“Effectively we are looking at a ten year recession” An honest Brexiteer writes …

October 11, 2017 at 11:14 am (Brexit, economics, enemy intelligence, Europe, identity politics, nationalism, populism, posted by JD, privatisation, reblogged, truth)

From Peter North’s blog (9th Oct 2017):

I don’t like this Brexit, but I will live with it

Now that we know there isn’t going to be a deal we can at least narrow down some of the possibilities of what post-Brexit Britain looks like.

In the first year or so we are going to lose a lot of manufacturing. Virtually all JIT export manufacturing will fold inside a year. Initially we will see food prices plummet but this won’t last. Domestic agriculture won’t be able to compete and we’ll see a gradual decline of UK production. UK meats will be premium produce and no longer affordable to most.

Once food importers have crushed all UK competition they will gradually raise their prices, simply because they can. Meanwhile wages will stay depressed and because of the collapse of disposable income and availability of staff, we can probably expect the service sector to take a big hit thus eliminating all the jobs that might provide a supplementary income.

Across the board we will see prices rising. There will be some serendipitous benefits but nothing that offsets the mass job losses. We will see a lot of foreign investment dry up and banking services will move to the EU. Dublin and Frankfurt. I expect that house prices will start to fall, but that’s not going to do anyone any favours in the short to mid term.

Since a lot of freight will no longer be able to go through Calais we can expect a lot more use of the port at Hull so we may see an expansion in distribution centres in the North.

All in all we are looking at serious austerity as it will take a few years at least to rebuild our trade relations with third countries. If we go down the path of unilateral trade liberalisation then we will probably find it hard to strike new deals.

Meanwhile, since tax receipts will be way down we can expect major cuts to the forces and a number of Army redundancies. I expect to see RAF capability cut by a third. Soon enough it will become apparent that cuts to defence cannot go further so we can expect another round of cuts to council services. They will probably raise council tax to cope with it.

After years of the left bleating about austerity they are about to find out what it actually means. Britain is about to become a much more expensive pace to live. It will cause a spike in crime.

Interesting though will be how rapidly people adapt to it and habits will change, thus so will the culture. I expect cheap consumables from China will stay at low prices and they manage to circumvent the taxes and import controls anyway.

What I do expect to happen is a lot of engineering jobs to be axed since a lot of them are dependent on defence spending. It will kill off a number of parasitic resourcing firms and public sector suppliers. Basically it will wipe out the cosseted lower middle class and remind them that they are just as dispensable as the rest of us.

We can the expect to see a major rationalisation of the NHS and what functions it will perform. It will be more of a skeleton service than ever. I expect they will have trouble staffing it. Economic conditions more than any immigration control will bring numbers down to a trickle.

In every area of policy a lot of zombie projects will be culled and the things that survive on very slender justifications will fall. We can also expect banks to pull the plug in under-performing businesses. Unemployment will be back to where it was in the 80’s.

The London economy will also change. Initially we will see an exodus back to the regions until rental prices normalise to the new conditions. Anyone who considers themselves “Just about managing” right now will look upon this time as carefree prosperity. There are going to be a lot of very pissed off people.

This will see a revival of local politics and national politics will become a lot more animated. I expect the Tories will be wiped out and we will have to put up with a Corbyn government for a while, but they will be tasked with making all the major cuts. We’ll soon see how far their “compassion” really goes. Even if Corbs does manage to borrow, it won’t go very far. It won’t plug the hole.

Eventually things will settle down and we will get used to the new order of things. My gut instinct tells me that culturally it will be a vast improvement on the status quo. There will be more reasons to cooperate and more need to congregate. I expect to see a cultural revolution where young people actually start doing surprising and reckless things again rather than becoming tedious hipsters drinking energy drinks in pop-up cereal bar book shops or whatever it is they do these days. We’ll be back to the days when students had to be frugal and from their resourcefulness manage to produce interesting things and events.

A few years in and we will then have started to rebuild EU relations, probably plugging back into Euratom, Erasmus, and a large part of the single market. It will take some time to plug back into the EU aviation market. The EU will be very cautious about what it lets us back in on.

Effectively we are looking at a ten year recession. Nothing ever experienced by those under 50. Admittedly this is not the Brexit I was gunning for. I wanted a negotiated settlement to maintain the single market so that we did not have to be substantially poorer, but, in a lot of ways I actually prefer this to the prospect of maintaining the 2015 status quo with ever degraded politics with increasingly less connection to each other.

I’m of the view that in recent years people have become increasingly spoiled and self-indulgent, inventing psychological problems for themselves in the absence of any real challenges or imperatives to grow as people. I have always primarily thought Brexit would be a reboot on British politics and culture. In a lot of ways it will bring back much of what is missing. A little austerity might very well make us less frivolous.

What I do know is that the banking crisis of 2008 set in motion a series of events whereby much of the corrective potential of it was dissipated with debt and spending, largely to preserve the political order. The disruptive potential of it was barely felt in the UK. Ever since we have stagnated and though the numbers on screen may tell a story of marginal growth, I just don’t see it reflected in the world around me. I still see the regions dying out and London sucking the life and vitality out of every city, including Bristol. It reminds me that the wealth of a city is its people, not its contribution to GDP.

Ahead lies challenging times. It will not be easy. Those who expected things to improve will be disappointed. But then I have a clear conscience in this. I never made any big Brexit promises. I never said there would be sunlit uplands. I did not predict that the government would make this much of a pigs ear of it, or that we would be looking at the WTO option. I expected parliament would step in to prevent that. That it hasn’t tells you a good deal about the state of modern politics.

And so with that in mind, as much as I would have had it go a different way, I think, given the opportunity to vote again I would still vote to leave. Eventually it gets to a point where any change will do. I prefer an uncertain future to the certainty I was looking at.

451 Comments

JD adds: the comments are well worth a gander

This is what Mr North wrote the next day (10 Oct) following the attention his post received in the Graun and elsewhere:

“explaining yesterday’s post which seems to have cause something of a stir. The short version is that I do see quite a lot of potential in Brexit to reboot British politics, not least because a trashed economy would finally settle this stagnant politics of ours. It would be the final big push to wean the British off the state.

“I suspect the reason the post went viral is because it’s probably the first time Grauniad hacks have seen honest Brexit motives out in the open. I see Brexit as taking toys away from spoiled toddlers – and if we can’t stop a hard Brexit then there is still a lot to be said for going the full monty rather than preserving the dismal status quo of retail politics. I can see how it will culturally reinvent Britain.”

15 Comments

  1. rotzeichen said,

    If we accept the Neo-Liberal agenda as expressed by the writer of this article, then we will have a disastrous Brexit.

    But there are certain premises within the article which are fundamentally wrong. Yes I do believe the Tories will deliberately crash the negotiations and I do worry some of Europe’s hard liners will not help Britain by cooperating with a smooth departure, neither do I believe that staying would improve our economic prospects and well being. It certainly has not been a great success story for us inside Europe to-date.

    So what has this article got wrong.

    1. We will be a sovereign state (unlike those in Europe) with it’s own sovereign currency. Which means in the words of Alan Greenspan that we can meet any obligation in our currency without limit.

    Alan Greenspan:

    “The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.” Alan Greenspan

    We have exactly the same Fiat money system as the USA, Japan, Australia, and Canada. Any doubters to this can Google Shinso Abe the premier of Japan who introduced unlimited Quantitative Easing into their economy and contrary to sceptics is stable.

    2. So what that means… unlike our counterparts in Europe, we can spend into our economy when and where money is needed, to fund our public services. The Tories are deliberately under-funding our NHS in order to privatise it and American companies are already poised waiting for it to collapse, so that they can buy into parcelled up parts of it, the fragmentation process created by the Tories has been to enable that to happen, claiming the great white knights in the private sector will take over from a deliberately bankrupted health system. (noting how the NHS and public services was always in crisis after they took office.)

    3. Clearly we will need to reform our agricultural system, if left to the Market as implied in this article, then catastrophe will follow, we are no longer self sufficient in our food supplies, but we can with planning change that, left to the market chaos will ensue.

    4. Again “Free Market” theology has destroyed our manufacturing base and the only way we can reverse that is by government investing directly in new fields of manufacture, that will never happen by free enterprise in the private sector as we have experienced over the last 30 years or more, the government has the resources all it will take, is a government with the will to do it, that means getting rid of the Tories and Neo-Liberal politicians that work for the corporate sector against the interests of people. People are the wealth creators in the economy, not wealthy people who exploit them.

    5. In truth Neo-Liberalism on this and the other side of the channel is the
    real problem, we can’t on our own alter the prospects of getting rid of Neo-Liberal politicians over there but can remove them here. If we look back to the second world war, our country was in a much worse state then than it is today. The Labour government intervened in the economy and set the economic consensus for the next 25 years, that gave working people living standards never seen before, until the 1970s when the establishment began to reassert itself and “Market” theology took hold, creating chaos and disenfranchising people, Thatcherism became the buzzword for what we now know to be Neo-Liberalism.

    6. Recent historical events prove life can be better than this, Europe cannot be sustained in it’s present form whether we stay in it or out of it, trade imbalances within the union, make it unsustainable, and without massive reform there, will mean lower living standards into the future and more political unrest.

    We can do things differently here, but we need a change of government to do that, and no, we can’t unlike countries in the EU namely Greece, ever go broke.

    • Jim Denham said,

      rotzeichen: I shall go through all your reformist/Stalinist rubbish in due course (if I can be arsed), but for now:

      “It certainly has not been a great success story for us inside Europe to-date”: what the hell do you mean by that?

      The UK economy has generally been doing OK over the last 45 years. Set-backs for the working class have been due to UK governments (ie Thatcher, New Labour), not the EU.

      So what the feck are you on about? More pseudo-leftist Little-Britainism?

      • rotzeichen said,

        Thank you for that response Jim, I rather regard that as a compliment coming from you.

        Anything you regard as fact must be dissected into minuscule parts.

  2. Glasgow Working Class said,

    The main thing is we are leaving the EU. We survived the Kaiser, Nazis and Soviets. The World will move on. Once we are out hopefully the EU citizens will move in our direction and boot out the Junkers…. No country should ever suffer the austerity that was inflicted on Greece by the EU. The EU is a vile corrupt poitical institution.

    • Mick O said,

      If you buy this analysis from North we’re in for the austerity after leaving the EU.
      Never mind, we’ll be able to wave flags and say up yours to Brussels.
      Kaiser, Nazis and Soviets?
      Get a grip.

      • Glasgow Working Class said,

        Tightening the belt helped Britain defeat fascism… The EU is Germany.
        All the little satellite members are pawns and shiting themselves if they are to become another Greek tragedy..Britain is not little.

      • Jim Denham said,

        Glasgow pseudo-working class: you’re fucking mad, as well as being a racist.

  3. Glasgow Working Class said,

    Jim, being brought up in Glesga East End in the stoor has probably affected my ability to think and contributed to my madness. I thought we were all black in the East End until we went for the weekly shower at the Steamie.
    Lucky we have sensible people around like yourself to keep us in place.

  4. Jim Denham said,

    Rotzeichen says “2. So what that means… unlike our counterparts in Europe, we can spend into our economy when and where money is needed, to fund our public services”:
    Rotzeichen, you’re talking bollocks: how, exactly, has membership of the EU prevented spending on the public services? Please specify. Please also explain how it is that spending on public services is generally higher than the UK’s, in the rest of Europe?

    • rotzeichen said,

      Greece Jim old Bean, Greece!!!!!

      Remember, or were you asleep during that period?

      • Jim Denham said,

        In the UK, which is what we’re talking about here, rotzeichen.

        After all, *you* wrote “we can spend into our economy when and where money is needed”: *we*, meaning (I presume), the UK government?

        So my question stands, “how, exactly, has membership of the EU prevented spending on the public services? Please specify. Please also explain how it is that spending on public services is generally higher than the UK’s, in the rest of Europe?”

    • rotzeichen said,

      “Rotzeichen says “2. So what that means… unlike our counterparts in Europe, we can spend into our economy when and where money is needed, to fund our public services”:
      Rotzeichen, you’re talking bollocks: how, exactly, has membership of the EU prevented spending on the public services? Please specify. Please also explain how it is that spending on public services is generally higher than the UK’s, in the rest of Europe?”

      What is it you don’t understand about the English language?

      2. So what that means… unlike our counterparts in Europe, we can spend into our economy.

      please note, “comparative”, unlike our counterparts in Europe. Mean we spend money directly into the economy or on our public services as described by Alan Greenspan. Conversely those in Europe can run out of Euros to spend, and then must borrow to spend, that is not the case in Britain although stupidly Neo-Liberal government choose to.

      I know that is too much for you to get your head around, so to make it as simple as I can for you.

      We have our own sovereign currency unlike those in Europe that gave up their sovereign currencies in favour of the Euro, therefore have to rely on the rules governed by the European Central Bank. That means when they run out of Euros they have to borrow, we on the other hand can print money electronically to meet any obligation as Alan Greenspan points out, without limit.

      If you doubt what I am saying perhaps you would like to read this Bank of England bulletin, that spells it out in detail for you.

      http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf

      Please note: the Bank of England states that Banks are limited to create loans, the limit is the borrowers ability to repay the loan and taxation and Interest rates remain the regulators of the economy. So long as borrowers in the eyes of the Banks can repay their loan there is virtually no limit to money creation.

      Finally by virtue of the fact that the Bank of England was nationalised by the state, the government is then through the Bank of England the issuer of our currency, which means that as the issuer, there really is no need for us to borrow our own money, the reason we do is because Neo-Liberal governments choose to do it that way.

      I’m sure that with a little latteral thinking you might even work that out for yourself.

      This little video though explains it in detail for you:

      • Jim Denham said,

        Reformist/Stalinist little-Britain political and economic illiteracy not really worth wasting time on …

        but on this occasion I’ll make an effort to educate this numb-skull:

        The Labour Party’s 2017 election manifesto made the following commitments:

        “Across the world, countries are taking public utilities back into public ownership. Labour will learn from these experiences and bring key utilities back into public ownership to deliver lower prices, more accountability and a more sustainable economy. We will:

        Bring private rail companies back into public ownership as their franchises expire.

        Regain control of energy supply networks through the alteration of operator licence conditions, and transition to a publicly owned, decentralised energy system.

        Replace our dysfunctional water system with a network of regional publicly-owned water companies.

        Reverse the privatisation of Royal Mail at the earliest opportunity.”

        Rail

        As a cursory glance at state-owned railways all over Europe will confirm, ownership is not a problem. Most European countries have state-owned railways. The UK is the exception, not the rule. It is true that EU law requires that infrastructure (rails, stations, etc.) be separate from the train services using them, but both can be publicly-owned or controlled, as they are in many EU countries. Railway companies from other EU countries, such as those operating services between Ireland and Northern Ireland or to and from the continent through the Channel Tunnel, are also entitled to offer services within the UK if they meet certain conditions. There is no reason why the UK could not bring private rail companies back into public ownership as their franchises expire.

        Energy and Water

        Energy supply networks can be publicly-owned and decentralised. That is the situation in many EU countries. It is also the case for water distribution. A big row erupted in Germany and Austria a few years ago when the EU considered opening water distribution concessions to a public tendering process. In those countries, and probably elsewhere, water distribution is handled by municipal bodies.

        The Commission was accused of privatising water, a resource to which people have a natural or God-given right (depending on your point of view). The EU replied that it was not asking anyone to privatise anything. A state or city can distribute water itself or set up an entity for the purpose, but if it grants a concession, the European Commission thought it should allow others to make a bid. To cut a long story short, facing massive protests and petitions, the Commission gave in and excluded water from its legislative proposal on concessions. There is no reason why a network of regional publicly-owned water companies could not be created or recreated in the UK.

        Royal Mail

        Renationalisation of Royal Mail by the compulsory purchase of privately held shares at market prices is a matter for the British Government. In many EU countries the state is the majority shareholder in the Royal Mail’s counterpart.

        State aid rules

        EU state aid rules have existed since the 1950s to prevent unfair competition. They have been in the European treaties since the very beginning, long before the UK joined. Subsidies and tax breaks have continued to be granted as part of industrial strategies, to attract investment or save failing companies. They have to be justified under EU law if they affect trade with other Member States. Governments of left and right have lived with the EU rules, complained about them and even praised them, particularly when applied to another country.

        There is nothing in the Labour manifesto which breaches EU state aid law. Individual measures would have to be approved. Rescue aid for companies in difficulty would require a credible restructuring plan to secure approval. Perhaps the best way to understand the challenge facing a socialist Government in the EU is to look back to the early years of François Mitterrand’s Presidency in France. Elected in 1981 on a political programme which makes Corbyn’s Labour Party look palely social-democratic, the Government included Communist ministers and set about nationalising banks and large industrial companies. Social protection policies were strengthened.

        Industrial policies were instituted to dynamise the French economy in key sectors. Some aspects of this were a continuation of statist Gaullism, others were more genuinely socialist in inspiration. Did Europe stop this happening? No, and when a choice had to be made between staying in the common market and going it alone, it was a French decision to choose the former.

        The grounds for doing so included internationalism and geopolitical interests and also the conviction that nationalisation and state-driven industrial policies did not require protectionism to succeed. Mitterrand’s Finance Minister, Jacques Delors, went on as President of the European Commission to turn that common market into a single market with the support of Mitterrand, Kohl and Thatcher. France chose open borders and continued European integration over some form of socialist autarky in one country. That choice survives in France to this today, having been challenged repeatedly from left and right.

        The history of the last few decades shows that Britain has the astute politicians, dedicated civil servants and clever lawyers to succeed in influencing the EU agenda. It may not have always been appreciated in Britain itself, but that is certainly the way it looked in many other European countries. There is no reason why a determined British social democratic Government of the type Corbyn proposes, could not be persuasive in promoting policies already, as we have seen, legally possible and politically plausible, as well as implementing them at home.

        Remaining a Member State would of course make that task much easier, but another status involving membership of or very close association with the EU’s single market should not make it unattainable.

        Rights at Work

        The 2017 Labour Manifesto sets out a firm commitment to strengthening and protecting rights at work. EU employment law is the backbone of many essential workplace rights in the UK today: working time, equal pay, protection of temporary and part-time workers, to name but a few. The UK has played an important role in shaping these rules and UK workers have benefited from the direct effect of EU rules in UK employment tribunals. The world of work is changing and the EU is currently looking at ways to strengthen its employment rules by modernising worker protection to deal with new forms of employment and promoting gender equality by proposing paid parental and paternity leave. An amendment to the Posted Workers Directive has been proposed to deal with concerns that workers from other EU countries are used to undercut national pay rates and protections. French President Macron has been very vocal on that issue. It would make sense for a Labour Government to work together with other European countries to shape and improve common employment protection standards.

        In conclusion, Corbyn’s social democratic agenda is entirely compatible with the EU’s social market economy and single market.

  5. Political Tourist said,

    Cough cough, does nobody on here keep an eye on AI.
    The article is relatively mild. Half the present day jobs will disappear within a decade. Ports??? Nobody heard of drones, 3D printers, the gig economy etc. 10 years and nobody will remember what a supermarket is. You’ll buy you groceries on line.

    • Glasgow Working Class said,

      And education on line according to the SNP dictate.

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