Observations of an Expat: The Brexit elephant

 

There was a massive elephant in the British House of Commons on Wednesday. It was rampaging back and forth across the chamber, overturning tables, loudly trumpeting and waving his trunk from side to side.

Its name was Brexit.

Chancellor of the Exchequer Phillip Hammond did his level best to ignore the distinctly unfriendly pachyderm. In fact, he did not utter the B-word once during his 45-minute budget speech.  But the Brexit elephant was as plain to see as the chancellor’s traditional red box.

Growth forecasts for 2017, said the Chancellor, have been upgraded from 1.4 to 2 percent.  Employment forecasts are rosy, and predictions for government borrowing are down, down, down. The pound remains at rock bottom levels against the dollar, but the economy has not fallen off the cliff as some pro-European campaigners said it would do on the 24th of June.

But then Britain is still in the phoney war period. Article 50 has not been invoked. Details of the government’s negotiating position remain shrouded in mystery. Details of the European Commission negotiating position are a total enigma.

The markets, the banks and the investors on whom the British public rely for the pay checks that keep them in food, clothing and shelter are still playing the wait and see game. They would rather avoid the expense and bother of uprooting  themselves from comfortable London bases.

So they are waiting. They are waiting for the end of March when Mrs May is due to invoke Article 50 of the Lisbon Treaty and start the negotiation ball rolling.  They are waiting to see just how hard the hard ball is that is thrown out by the commission negotiators and Chancellor Merkel.  They are waiting to see just what bribes and enticements Mrs May will offer foreign businesses to remain in Britain and foreign governments to sign quick trade deals.

Phillip Hammond is waiting too. And the former remain campaigner is saving his pennies because he believes that the picture of post-Brexit Britain will be considerably less rosy than that painted by his Brexiteering cabinet colleagues.

For that reason he is being raked over the coals for breaking an “ironclad” election promise not to raise taxes or national insurance. Instead he has substantially increased contributions from the growing army of the self-employed who have no job security, no maternity benefits, no employer pension contributions and no paid holidays.

Social services, the National Health Service and education are all under severe strain after seven years of austerity budgets. They received some more money in the Wednesday budget. But it was the bare minimum, and many would argue that it wasn’t even that.

The problem, as the chancellor pointed out,  is that Britain has a $2 trillion debt—that is almost $70,000 for every for every household in the country.  And with the uncertainty created by the Brexit elephant, “this is not the time,” as the chancellor said, for commitments to “more unfunded spending in the future.”

Phillip Hammond’s budget is not the only thing affected by the uncertainty of the Brexit elephant. The European Union touched almost every aspect of British lives—which, to be honest, was one of the main objections to it. But because of this, eight months after the referendum, the Brexit elephant  and the debate over what comes next continues to cast a huge shadow over the entire country.

Because they are British they bottle it up, stiffen their upper lips and go about their daily business as if nothing happened on the 23rd of June.  But they know that the the uncertainty of the Brexit elephant is walking in lock step right next to them.

To use another animal metaphor, Britain is a swan. To the casual onlooker it is gliding effortlessly along the placid surface while underneath it is paddling furiously to prevent itself from plunging over the Brexit waterfall.

* Tom Arms is foreign editor of Liberal Democrat Voice and the author of “The Encyclopedia of the Cold War” and the recently published “America Made in Britain” that has sold out in the US after six weeks but is still available in the UK.

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3 Comments

  • Michael Cole 10th Mar '17 - 1:46pm

    This is a perceptive article by Tom Arms.

    To use another metaphor : “The proverbial will hit the fan.”

  • Richard Underhill 10th Mar '17 - 5:52pm

    We should not assume that the pound sterling will not fall further, for instance at the moment that “Maggie” May actually triggers Article 50.
    We have seen a long term decline from $2.80 per £1, through “the pound in your pocket” (Wilson) “floating from strength” (Heath) to the present. The USA wants a trade deal directly with Germany, putting America First, and ignoring the EU. The UK may find itself at the back of the queue, as it comes to realise the variability of the policies of the USA, state by state.

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