage a second independence referendum it seems to me there is really no alternative now.
Those opposed have a lot of explaining to do, notably on questions such as how come the Danish and other small country’s economies are so much broader, larger and more robust than Scotland’s?
It’s not now a question of being better together but being a lot safer apart. Scotland can’t really afford to have its economy dragged down even further because of a ludicrous EU referendum that was only held to placate internal Tory dissent.
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