Be prepared for a UK political crisis followed by an economic crisis

Don't be fooled by all the hype surrounding the resignation of "the Brexit secretary" and his two junior ministers. It is not a crisis for the government yet but it could quite easily develop into one.

The foreign exchange markets and the FTSE 100 index have reacted positively to the resignations according to the "Independent". Business is encouraged by arch Bexiters removing themselves from government and influence. I would not be too sure,though, the government could be weakened further by more resignations and political squabbling.

It is quite possible that divisions in the ruling party could lead to really unstable government. The money and foreign exchange markets will then react strongly but in the opposite direction.


It is clear that leaving the EU without a good deal will lead to unfavourable short , medium and long term consequences. The government is aware of this. If Brexit goes wrong, 16 million plus remain voters will say I told you so. The danger is that  a substantial proportion 17 million leave voters will feel that they have been cheated. The 13 million voters who did not vote, choosing to let Parliament decide the nation's future, might feel even more disenchanted. Public disquiet will lead to further political crisis, and the political crisis will exacerbate the immediate economic problems resulting from a precipitate exit from the EU. If we are not careful we are heading for a severe economic backlash, which will leave the UK in a weaker and weaker position.

The government and parliament must act in the economic interest of the country; the electorate in general does not support such substantial economic and political change, especially if that change leads to bad economic consequences. The EU referendum was only advisory and there was not a super majority for change. Parliament must defend the livelihood of everyone: it is sovereign. The Brexiters are playing with fire; it is time to stop them in their tracks.

The best move would be for Parliament to assert its sovereignty and vote for Britain to remain in the Customs Union.  The Brexiters will then be completely defeated and common sense will have to prevail. Brexiters have delivered no plan for Britian's role in the world after leaving the EU. If we leave without a deal we will have to re-negotiate a new trading relationship with the EU, and with the 60 countries that we have free trade agreements with as part of the customs union. We will end up with no trade agreements at all. The UK would then be at the mercy of the EU, China, USA, India and Japan as we scramble to find trade partners. The idea that we can trade in a tariff and quota free world dominated by the UK is fanciful ; this is not going to happen for the UK or anyone else. At the moment the world trading culture is moving towards protectionism. Britain will be the loser. If the UK leaves the EU without a deal we can expect our economy to be hit hard. The consequences are alarming. The only people not to suffer from a hard Brexit will be the rich metropolitan elite who lead the UK into this dilemma.

The UK will have to remain in the single market to solve the Irish problem which no-one wanted to talk about before the referendum. Britain must face this reality, once again we have no choice.

We can leave the EU but we cannot easily leave the single market and customs union without there being severe political and economic dangers.  Common sense must prevail before the crisis is truly upon us.

https://www.independent.co.uk/news/business/news/david-davis-resignation-latest-brexit-uk-market-reaction-pound-sterling-exchange-rate-ftse-100-a8438141.html

It is worth reading the following article in full if you were not around in 1976.

https://www.gresham.ac.uk/lectures-and-events/the-imf-crisis-1976