Manager view: “The Brexit camp lack an alternative economic plan”

1st March 2016


The lack of a clear alternative plan to an EU membership is Brexit supporters’ biggest weakness, says Rowan Dartington Signature’s Guy Stephens…

It is just over a week since David Cameron fired the starting gun on the EU Referendum.  The campaign will have lasted four months by the time we actually get around to voting on 23rd June and it is already turning into a media frenzy.  On one side, we have the incumbent Government with all the top job holders supporting David Cameron which includes the Chancellor, Home, Foreign and Defence secretaries.  A select few of the cabinet have chosen to support the ‘out’ campaign, with Boris Johnson being the main candidate with the most to gain should Cameron lose and inevitably have to step down.  A cynic would argue this is why he has chosen this position and his 24 hour delay on declaring his position suggested he was assessing more than his view on Europe.

So far, the clamour from industry and the heights of economic power and influence are overwhelmingly in favour of retaining the status quo.  The main argument appears to be ‘better the devil you know’ and that a leap into the dark on the basis of nationalistic emotion could well turn into a nightmare.  It does appear quite convincing to us that to unpick all that has been put into place since the UK joined the Common Market in 1975 will create a huge amount of additional bureaucracy rather than its removal.  However, nothing is written down as to what will happen if the UK votes ‘No’, and this is probably the biggest weakness with the ‘No’ campaign.  What is the alternative and what will it look like?  A Government analysis has already said this week that this process could take 10 years, already contradicted by Commons Leader, Chris Grayling, who is not surprisingly supporting the ‘out’ campaign.  Last week also saw the spat involving Michael Gove over the legal robustness of what has been agreed in Brussels, with yet more contradictory debate which the man on the street will not understand or be particularly interested in.

It should not be forgotten that it was David Cameron who started the whole debate in Brussels, where he embarked on a unilateral crusade ahead of the UK’s election last year.  It would now appear this was designed to appeal to Euro-sceptics, who may have been thinking of voting UKIP.  Observing the electoral results for UKIP would suggest that this was successful but now he has to deliver something substantive without splitting the Tory Party down the middle.  However, the vast majority of UK voters were hardly shouting from the rooftops, demonstrating about all the red tape and benefits for migrants as well as wanting this Referendum.  Is the anti-Europe feeling really that strong that voters will be prepared to risk the leap into the dark where no-one knows what lies ahead ?

This is very similar to the Scottish Referendum: where the rule makers didn’t want it, so they made no effort to formulate a plan for the supporters and therefore anything other than maintaining the status quo looked too dangerous and uncertain.  In that case, the collapsing oil price and departure of big business from Edinburgh was a key factor and the situation for an independent Scotland today would be looking grim had the vote gone the other way.

There has been lots of scaremongering with regard to importing and exporting to Europe, the Common Agricultural Policy and overseas comment from the US and China, all in support of maintaining the current position.  This involves the imposition of trade tariffs, the need for goods to clear customs when they arrive from Europe and vice versa, the subsidies our farmers enjoy and the guarantees they get for their harvest.  In addition, the US is in the process of negotiating a new EU Treaty and they very much want this to include the UK, probably more for their convenience than anything else.

Some high profile fund managers believe the economic arguments are marginally negative and certainly not as catastrophic as some would have us believe.  However, the man and woman on the street who votes will not care too much about the technical detail of trade agreements and the like.  They will be more interested in the personalities and job prospects as portrayed by the media  – and we all know the media loves a negative story.  However, it is interesting that both the Labour Party and Scottish Nationalists wish to remain in Europe, a rare alignment of recent views.

So, on balance, it looks like the ‘No to Brexit’ camp are winning the key economic arguments so far, with an information vacuum from the ‘Yes’ camp.  The bookies odds are currently 4/11 for ‘No’ and 2/1 for ‘Brexit’ which supports this.  Sterling has weakened since the announcement was made and demand for Gilts from overseas investors will have been undermined by the whole event.  Unhelpfully, we have another restraining bear feature for the UK equity market which will boost overseas earners whilst Sterling remains weak.  It will deter investors as the uncertainty builds as the currently unlikely just might happen if the pollsters are as inaccurate as they were ahead of the UK election.

Finishing on a lighter note, the next Eurovision Song Contest takes place on 14th May.  It is said that the Europeans desperately want us to remain part of the Common Market.  Perhaps this year we may actually finish in a respectable position, or maybe that is pushing it just a little too far.



9 thoughts on “Manager view: “The Brexit camp lack an alternative economic plan””

  1. Chaul123 says:

    Typical biased review to stay in the money pit Euro zone. Obviously written by someone with a vested interest.

    VOTE OUT on the 23rd June

    1. Jive Bunny says:

      If the UK leaves the EU:

      What is the alternative plan you have for the UK re trade agreements with EZ countries and EU?
      What would your approach be to trade agreements the EU has with foreign countries which currently include the UK?
      What are your suggestions re the CAP?
      What would you have happen around immigration of foreign workers?
      How would you deal with EZ Health and Safety legislation already embedded in UK law?
      What would you do about the FSCS Deposit guarantee scheme, the amount of which is currently dictated by EZ law?
      What would you do about visits from EU nationals to the UK re ease of access and admission to the UK (currently EU nationals have no need of visas)?
      What would you do about quality of water standards currently decided by the EU?
      What is your position on the UK Human Rights Act which contains the Human Rights conferred by The European Convention on Human Rights?

      1. Chaul123 says:

        I could pick at every one of your comments, and be here forever, but I’m not. In short, we trade with the world, that will not change.
        We have to many foreigners here as it is, why do you think the NHS is at breaking point, why do you think there is a housing shortage? The list is endless as with regards to the FSCS deposit guarantee scheme, why do you think the maximum amount has been recently reduced? Voting out will give this country the kick start we need so as not to be dragged down to the abysses by the EU and give us a fresh lease of life. Remember, they need us a lot more than we need them, period!

        1. Jive Bunny says:

          These are not “comments” (or indeed criticisms as the defensive tone of your response implies) to be picked at but are valid relevant questions requiring answers to demonstrate a joined up plan and way ahead for what happens next following Brexit.

          Yes, it will take hard work and time to consider and develop the solutions if the UK is to have a future following Brexit.

          The brevity and shallowness of your answer in that somehow, “Magik” will happen and it will all work out for the best proves the title of Guy Stephens’ article.

          1. Chaul123 says:

            Defensive, shallow? Hardly, short maybe as I get fed up reading pointless garbage about how great it will be if we stay in the EU. Personally I think you have your head so far up when the sun doesn’t shine that your brain is disengaged from reality. Would you trust Cameron in putting this country first? Perhaps you would, perhaps you have your own agenda or a VI. Personally I don’t care what you think as you certainly do not offer any benefits for staying in the EU, and yet the short sighted still bang their drum saying that it will be all wonderful world it would be if we did.

            It wont, not now, not ever.

          2. Jimthorp says:

            To Chaul123, and that’s it is it? No answer, just a vituperative tirade. Jive Bunny asks sensible questions that need addressing and your response is at the playground level of insult. I don’t think anyone thinks that staying in will suddenly be miraculous and the sun will shine forever. However, leaving does not guarantee any improvements and without articulating what it will mean you are simply asking us all to perform a bungee jump without knowing the length of the rope (if there is one). You have to do better than that.

          3. Jive Bunny says:

            Jimthorp, in defence of Chaul123 I did ask for that with my “brevity and shallowness” comment, although I am disappointed he has not answered the questions, unfortunately, I have thought of a bunch more questions if the first tranche are ever answered….

          4. Jive Bunny says:

            “…short maybe as I get fed up reading pointless garbage about how great it will be if we stay in the EU.”

            Hmmm, exactly where did I say it would be great to stay in the EU?

            You later contradict yourself saying ” “you certainly do not offer any benefits for staying in the EU” well that statementis certainly correct as I said to you previously these are “..questions requiring answers to demonstrate a joined up plan and way ahead for what happens next following Brexit.”

            Given your latest response I can only repeat from my previous post:

            “The brevity and shallowness of your answer in that somehow, “Magik”
            will happen and it will all work out for the best proves the title of
            Guy Stephens’ article.”

            As for “… I think you have your head so far up when the sun doesn’t shine that your brain is disengaged from reality.”

            I’ve noticed it’s a part of the human condition that people project their own characteristics onto others whom often don’t share such traits.

  2. David Lilley says:

    It is far too early to make up your mind about Brexit. Referendums are not democratic. We don’t want to be ruled by the 99% (majority rule is “vulgar democracy” and the rule of the majority over the minorities, Mill and Popper have made this case and it succeeds) we want to be ruled by the best argument which we achieve via parliamentary democracy. Recognising this, we haven’t had a referendum since 1975 when we had the referendum to join the Common Market, or the EEC as it was then. It was successful in that at the time of the vote everyone was fully cognisant with the pros and cons and I’m sure that this will happen this time. Please delay your decision until the 23rd June when you will be fully cognisant with the pro and cons. But having a referendum does allow “him” and “her” to have an equal say and many of them will agree with the great Neil Woodford that economic issues have nothing to do with it and it will all be about sovereignty and migration. And they will be correct, subject to the great discussion that will take place between now and the 23rd June.

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