So now we have it ; the first budget statement after the vote to leave the EU. It does not make good reading. Public debt is going to rise to at least 90% of our GDP or nearly 2 trillion GBP. this is 2, 000,000,000,000 pounds. It is a sum of money which is unimaginable. Leaving the EU is going to be costly.
The Office of Budget Responsibility (OBR) has forecast economic growth for next year of 1.4 % rising to 1.7% to following year and then rising again to 2.1% pa after we have left the EU. This is hardly Eldorado. The OBR has not made any prediction that the economy will improve beyond where we are now after we leave. If the OBR is to be believed we are indulging in a very costly exercise for nothing.
The Chancellor must be congratulated for finally recognising that Britain has a problem with its productivity and that we are falling behind our international competitors. He has made a start to redress this issue. To improve our productivity, at a macro economic level, we must provide affordable housing for all workers especially those who want to move location. We need to provide affordable creche facilities for parents who work full time. We must provide full time well paid jobs not badly paid self-employment jobs. We need to get millions of Britons out of the badly paid "gig" economy and into well paid stable permanent employment. To get our economy moving we need employees who have better skills and motivation. We need a better education system. We also need healthy workers.
We need to implement these changes and we can do this if we have the political will. The EU cannot stop us making improvements to our economy and indeed no-one in the EU even wants to do this. To all intents and purposes we are masters of our own economic destiny even if we are in the EU.
Turning the economy around will take decades. If our economy is to grow in the meantime then we need to import more and more workers. These will be young people from the EU and elsewhere who are prepared to live in multiple occupancy flats and dwellings and move around from place to place easily because they have no family roots. After we leave the EU these workers will arrive in similar numbers to what they do now but this time they will arrive as agency workers. They will not pay income tax in Britain but in their home countries. We will have to pay foreign companies to bring in these workers thereby worsening our balance of payments position. In a low productivity economy to achieve growth we have to import foreign labour - it is an economic fact of life. If you voted leave then you have been duped in this matter.
Vote leave politicians have claimed that economic forecasting is often wrong. Yes, it is, but this means that their forecasts for Eldorado could equally be wrong. If Britain leaves the EU on bad terms our economy could take another bad turn for the worse, especially if we are forced to leave the Customs Union exactly two years after Article 50 is invoked. From that day tariffs will be placed on our exports, we could lose all the advantages of the single market, our finance industry could be damaged. The EU will impose customs documentation and there will be long queues at the ports. A hard border will have to be imposed between Northern Ireland and the Republic - and this is the last thing that we should be confronted with.
There will be further damage to our economy; the Chancellor will be further constrained and the budget to improve the productivity of the nation will be limited. The money to improve living standards for the most deprived people and regions will also be restrained. To grow the economy we may have to import more cheap labour.
Leaving the EU could depress most people's living standards, cut the budget available for the NHS and the improvements for the economy. You will have voted for a Brexit " pig in a poke". "The metropolitan elite" will survive all this.
Yes, "the metropolitan elite" has implored you to remain in the EU. But, look into to the background of the vote leave advocates too; most of them are also part of "the metropolitan elite". "The metropolitan elite" has a duty to make the policy fit the evidence not make the facts fit the ideology.
If leaving the EU goes badly wrong, then it is not just the economy that could sag: the peace in Ireland could be sacrificed too. Is it worth the risks just to achieve the illusion that immigration is under control? After two years, from March 2017, it might be too late to change your mind. The ideologues would have won , but harsh reality could mean that you are the loser.
A place where sceptics can exchange their views
Thursday, 24 November 2016
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