“I’m scared. Please tell me that I’m wrong…”

Brexit will be a disaster. But it’s what comes after that really worries me.

Leaving the EU will be a catastrophe. Many firms will relocate their manufacturing to the EU. The alternative would be to lose easy access to just-in-time supply chains, and to have to store vast quantities of components in warehouses, at ruinous expense. It will mean a loss of control. We will lose our say in setting the regulations of the largest free trade zone in the world. In order to keep trading, we’ll then have to adopt these regulations with no say in how they develop. Brexit will create enormous uncertainty in the economy, and companies will struggle to plan for the future.

A 4% loss of GDP will be very painful, but, even if it’s a 10% loss, we’d still be one of the richest countries in the world. That would matter less if the pain were evenly spread around the country, but it won’t be. The pain will be concentrated in the regions that can least withstand it.

The economies of some towns in the North and the Midlands, heavily reliant on the investment of international companies in their local manufacturing companies, will be devastated. And what will they then do?

In our fantasy, we’d like them all to vote Liberal Democrat. If only. We’ll say “I told you so”, and no one will hear us.

People in pain get angry. But, in their anger at the current crop of rogues, they’ll turn to another bunch of snake oil salesmen. And the people will get swindled again.

We’ve got these rogues already in place. They are the official opposition.

These are the people who called for a kinder, gentler politics, while they privately think that violent rioters are “the best of our movement“. These are the people who promised to reverse the benefits cuts, then chose to increase them. They undermined the campaign to stay in the European Union by refusing to share a cross-party platform, but were happy to share a platform with antisemites.

Many will say about Corbyn, “he’s awful, but the election system only gives us two choices, and he’s less bad than the Tories.”

What about when Corbyn’s socialist experiment fails?

In our fantasies, we like to imagine a golden future, with an inevitable Liberal Democrat revival. But what if it doesn’t happen?

There are plenty of other snake oil salesmen out there.

For a hundred years, communists and radical socialists have said the failures of the past were because communism wasn’t implemented thoroughly enough; it was a bad batch of communist leaders, but the new lot are fine; or that it was the fault of US sanctions.

It will be similar with radical Brexiters. They are already saying the impending Brexit catastrophe is all the fault of Theresa May, because she isn’t committed to making it work; that she didn’t negotiate hard enough; and that it is because of the intransigence of the European Union.

Are we confident that people will be immune to the siren voice of a new breed of dishonest right-wing populist? They may not have fake tan and blond-dyed hair, but if they mimic the awful rhetoric of Donald Trump, they may yet mimic his success.

This crisis is bigger than the Liberal Democrats. It’s the risk of a downward spiral, where disaster upon disaster will compound the folly of Brexit. I’m not alone in this gloomy prediction. Millions around the country can see a crisis building. But they aren’t switching to us.


Maybe it’s because too many voters think we’re like Hillary Clinton. When she described Trump supporters as “racist, sexist, homophobic, xenophobic, Islamophobic”, some didn’t vote for her because, although they didn’t think that accurately described them, they thought Hillary was referring to them.

I’d like to think that we recognise this national emergency. That we’re willing to compromise a bit, so we can build a wider, election-winning coalition, so that the country can avert this dystopian future. But too often, I hear Liberal Democrats making the same mistake as Hillary Clinton. They think they are tolerant, liberal, generous-hearted people. They don’t realise that, if they are careless in the language they use, they come over as anything but tolerant.

When I hear Liberal Democrats describe some voters as racists, bigots, authoritarians, or neo-liberals, I sigh, but perhaps I haven’t spoken out enough. That has particularly been the case when discussing those who voted Leave. If the majority of us want the party to be inclusive, maybe we need to speak up more. Even if we then risk being described as half-hearted, anodyne, and pandering to prejudice.

I wish I could believe that we are providing the country with an alternative that will avert this grim prediction.

I don’t want to be fearful for the future of my country. So, if you can reassure me, please explain why I am wrong.

* George Kendall is the acting chair of the Social Democrat Group. He writes in a personal capacity.

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  • Peter Martin 20th Aug '18 - 8:57am

    “Brexit will be a disaster” …………”Please tell me I’m wrong”

    OK you’re wrong! Happy now? No? I thought not 🙂

    But maybe you should take a look at the yield of 5 and 10 year bonds? The last time I looked they were about 0.8% pa for 5 years and 1.1 % for 10 years.

    So if the UK is about to fall off the cliff edge on the 29th March, why would anyone want to lend at such low rates of interest?

  • Graham Evans 20th Aug '18 - 9:16am

    I fear George that your analysis is spot on. If you read left wing blogs like Another Angry Voice and Nye Bevan news you will realise that Corbyn’s supporters are so committed to his leadership that they perceive anyone who does not wholeheartedly buy into his agenda as the enemy. While your appeal to moderation is eminently sensible, I think the fate of the Liberals Democrats is not in our hands. All we can do is hold on in there until the tide changes. It will probably take Labour losing the next general election for a more pragmatic, albeit left leaning, Labour leader to emerge, just as Kinnock did after Michael Foot, before the centre-left is able to successfully challenge the hard right.

  • George Kendall, you are right to be scared (we all should be) but not for the reasons you lay out.
    Perhaps in your anti-Corbyn/Labour tirade you might have read further than the headlines; the poll you highlight also says, “More people trust Mr Corbyn’s position on the EU to the Prime Minister ( 28 per cent to just 18 per cent.)”. You should also remember that Corbyn’s 7/10 for remaining was just about the only honest assessment among the hyperbole on both sides.
    As for ‘benefit cuts and Corbyn’s ‘socialist experiment”‘..I remember how enthusiastic LibDem ministers were in applauding the introduction of cuts between 2010-15 (“people in glass houses…”) and, far from a ‘socialist experiment’, Labour’s policies would not be deemed out of place in most of our European neighbours.
    As for joining the Daily Mail’s anti-semitic circus?

    When you wrote, “When I hear Liberal Democrats describe some voters as racists, bigots, authoritarians, or neo-liberals, I sigh” did you actually read your previous paragraphs; after all, who else would vote for the Labour party you describe?

  • Graham Evans 20th Aug '18 - 9:24am

    @ Peter Martin UK Institutions are still buy gilts because their liabilities are in sterling and this is the least risky way of matching assets to liabilities. The strength of an economy is measured by its exchange rate, not its interest rates, and by that measure the future for the UK economy looks bleak.

  • Peter Martin 20th Aug '18 - 9:36am

    @ Graham Evans,

    There’s a healthy overseas market for Gilts too.


    “The strength of an economy is measured by its exchange rate”

    This simply isn’t true. Germany could have a much higher exchange rate if it left the eurozone. It likes having a weak currency. Denmark could have a stronger krone simply by removing its unrealistic low peg to the euro. It likes having a weak currency. It gives them an advantage when it comes to selling their bacon into the UK. UK farmers would say an unfair advantage.

    Most countries manage, not to say manipulate, their currencies to give their export industries an advantage. The exceptions are the USA, UK, Canada, Australia. So guess who ends up with the trade deficits?

  • Hillary Clinton won the popular vote.

  • George, you’re wrong. See the following, passim


  • ‘Many firms will relocate their manufacturing to the EU’.
    Some firms, who are particularly reliant on export sales to the rest of the EU may indeed do so; but the UK is a net importer from the EU, and if both sides impose matching tariff charges the overall pressure will be for there to be an increase in manufacturing in the UK as companies shift production to minimise the extent to which their products are hit by those tariffs.

  • Mark Seaman 20th Aug ’18 – 10:52am…………..‘Many firms will relocate their manufacturing to the EU’….Some firms, who are particularly reliant on export sales to the rest of the EU may indeed do so; but the UK is a net importer from the EU, and if both sides impose matching tariff charges the overall pressure will be for there to be an increase in manufacturing in the UK as companies shift production to minimise the extent to which their products are hit by those tariffs………………………

    We manufacture very little and that ‘litle’ is mainly high tech stuff for export the ‘basics’ we import. So, building/equipping these new manufacturing facilities and training skilled workers will start when?

  • @Mark Seaman

    It is said that a car “manufactured” in this country crosses the channel effectively 8 times as different pieces are assembled and manufactured.

    And of course Brexit will mean more non-tariff barriers — paperwork, delays, bureaucracy etc.

    Where you going to build a car. In a market of 500 million were you can ship that car freely around. Or in a market of 60 million.

    If have tariffs then the pressure will be on those car manufacturers to actual build cars in the bigger market as more efficient etc. and just pay the consequences of those tariffs.

  • Graham Evans 20th Aug '18 - 11:57am

    @ Peter Martin If your economy is based on the export of manufactured goods like Germany a low exchange rate helps. Consequently central banks keep intetest rates down to try to prevent the exchange rate rising. However low interests rates are also introduced to help stimulate demand in a faltering economy. If you have fixed exchange rates as in the Eurozone, with countries at different stages of the economic cycle, this becomes much more difficult. In the early years after German unification the economy was struggling and to support Germany the ECB kept rates down. Unfortunately this led to an explosion of credit in countries like Spain and Greece where interest rates should have been much higher to cool those economies. Similarly, in the build up to the creation of the Euro, interest rates in Italy fell because investors thought that buying Italian denominated Euros, with a slightly higher rate than German bunds, was much less risky because of the support offered by the ECB and indirectly the support offered to the Euro by the strength of the German economy. It was not because they thought the Italian economy was thriving. Moreover the exports created by service based industries on which the UK is so dependent are often much less sensitive to the exchange rate. The UK’s low interest rates are a sign of a faltering economy, not a booming one.

    Incidentally, only 27% of UK government debt is owned by foreign investors. The BoE owns 23% with the rest owned by domestic investors, predominantly UK financial institutions.

  • William Fowler 20th Aug '18 - 12:03pm

    Many of the people who voted for Brexit are the ones who are going to be hardest hit… but they are not two years old when you could perhaps excuse them for not knowing that all actions have consequences. If the same people vote for Corbyn then they can expect hyper-inflation to wreck their buying power.

  • Graham Evans 20th Aug '18 - 12:06pm

    expats There are big barriers to increasing manufacturing in the UK. Eventually it may be achieved but in the meantime we will be faced with higher prices because of a falling exchange rate, as well as higher import duties.

  • I took a very simplistic view of the referendum and decided that the politicians and businessmen and women who were advocating Brexit were not the type of people I wanted running our country and I have not changed my opinion since, and as for Jeremy Corbyn, well enough said!!! There is only one party talking common sense and even if they are not getting the support they deserve it does not mean they are wrong. If only the media would give more time and space to the Lib Dems message.

  • George, you’re wrong. But not in the way you want me to tell you you’re wrong.

    We’ve spent almost a decade now bending over backwards to seem reasonable and accommodating to those whose values are inimical to ours. We have compromised and compromised and compromised and they have not shifted one iota. The result has been that the Overton window has shifted inexorably towards the populist and the authoritatarian, and every time it does we have gone “well maybe if we compromise a bit more…”

    It’s not working, and we need to stop.

    Jenny Barnes is right that people don’t trust us and don’t believe in us. We’re never going to get 100% of people to vote for us, but at the moment we’re not even inspiring 10% of people to vote for us. We need to be clear and principled and stop bloody compromising if we are going to give people something to believe in. And I’m afraid that means if people are saying things that are racist or sexist or homophobic or ableist we ABSOLUTELY DO NOT concede that they have a point, for two reasons:

    1, they haven’t got a point. They are wrong. Telling people who are wrong that they might have a point doesn’t do anybody any favours, including the people who are wrong.

    2, the few people who still believe in us are relentlessly put off by us constantly compromising with people who are wrong.

    If you want us to go from ~8% in the polls to 0% then you have offered the correct prescription.

  • Innocent Bystander 20th Aug '18 - 1:07pm

    “I see very little, if anything, of the blanket descriptions that you criticise, ”

    Sir Vince Cable made the very accusation you deny during a television interview earlier in the year asserting that Brexit voters wanted “white faces”.
    When the interviewer made the challenge

    ” ‘so you are saying Brexit voters are racist’.

    His answer included the magic word “probably”

    A claim that he qualified with the word “some” won’t stand as unless he has a specific list of names for his accusation of “some” then all who voted for Leave must assume he meant them.

  • Innocent Bystander 20th Aug '18 - 1:23pm

    I liked your thought provoking piece and I held my nose and voted Remain just because of the downside risks you highlight (even though I regard the EU as dysfunctional and any who think it isn’t can explain the CAP)
    But your concerns don’t matter as by the 1st of April 2019 we will all have died of cancer, starvation or be reduced to cannibalism. Every factory will have closed, all transport ended, just tumbleweed blowing down our streets, deserted except for the emaciated skeletons of the unburied dead.
    The Remain camp deluded themselves into believing that they would easily win the first Referendum. They appear to have the same delusion about a second.
    They won’t until they realise that their superior, domineering, hectoring angry and threatening finger wagging is exactly to wrong way to approach the British public.

  • Agree with Jennie, and add I’m getting fed up and bored with all the echoing of all the tabloid anti Labour stuff.

    Oddly enough I well remember the 1983 link up with the Social Democrats and judging by George’s rant it seems not much has changed. When, and it’s a big if, this party rediscovers its Liberal radicalism it might recover its self respect and support. Until then it’s in pale blue limbo.

  • David Bradley 20th Aug '18 - 2:14pm

    Can we please put this into context As a nation we have been around in some form or other for about 5000 years.
    In that time we have been we have been invaded (more than once) been devastated by epidemics fought in two world wars been through countless financial crisisand natural disasters but we have always pulled through and usually come out stronger in the end.
    We have now voted to leave the E.U this should not be confused with Eruope (which is a continent and has been here a lot longer than all of us).
    We have been bound to the E.U by E.U treaty for about 45 years which i would like to point out does allow any country to leave if they wish to do so.
    So all those who say it should be just cancelled because it’s the wrong decision please think very carefully about what you are saying people have died and are still dying today around the world for the right to vote which can not and will not be dismissed so easily no matter how much you can try and justify it with what seems like a good reason becuses do it once no matter how justifiable it may be the second time will be alot easier and then soon it will asked why bother having a democracy anyway the people always get it wrong so we might as well just tell them whats happening and soon the government won’t even do that.
    If we cash out with a no-deal will it hurt yes i it will, will it hurt the E.U yes i suspect it will.
    Who will it hurt most in the short term (to be perfectly honest in my humble opinion) us in the long term i suspect it will be the E.U that will hurt most but no matter what we are told this it not the end of the world.
    What we need is for each side so stop take a deep breath and start talking about the best way forward and above all start talking like adults

  • To answer your question, perhaps the greatest reason for hope, George, is that democracy and free speech and that includes name calling which is perhaps not the best way to win friends and influence people – over time gets it – more or less – right.

    The scenario I think is most likely is that there will be a deal, we will leave the EU, but within 20 years we will rejoin. I think that will mean that we have suffered economically over that time. But also it will mean a better EU. We have been a pro-EU party since the 60s but not an uncritical friend. Brexit – along with significant eurosceptism of about a third in many continental countries – will see less of a faceless bureaucracy trying to impose a “one size fits all” Europe on everyone and the continuation of strong sovereign European nations which is important for Liberalism.


    To continue your analogy essentially between Capitalism and Communism. The debate has raged often with a lot of name calling – “fat capitalist pigs exploiting workers as slaves = sending children down mines and up chimneys” versus “dangerous authoritarian communist dictators” = and there is truth in both. We have had perhaps more of this crude characterisations than detailed expositions of the weaknesses of both systems.

    But take someone from 20th August 1818 – a mere blink of an eye in historical terms – and transport them instantly to today. And they would be shocked how communist Britain was. Free healthcare. Free education to 18. Free food and shelter if not working. Pensions handed out. Votes for the masses and women! But also shocked at the massive capitalism providing the wealth for these things.

    Throughout those 200 years democracy and free speech has continually “self-corrected” and sorted out those areas that are suitable for “communism” and those for “capitalism”. I may be naive – I am sure we won’t have achieved perfection a thousand or even a million years from now and political debates will still be rumbling on – but I do have faith in democracy and free speech in getting us closer to that goal of perfection.

  • Innocent Bystander 20th Aug '18 - 4:16pm

    “I think Vince’s comments about racist voters was a mistake”

    Whether he meant it or not is immaterial. We have all “misspoke” at times but some mistakes are not forgotten or forgiven. This one confirmed in many minds that they had no right to question the value of the EU and if they did they must be racist.
    The economic consequences of Brexit are likely to be bad but I fear worse a second referendum. I feel the Remain side have convinced themselves (via a few polls and consider how accurate polls have been) that the Leavers now realise their “awful mistake” and are ready to apologise and correct it.
    Not a bit of it – there will be the ugliest of campaigns with one side claiming that the self appointed elite can’t be trusted to honour their promises and the UK and European Blairites are still there, behind the scenes, manipulating and bullying etc etc
    I sometimes believe that the Remain side expect a very polite debate of the form “We can now see that to Remain will cost each citizen two pounds fifteen shillings but to leave will cost two pounds seventeen and six so we obviously all agree to Remain”.
    I voted remain but I do not wish to experience an even more divisive and bitter rerun.
    I am only sorry that the LibDems didn’t take the opportunity to bind the nation’s wounds and bring us back together as a nation and find a way forward together rather than crushing the Leave side at all costs.

  • Mark Seaman 20th Aug '18 - 4:46pm

    @ Michael 1
    ‘If have tariffs then the pressure will be on those car manufacturers to actual build cars in the bigger market as more efficient etc. and just pay the consequences of those tariffs.’
    So in a market the size of the UK all manufacturers will ‘just pay the consequences’ ? … Until one maker decides to build entirely in the UK and then wipes those other manufacturers out of the market. It will not happen overnight, but it will happen as surely as water flows down-hill.

  • Peter Martin 20th Aug '18 - 5:53pm

    @ Grahame Evans,

    Yours is a rather convoluted argument. Low interest rates and a lowish exchange rate are a sign of weakness in an economy unless it is Germany when they are a sign of strength ????

    Oh come on! Interest rates are low in both Germany and the UK because anyone buying German and UK bonds knows they are a safe bet!

    No-one, whether UK or overseas based, is going to keep their money in pounds if they think we are going to crash and burn next year.

    What are all the supposed doom-mongers on LDV doing with their savings? If the pound is going to crash why not change your savings into euros or dollars before the exchange rate gets any worse? You know it would make sense!

  • @Mark Seaman

    The point about car manufacture is that it requires a large investment in a plant. So there tends to be one (or two) factories making a particular model for the whole of Europe. If demand is split according to population size – that’s about 10% in the UK to 90% to the rest of Europe but say it was 30% in the UK, 70% in the rest of Europe.

    The manufacturer you refer to who relocates to the UK to undercut its rivals paying tariffs – obviously benefits on the 30% but is disadvantaged on the 70% they have to export to make a return on their large investment.

    The second issue is as I say the car crossing the channel 8 times – parts will come from all over Europe and if you have to pay tariffs on those parts there might be significant tariff costs anyway. Even if there are no tariffs there are likely to be costs in delays, paperwork etc.which some are fearful will threaten the “just in time” model of car manufacture.

  • George Kendall Mon 20th August 2018 – 8:23 am:
    We will lose our say in setting the regulations of the largest free trade zone in the world. In order to keep trading, we’ll then have to adopt these regulations with no say in how they develop.

    Just pause and contemplate the equipment in front of you on which you are reading these words: a desktop computer, laptop, tablet or smart phone. How many of the tens of thousands of standards embodied in the hardware, software and communication methods are set by the EU? Can you name even one?

    Most standards and regulations are now set by international organisations and industry bodies. Outside the EU the UK will have more say in setting these, not less. Rather than having our position diluted to the lowest common denominator of 28 countries or ignored entirely before its even put forward, we will have our own seat at the table and in some cases, such as the WTO, a veto.

    For the most part the EU is a rule taker, not a rule maker.

    Cars? They’re covered by the United Nations Economic Commission for Europe – an historic name for an organisation which now covers the entire developed World…

    ‘Vehicle Regulations’:

    The UNECE Sustainable Transport Division provides the secretariat services to WP.29, the World Forum that incorporates into its regulatory framework the technological innovations of vehicles to make them safer and more environmentally sound.

    Brussel sprouts? Surely the standard for those must be set in Brussels? Think again…

    ‘Fresh Fruit and Vegetables – Standards’:

    Access UNECE Fruit and Vegetables Standards Brochures through Brochures and Publications from left menu

    The EU just takes these standards and rubber stamps them as an EU Directive…


    There is an entire universe of global standards and quasi-legislation. A vast ecosystem of global regulation which the EU adopts as a rule taker – forming the basis of all of its FTAs and most of the product directives.

  • Jeff: standard charging points.
    There, I’ve named one. Shall I assume you’ll be moving the goalposts now?

  • Peter Martin 20th Aug '18 - 10:03pm

    @ George Kendall,

    Are you the same George Kendall who writes articles for the same Labour website? So it’s OK for you to write an article but not for me to make a comment?


    I have voted Lib Dem in the past. But I usually vote Labour. Until the Brexit issue became predominant I would vote for whoever had the best chance of defeating the Tory. I suppose when the Brexit controversy dies down, I’ll go back to my previous tactical voting pattern.

    In 2010 I set up a website to encourage tactical voting. It’s gone now but is still recorded on the ‘wayback machine’. The counter in the link below isn’t showing the right figure. It got up to about 250,000 by the time polling day arrived and I had numerous enquiries to answer by email on how to vote tactically in particular constituencies.

    The Lib Dems did well in 2010 and I played my part in putting quite a few otherwise Labour voters your way!


  • Graham Evans 20th Aug '18 - 11:09pm

    @Peter Martin In the boom years German governments, like those of Japan and Switzerland, sought to keep their exchange rates low because so much of their economies were dependent on the export of manufactured goods. However this policy always had limited success in the era of floating exchange rates because until recently the tools at the disposal of central banks were limited. Consequently the exchange rate rose, indicative of a strong economy, in which further currency appreciation could be anticipated. Currency gains more than compensated for low interst rates. However a struggling economy, like Germany after unification and the UK after the Brexit vote needs low interest rates for an entirely different reason, namely to promote domestic demand. A struggling economy therefore suffers a potential double whammy. Its currency falls because foreign investors get both a poor interest rate and also anticipate capital losses on their currency holdings. Normally the situation eventually corrects itself as domestic demand rises, promoting capital investment by companies funded by cheap money. A virtuous circle develops as company profits rise and foreigners again renew their confidence in the economy. At this stage the central bank has to walk a narrow path between preventing the economy overheating by raising interest rates on the one hand, and seeing the currency appreciate as a result, thereby hitting exports.

    In so far as foreigners continue to hold some gilts it is impossible to really know their motives, though it may in some cases simply be a function of wanting a diversified holding of currencies. A FT article in 2017 sets out possible reasons.https://www.ft.com/content/389a25e8-fe8d-11e6-8d8e-a5e3738f9ae4

  • Peter Martin 21st Aug '18 - 6:05am

    @ Graham Evans,

    “In the boom years German governments, like those of Japan and Switzerland, sought to keep their exchange rates low because so much of their economies were dependent on the export of manufactured goods.”

    It used to be like that in the North of England, Wales and Scotland too. Manufacturing, with many goods for export, were a key part of the economy! It’s probably not correct to say that it was killed solely by a high pound. There were other reasons too but the currency was a major factor.

    However this policy always had limited success in the era of floating exchange rates because until recently the tools at the disposal of central banks were limited

    Central banks have, and always have had since currencies became purely fiat, all the powers they need in this respect. Say the BoE decided that the pound needed to be devalued by 20% or so and that the new exchange rate would be £1.00 = $1.00. So the Bank sells as many pounds as anyone wants to buy for $1 each. What’s the problem? Like the BoE will ever run out of pounds?

    The problem is the other way. If the BoE decided it needed to rise by 20% or so and the new exchange rate was going to be $1.50 then its options are limited. It can raise interest rates and that might help a bit. But the BoE can’t guarantee the pound to be higher than the market considers its value to be. It can’t run out of pounds but it can run out of US dollars or euros as we all learned on Black Wednesday. Except it was German DM then.

  • Arnold Kiel 21st Aug '18 - 6:20am

    Brexit is a project of the few at the expense of the many. Whose side are you on, Jeremy Corbyn?

  • Peter Martin 21st Aug '18 - 6:37am

    @ George Kendall,

    It may surprise you to learn that I’m not that tribal politically. John McDonell’s views, at least as they are openly stated, on economics are woeful. All that stuff about fiscal credibility rules is just plain junk economics. You’d probably agree with him on those!

    My only real ‘loyality’, are those I consider I owe to science. ie good science. I get quite upset when I hear ‘junk science’ espoused to justify doing nothing about climate change, for example. Fortunately the mainstream in science is ‘owned’, so to speak, by those who are in favour of good science.

    Not so in Economics. The junk economists have some how captured the mainstream. That’s why we have the Economic problems we do. That’s why the EU is a shambles with depopulation occurring on the periphery and no-one other than Germany, plus maybe a few smaller close by countries benefitting from the economic structure as it is. Junk economics reigns supreme in the EU! If it didn’t, the result of any referendum would have been a very easy win for remain.

    The articles I wrote for LDV were about improving general economic understanding. Or even just to get people to think about it a bit more. In other words, to do my bit towards getting it right and thinking about it in more scientific way.

    It is important to get it right. It was junk economics which led to the 30’s depression, which in turn created the conditions which led to WW2. With 80 million dead as consequence? We don’t want all that, and worse, again!

  • Innocent Bystander 21st Aug '18 - 9:03am

    I’m trying to follow. What did you mean by “standard charging points”?

  • Jennie 20th Aug ’18 – 9:46pm:
    Jeff: standard charging points.
    There, I’ve named one. Shall I assume you’ll be moving the goalposts now?

    I’m inclined to invoke the offside rule. The Common External Power Supply specification is an International Electrotechnical Commission standard (IEC 62684:2011) which incorporates a micro-USB socket specified by the USB Implementers Forum. Good shot though; the EU did initiate this and drove its adoption first (sensibly) on a voluntary basis. The danger with legislating in this area is that it can stifle innovation ( e.g. development of thinner phones which can’t accommodate the specified socket).

  • Peter Martin 21st Aug '18 - 12:13pm

    @ Richard Sangster,

    So you want the UK to partake “in EU decision making”? Some might say we can do that through the European Parliament, if we stay. But that’s just a talking shop.

    Everything of importance is done well away and behind closed doors. We can be behind those doors too , IF we are members to the same extent as France and Germany. ie with the euro, Schengen, and no opt outs.

    Is that what you want? If it is, how many others would want it too?

  • Who is it who said, “First seek to understand and then be understood.”? We live in an intolerant, xenophobic and mildly racist society so by speaking out about our ideal society, we alienate those we want to support us. We must be careful with our language and distinguish clearly our values from the practicalities of implementing them. A good rule of thumb is not to offend anyone, even your opponents as it rebounds. Also, talking impersonally about our society rather than specific segments of it might help.

  • John Marriott 21st Aug '18 - 5:59pm

    Don’t worry folks. After Brexit the U.K. is going to become an exporting “Super Power”. Who says so? Why, none other than a certain Dr Liam Fox MP. I wonder just how good a doctor he was. Could his diagnoses be relied on ? Second thoughts, perhaps we should be worried – VERY worried!

  • Jenny Barnes 20th Aug ’18 – 12:24pm:
    If I’m going to move my car factory out of the UK anyway, somewhere reasonably stable, close to the EU, where labour is cheap. The North African coast – Morocco/ Tunisia..maybe Turkey or Ukraine. Keep design where the skills are for the moment.

    Indeed; it’s already happening…

    ‘Is North Africa the next frontier for vehicle manufacturing?’ [November 2015]:

    North Africa’s strategic geographic location and its skilled labor force at competitive wages, has provided a perfect solution for vehicle manufacturers, allowing easy exports in order to cater to the needs of the European automotive industry. Furthermore, the region also serves as a gateway to the rapidly growing African and Middle-eastern automotive markets.

    Morocco has aggressively marketed itself as the new regional automotive hub for global automotive players. According to a 2013 report by PwC the Kingdom will be among the top-20 largest vehicle producers in the world by 2017. Renault, Delphi, Lear, Leoni, Yazaki, Faurecia, Sumitomo, and Hirschmann Automotive are some examples of key investment projects in recent years. These companies are not just providing employment, but, are also supporting a thriving automotive SME sector.

    Tunisia has a robust network of suppliers in the automobile wiring sector, and an abundant pool of skilled engineers and technicians at its disposal. The bigger benefit is the fact that the cost of hiring such talent is not only one-third the cost of that in the EU, but is also lower than its North African peers.

    ‘PSA will open Tunisia factory to build new pickup’ [December 2016]:

    The automaker will open a factory in Morocco in 2019 to build Peugeot and Citroen sedans. It is also in discussions with potential local partners to establish production in Algeria and is reestablishing production in Iran after sanctions were lifted.

  • Of course George, you are absolutely right to be afraid. The mess our country is in, has come about because the one pro-EU party allowed itself to be totally destroyed from the inside between 2010 and 2015, and alienated so many of the actual and potential supporters of its policies that it has passed on from being not trusted, to now being totally ignored.

    We can try to blame it on that spineless Cameron, that duplicitous Corbyn or just that devious Farage, coupled with robotic May and deluded Davis, but in reality it was that incompetent Clegg and his supporters who thought that it was OK for the Lib Dems to break the mould by breaking promises, and which abandoned the left of centre moderating force many of us had spent much of the last 40 years building up.

    Now there is no moderating force as far as most of the British people are concerned, and to be honest only a few who are now wishing they hadn’t lost faith with the Lib Dems.

    The consequences of never ending support for failure have now become almost inevitable and I don’t think there is any feasible way out that will do anything but heap praise and opprobrium in equal measure on whichever extreme decides it wants to march to the rescue (if one actually chooses to), leaving the Lib Dems with nothing to say except “we were right,” to people who no longer listen to us.

  • Peter Martin 22nd Aug '18 - 7:34am

    ‘After Brexit the U.K. is going to become an exporting “Super Power” ‘

    Mmm. Ok it would be possible if the pound was worth a lot less. Simply we couldn’t afford so many imports, the UK market would be a less attractive place to export to, our exports would be a lot cheaper for other countries, and UK manufacturers would be looking to sell in more profitable high value currency regions.

    We’d also be more inclined to holiday in Bridlington than Benidorm.

    So whereas Dr Fox is presenting this future vision as a success, it is unlikley that many people will actually see it that way if and when it actually does come about.

  • Peter Martin 22nd Aug ’18 – 7:34am………….‘After Brexit the U.K. is going to become an exporting “Super Power” ‘………………‘Mmm. Ok it would be possible if the pound was worth a lot less. Simply we couldn’t afford so many imports, the UK market would be a less attractive place to export to, our exports would be a lot cheaper for other countries, and UK manufacturers would be looking to sell in more profitable high value currency regions………….

    Importing parts/raw materials would cost more and, even if we magically produced these extra exports, where are these high value currency regions?
    The USA has tariffs, we won’t match the manufacturing economies of Asia on cost, Australia/NZ are too small a market (even if they chose the UK over Asian products), new tariffs will be in place for exports to the EU, etc.
    Try emerging markets like South America/Africa? (the GDP of the entire African continent including gold, precious stones and oil is less than that of Spain).

    In short, we should’ve stayed where we were. I agree with your and John Marriott’s ( 21st Aug ’18 – 5:59pm) assessment of Fox’s predictions.
    Fox has a lot in common with my great granddaughter; she, too, believes in fairies and Father Christmas.

  • Peter Martin 22nd Aug '18 - 3:22pm

    @ Expats,

    I agree with you that its highly unlikely that there will be a surge in UK exports if and when we’ve left the EU, just like there hasn’t been a surge of exports while we’ve been in the EU.

    If Germany is doing its bit for world trade by being a net exporter then the UK is doing its bit by being a net importer. We can’t all be Germany!

    Its all tied in with the Government’s deficit. The Government’s deficit is equal to everyone elses surplus or net savings. So if we divide up everyone else according to where they live then

    Government Deficit = Domestic Net Savings + Overseas Net Savings
    Overseas Net Savings = Current account Deficit.

    So, we should be happy that Germany wants to save the pounds that they earn selling us BMWs etc. Those savings enable us to run a budget deficit. It’s when we can’t do that we should start worrying!

  • An interesting factoid from the yougov poll is that among Remainers we are statistically tied with Labour on which party has the best policy on Britain leaving the EU (Lib Dem 17%, Labour 19%).

    While I guess it is obvious – it is interesting how split British politics is split on Leave/Remain lines with 71% of leavers supporting the Tories or UKIP and 75% of Remainers supporting Labour/Lib Dems/Green or nationalist.

  • George Kendall said: “There will probably be a deal, because a no deal could, literally, mean the planes stop flying.”

    Yes that’s true. But it begs the question, do we have any clear understanding of what “no deal” is supposed to mean?

    A low-level deal – Canada minus – would ensure enough goodwill to sort out a host of urgent administrative problems. If the final agreements on things like medicine safety, animal welfare, product certification, and flights had not been finalised on March 31st 2019 – Then there would be enough goodwill to cover these issues by temporary derogation. For example, the EU would permit UK goods to be exported to them without the necessary new documentation they would in principle require – at any rate for a few months, until smugglers emerged to take advantage of the confusion and force the EU to tighten up their procedures to our disadvantage.

    But what does “no deal” mean? It presumably means that the EU offers something like “Canada-minus” and the UK says “not accepted”. But what happens then?

    One possibility is that things turn very nasty, the UK refuses to pay the divorce bill despite being obliged to do so under international law, and the EU in turn make life as difficult as possible. Planes get grounded. Who knows, military exercises might even begin! But – A more benign possibility is that a minimal series of arrangements do get put in place to enable planes to fly, dying patients to get urgent medicines, etcetera.

    “No deal” could be a catastrophe, or it could be a major problem that falls well short of a catastrophe. It all depends on whether we get somewhere close to a war footing, or whether we can back off far enough to avoid absolute catastrophe.

    The implication is that we can’t define “no deal”. Justine Greening’s idea of offering it as a referendum option is a bad one, because nobody can be sure what it would entail. The same problem will arise with the Government documentation about to be published. There’s no one clear thing that means “no deal”. There are lots of variants. They are all dreadful, but they differ in how dreadful they are!

  • Peter Martin 23rd Aug '18 - 6:26am

    the UK refuses to pay the divorce bill despite being obliged to do so under international law

    Is this right? I don’t think so.

    The UK should always honour its obligations under international law but any payments to the EU after exit are, in the main, one for negotiation rather than any legal requirement.

  • Peter Martin 23rd Aug ’18 – 6:26am:
    The UK should always honour its obligations under international law but any payments to the EU after exit are, in the main, one for negotiation rather than any legal requirement.

    Indeed; if this payment is for accrued liabilities that we legally owe, then the £350 million figure used on the side of that coach may have been an underestimate.

  • David Allen 23rd Aug ’18 – 12:28am……………… If the final agreements on things like medicine safety, animal welfare, product certification, and flights had not been finalised on March 31st 2019 – Then there would be enough goodwill to cover these issues by temporary derogation. For example, the EU would permit UK goods to be exported to them without the necessary new documentation they would in principle require – at any rate for a few months, until smugglers emerged to take advantage of the confusion and force the EU to tighten up their procedures to our disadvantage………………….

    The scenario you suggest is contrary to WTO rules; if we continue to try and trade ‘as normal’ having left the EU bloc we will be in breach of WTO rules…

    Liam Fox tried putting forward a similar ‘fiddle’ ages ago. He suggested that meat, butter, eggs, wheat, etc., could be imported by the UK on the same terms (low or zero tariffs) as the rest of the EU; the USA, Australia, Brazil and New Zealand immediately objected and the idea quickly and quietly ‘disappeared’.

    What happens post Brexit will be carefully scrutinised by other nations who will not hesitate to cry ‘foul’ and take action.

  • Expats, you’re talking about tariffs, but I was talking about documentation.

    Certainly the UK cannot favour one country over any other country with which is does not have a trade deal, when it charges import tariffs. So if we are now charging Indian exporters a tariff when we import Indian widgets, then with “no deal” on April 1st we must either drop that tariff, or else start charging French and German exporters that tariff. Which will be nightmare enough.

    Safety clearances etc may be a somewhat different story. That great French medical product which we long ago determined was safe for human consumption won’t automatically need to be retested by the UK on April 1st. However, things might change once some clever criminal works out how to pass off a counterfeit version of that French medical product and rely on laxity in the confusion of no-deal.

    To quote the Sun reporter’s question to Raab this morning “Your no deal planning seems to assume you will do deals with the EU. That doesn’t make sense.”!

  • David Allen 23rd Aug '18 - 1:07pm

    Peter Martin,


    “Could we walk away without paying?
    If negotiations broke down later this year, and the UK refused to pay, the EU might seek redress through the International Court of Justice or the Permanent Court of Arbitration, both located in The Hague. The result of such a court case would be hard to predict.”

    Would you be happy to see Perfidious Albion evade its responsibilities via legal loopholes and technicalities? What do you think that would do for our standing in the international community?

  • Peter Martin 23rd Aug '18 - 3:56pm

    @ David Allen,

    There have been lots of discussion about this. The usual comparison is to say that when we leave a golf club we just leave without any further obligations. When we joined the EU we didn’t have to pay for the existing EU infrastructure nor did we get any thing back. So if there’s neither a refund nor a bill on joining, apart from the usual subscriptions, it would seem logical that the same situation should apply on leaving.

    But what applies to a golf club might not apply to the EU according to international law. That would be for the courts to give a ruling on – should the matter be failed to resolved amicably. It wouldn’t necessarily be a ruling based on loopholes and technicalities – which could work both ways of course!

  • Peter Martin 23rd Aug '18 - 4:07pm

    I must say there is a lot nonsense being put out at the moment. I’ve just seen on a BBC wesbite that UK residents in the EU might lose access to UK bank accounts.

    I lived in Australia for many years and there was never a problem maintaining my UK accounts! Why should it be any different after Brexit?

  • George Kendall 22nd Aug ’18 – 8:33pm:
    Benn was a passionate opponent of the EU, because it would prevent the kind of socialism and protectionism he wanted.

    Tony Benn was a passionate opponent of our membership of the EU because it is undemocratic.

    Here is a transcript of his famous speech, during a debate on the Maastricht Treaty, in which he explains why it was wrong for parliament to give away our democratic rights…

    ’Tony Benn on democracy and the EU – 20th November 1991’:

    We must ask what will happen when people realise what we have done.

    We now know the answer to Benn’s rhetorical question.

  • David Allen 23rd Aug ’18 – 1:07pm:
    Would you be happy to see Perfidious Albion evade its responsibilities via legal loopholes and technicalities?

    We’re not “Perfidious Albion” and there are no “legal loopholes and technicalities”. We have no responsibility to pay money which we don’t legally owe…

    ‘UK not obliged to pay Brexit bill, say peers’ [March 2017]:

    The House of Lords EU financial affairs sub-committee report, published at the weekend, concluded that there would be no legal obligation to meet a so-called Brexit divorce bill at the end of the exit negotiations.


    The committee found that, if an agreement was not reached during the Article 50 negotiations, “the UK would be subject to no enforceable obligation to make any financial contribution to the EU budget.”

    While you may wish to gift £40 Billion to the EU, most people would prefer to spend it on such things as the NHS, more police officers, social care, tax cuts for the low-paid, or reducing the national debt.

  • George Kendall,

    Thanks for your detailed expostion of what, at first sight, might appear to be the three main options which could be covered in a three-way referendum. However, I think there is a fundamental flaw – That only one of the three options, Remain, is sufficiently well defined to be offered as an option on a ballot paper.

    We don’t tell the electors of Little Wotting “Vote Lib Dem, and our candidate is either Joe Bloggs or Jo Smith, it hasn’t been decided yet, so just mark a cross against Lib Dem.” Yet the proposed 3-way Europe referendum really looks very much like that.

    “The Theresa May approach” is one of your proposed options. But what does that mean? The “Chequers deal” is not a deal at all, because the EU won’t accept it as it stands. Maybe they will insist on huge concessions, maybe they will accept smaller concessions, maybe Theresa will change her own mind and propose something not even thought about when the referendum vote takes place. How can anybody reasonable vote for – or against – such an ill-defined option?

    “No deal”, as I explained earlier, is equally ill-defined. It might just mean not agreeing an overarching deal of any sort but reaching a host of hasty accommodations by agreement with the EU to avoid the worst of the chaos. Or it might mean total rupture, each side spitefully acting to maximise hurt for the other side. How can anyone vote “no deal” when they haven’t been told which of the above options that means?

    I don’t want to be a destructive critic. I think some sort of referendum is the least worst solution. I think there are two possibilities that might be workable.

    One, TMay reaches a final agreement – or an agreement not to agree – or an agreement to agree only limited measures – and we then hold a two way vote, accept May’s agreement or else Remain. “No deal” is simply an illegitimate third option at that stage, though a problem is that many politicians will pretend that it isn’t an illegitimate option. The bigger problem is that there will be precious little time, probably not enough time.

  • (2/2)

    Two, we call for a “Brexit reset”. We tell Europe that Government and Parliament has failed to make anything work that can get approval from Parliament. We ask the EU to grant us an extra year. In return, we promise them that we will by that time have decided precisely what version of Brexit we will offer the British public, and reach agreement with the EU on that Brexit (and in the event of failing to achieve this by the specified deadline, Remaining). We will then hold a two-way referendum between the “agreed” final Brexit option, versus Remain.

    The EU could accept that, because it would be a viable and different plan with a clear outcome. It would be fair, because it would eliminate cakeism. The Brexiteers would no longer be able to pretend they could combine the emotional “advantages” of hard Brexit with the economic advantages of a Norway-like option. The Brexiteers would have to choose one or the other, and then the nation would at last see the reality of their choice.

  • Peter Martin 24th Aug '18 - 8:16am

    @ David Allen,

    That only one of the three options, Remain, is sufficiently well defined to be offered as an option on a ballot paper.

    Why is that any different? ‘Europe’ is changing all the time. In 1975 we voted to join a 6 country trading group known then as Common Market or EEC. In 2016 we voted to leave a 28 country grouping known as the European Union which is clearly a very different organisation. So what will be the EU in ten years time?

    And what will be the reaction of the other 27 countries who are less than impressed with our lack of enthusiasm for their noble cause of ever closer union, our unwillingness to share a single currency, or adopt the Schengen agreement, or pay according to the same rules as everyone else? Our insistence on not pulling our weight in the EU, as they see it, hasn’t gone unnoticed.

    So what will happen if we tear up Art50? Is that all going to be forgotten and we’ll be welcomed back into the fold like a prodigal son?

  • Peter Martin,

    Yes, Europe is changing. So is NATO, so are many organisations. That doesn’t stop us taking a clear decision now – e.g. to join NATO, or to Remain in Europe. So it’s one valid option on a referendum ballot paper.

    In hindsight, “Leave” was not a valid option on the 2016 ballot paper. It should have been either “Leave the EU, the single market and the customs union”, or “Leave the EU, but stay in the single market and the CU”. In other words, either “Leave, and gain freedom of action at the expense of a massive loss of trade and investment” or “Leave, gain only limited freedom of action, but retain most of our current trading advantages.” Instead we voted on “Leave, and let’s kid ourselves that we can keep all the good things and ditch all the bad things from the EU”. That won a slim majority, but it can’t actually be achieved, because the EU negotiators are not complete patsies!

    But you’re right, our bad behaviour has left the EU nations pretty fed up with us. That will make life difficult for us, whether we Brexit or whether we Remain. Frankly, Barnier is playing nice at the moment…!

  • john littler 24th Aug '18 - 11:53am

    1) Just in Time methods are not just crucial to manufacturing competitiveness, but are also used in many other areas, such as for medical drugs and materials, such as lifetime limited radioactive isotopes and in Supermarkets.

    Blithely telling firms to get warehousing will not work. Honda is one of the smaller UK car plants, yet would require warehousing equal to 42 football pitches to hold 9 days worth of parts to cover delays at ports on both sides of the channel ( export documents would be needed over there). Yet even if it were economic (it isn’t), those warehouses do not exist and where would they be built, or get permission to be built, in Swindon?

    Radioactive isotopes arrive in hospitals from EU country tries, just in time for operations and cannot be stored or they lose their effectiveness.

    Fresh food comes from EU countries ( 49% of all food) and if delayed at ports would deteriorate and could become unsaleable, plus it would not be on the shelf when required to meet the largely predictable flow of demand. There is no warehousing sufficient to store much of the UK’s food and if stored much would go off.

    WTO tariffs on cars is 10%, which is more than the profit margin, so how is that going to work. If the UK was expecting to sell cars to distant markets, the shipping costs would be too high and it would be cheaper to buy them from Japan, USA etc. WTO tariffs on food and agricultural products are a business killing 20%-40% or 100% in a few cases.

  • 2).
    The Commonwealth has 3 developed countries including the UK, of which Australia and Nz are getting EU free trade deals soon. Canada already has one. After that, the average income across the remaining commonwealth countries is under U.S. $3000 p.a., in which case they are not buying many UK exports. They could buy them now if they wanted to.

    If you take the entire continent off Africa and add up all of their GDP annual wealth, it adds up to just half of that of France. They are not buying Nissans made in Sunderland in any numbers any time soon.

    Grayling was recently floored by the British Transport Industry telling him that with a no deal, UK lorries would have no legal right to go to the continent and no effective insurance.

    90% of the UK’s exports are not done with the WTO, but with scores treaties signed by the EU, such as 20 with the USA alone. If the UK became the only developed country in the world to have tariffs applied to it’s exports by the weak and failing WTO, then exporters would be massacred.

    The Leave campaign are liars and charlatans and how on earth they have got this far is a mystery to me. But after the BBC reports on the news yesterday, I feel it has put the wind up many of the non political public who don’t follow this closely. Expect a shift in polls.

  • David Allen 24th Aug '18 - 1:01pm


    May needs a result which does not produce immediate blatant catastrophe. That’s why Chequers proposes a trading agreement on goods but not services. Many have argued that it is losing trade in services which matters more to the UK. But May doesn’t see it like that. Financial losses can be glossed away, but making the M20 a car park would hit the headlines, and see May thrown out of government!

    However, the EU won’t let May have Chequers as it stands, and the Brexiters will paint whatever is “agreed” with the EU as capitulation. Then Labour will have to decide whether to join with the ERG in voting May’s “deal” down. May will no doubt threaten that in that event, we must crash out with no deal. That threat may be enough to cow Labour into abstention. If Labour have the gumption to oppose rather than abstain, May will then have to decide whether to carry out her no-deal threat.

    That’s a no-brainer. She wouldn’t survive the catastrophe of no deal. She would, in this scenario, have to eat her words pronto, and find another way out. A referendum would be an awkward option because it couldn’t be organised quickly and nobody would agree what the question should be. Calling a GE would be much quicker and “cleaner”. That would probably be the only available drastic action that would persuade the EU side to extend Article 50.

    So – If Labour are “wargaming” this scenario – It will tell them that they can get what they want, i.e. forcing a GE, if they have the courage to oppose May’s deal. So, they’ll probbaly do that – and then campaign that May has made a pig’s ear of Brexit, whereas Labour can “do it properly”. They may then struggle to agree what that will entail…! but, with the EU thinking that “things can only get better”, Labour will probably win.

    Well… That mightn’t be the worst outcome I suppose. Especially if Corbyn has to cede some control to Starmer. But the mess won’t end in 2019 – it will last a generation.

  • Peter Martin 24th Aug '18 - 8:38pm

    @ David Allen,

    “…our bad behaviour…..”

    You can argue it’s unwise behaviour but it’s not “bad behaviour”. If we are members of anything at all like NATO, the WTO, the WHO, the UN then we should be free, as a democratic country, to decide to either remain, or leave, as we see fit.

    Just as you or I can leave our partners if we choose, or they can leave us. It’s not necessarily the leaver that’s bad and the remainer who’s good. It’s probably better not to go there at all by trying to apportion blame!

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