It’s not just the markets that need calming

Nigel Farage’s outburst in Brussels today was embarrassing. There isn’t widespread hatred of the EU here in Britain or a dislike of foreigners and I wish the media would stop using these things to grab headlines. I also wish the jeering and anger would stop and rational talks begin.

 I sincerely hope we don’t disintegrate as a nation. David Cameron probably left it too late to ask for a new deal and the EU politicians quite likely don’t understand what it’s been like here in the UK.   I didn’t hear from anyone about income inequality in this country, yet it had been a hot topic after the economic crisis. The newspapers had articles about people flooding to food banks not so long ago. Perhaps they were embarrassed to talk about it because other European countries are still feeling the effects of the crisis themselves.

We have been living in different times since 2008 and some countries have had to face harsh realities from the consequences of bullish behaviour, but we were probably a bit smug about that.   The UK has recovered better because it wasn’t part of the Euro and with problems elsewhere the UK looked like a safe haven. However, there are still some people and areas that haven’t recovered so well here either and it isn’t difficult to see how the divide started and why it came to a head.

It’s actually expensive to move to Australia, the US or Canada and probably other parts of Europe too. If there isn’t work at the other end what’s the point in going unless you’re retired? But if you haven’t got prospects where you are then there’s nothing to lose by moving. The UK is a small country by comparison to Germany, France and Spain, yet it punches well above its size. We just didn’t keep up with demand.

The UK imports just about everything it can. It hasn’t kept up with a growing population by providing housing and other services, which had seen under-investment well before the crisis.   Top that up with a large heap of austerity and you can see why people felt aggrieved. We were jogging along alright though and I’m sure that if we hadn’t had to make a decision we would have accepted the status-quo. In some ways it was a backlash against the elites and the wealthy. Back to income inequality again and one wonders if this will improve significantly in the next decade.

It seems many young people have expressed resentment at the outcome, but how many had the prospect of working and living in the EU?  Not that many, let’s be honest.  Perhaps they feel the door of opportunity is shut, but it is not.  If you’re good enough you can do anything, isn’t that what we tell them these days?

Leaving the EU doesn’t have to be negative. I doubt we’ll get a free trade deal because many will reject the free movement of people that goes with it. However, with a de-valued GBP and a tariff our goods may work out neutral. Whether we impose one on imports will certainly make things more expensive, but that’s a matter for government to decide.

The financial markets fluctuate with business sentiment so if businesses can remain positive and go-getting the UK should be OK. Despite the exaggerated claims on both sides of the debate the voting pendulum fell fairly central, so the economy should too.


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