Blog 2023 Malcolm Blair-Robinson

No It means the opposite. Instead of this country having more control over its destiny it will have less. More to the point, politicians will have far less authority than they have now. Why?

Because the world’s largest single market, through which we enjoy advantageous trade with about 40 countries and which now has free trade deals with Japan, much of South America and Canada, will remain at its closest point less that twenty-five miles away. And everything it does, every rule it has and every decision it takes will impact upon the daily lives of all the people of the United Kingdom. But we will no longer have any political power to influence any of it.

Hammond has warned that business and the EU will work together to ensure their companies prosper and that employment can be maintained. GIG economy entrepreneurs will find their own ways through. Families will adapt. Many will take dual nationality. The country will carry on, although the Union may go, so it will be England perhaps on its own. It will, as Iran said the other day, be more or less powerless, an old tiger, its teeth gone. London will beat its chest and Westminster will gorge upon its freedoms, but for the decisions that matter the people will look to Brussels, Paris and of course, Berlin.

Oh, but we are the world’s fifth largest economy so people will take notice of us, they will have to, will be the cry of the crackpots in the ERG and their allies. For the record we are now number seven. And falling. A  country hell bent on self-harm, floating on a mystic wave of fantasy and delusion. Why should anybody take notice of that?

This blog has said many times that there can be no realistic attempt at a post Brexit recovery unless the pound is worth close to one dollar and marginally less than a Euro. I stand by that conclusion. But I also say that the current predictions of a rapid fall to dollar parity in the event of a Boris style crash Brexit, so beloved by him because we are British and big on optimism and don’t have to bother to go into details or finish sentences, would be a disaster. The reason both these irreconcilable statements are true is because the context of the second is different to the first. The Boris disorderly plunge brings business chaos, inflation, rises in living costs, loss of jobs, broken supply chains. Indeed everything that no sane person wants.

My case for dollar parity would be part of an organised programme of remodelling the economy, away from the asset inflation driver we have now, which makes the richer richer and the poor poorer, to one which favours new wealth creation and drives growth through earnings. The wealth  would build bottom up, which works in the long term, not top down, which does not.

If we are outside  the EU, any notion that the UK can prosper purely on services, importing up to 90% of all we consume, is just not going to happen. We will have to harvest or make an ever increasing volume of all we consume, importing only that which we cannot grow or cannot make. And we have to export the excess so that we become a country with a trading surplus.

To do that we have to create new money  in tranches to be pumped into the base of the economy by the government, to fire up massive industrial and infrastructure investment, including all the cutting edge technologies,  climate friendly energy generation, communication and land travel. We need 5G in every nook and cranny of our islands, the fastest and best rail network worldwide, and cheap energy at the touch of a button. We have to clean up the air and and restore proper funding of all public services at every level. Taxation reform is a must with a system which ignores the notion of profit and instead focuses on turnover or revenue generated in the UK, by corporations and business, regardless of the origin, ownership, or nationality of the owners or entities involved. Tax must be on the movement of money not the emergence of profit. And it must be unavoidable.

We all know what random printing of money can do if it is used to build palaces for the ruling elite. But we also know that it was Quantitative Easing which saved both the US and UK in the 2008 crash, plus the Euro when many predicted it would fail. This time it would have to be Dynamic Quantitative Easing, which is new money printed, not by the Bank of England, but by the Treasury, to fund the economic reconstruction programme.  To maintain  balance and discipline with this flow of new money into the base to create new wealth and become the natural driver of inflation, the initial tranche must be exactly matched to the £435 billion already put into the financial sector by the Bank of England.

The Bank would then begin a programme of selling back into the market its accumulated stock of government debt. This would bear down on assets, while the DQE would boost earnings. The smart investment  managers would move away from asset inflation and into wealth creation. Markets would become earnings driven and leverage averse. The days of arm chair millionaires and food banks would be over.

Up to 1x GDP of DQE might be needed (£2.2trillion) to fire the country up  so that most future investment is funded by earnings rather than borrowing. That is the only  secure legacy to leave future generations. It is the only means of legitimizing Brexit. The problem is that I am unaware of a single Brexiteer who would have the slightest idea what  this is about.

No, they dismiss it all. Their only cry is that on November Ist, Britain Will Be Free. Free of what? The thing this nation really needs and the current majority in the country really wants, is to be free of them and their crackpot notions which threaten jobs, services and living standards, the break-up of the United Kingdom driven by English nationalism and a world lamenting the fact that a once great  power could end up so really, really stupid.

What the British ambassador said about the Trump administration not only comes as no surprise, but it is common currency among diplomats and politicians the world over. He also said Trump should not be written off. Wise words because  the definition of populism is in an unorthodox form of politics which breaks all rules and offers an approach which appeals to the people and horrifies the established political class, its supporting civil service and its vast legal tail. Trump is a populist. So is Farage. And very so is Boris. Moreover if polls are to be believed, Boris is on for a runaway win in the race to become prime minister, so we will expect a heavy shot of populism every time we catch up on  the news.

What is wrong is the fact that the intensely secret despatch from ambassador to government, one of the most closely guarded and secure communication channels of statecraft, was leaked to a newspaper. By whom? And with what purpose? At the very least it is a criminal breach of the Official Secrets Act. At worst it is treason. But such is the tawdry depth to which organised government has now sunk in our country, it was probably no more than idle mischief making by somebody pissed off.

It is three years since the Brexit project began; a simple in or out concept which would be, according to its promoters, the easiest negotiation in history, if out were the choice. It was. And here we are, three years on in political, constitutional and Brexit chaos. Positively nobody knows what is going to happen. Government has ground to a halt. Against all precedent, a governing party has taken time out to allow its membership outside parliament to choose the new prime minister, the third since 2016. This electorate is small, white, elderly and hell bent on a kind of Brexit backed by less than a third of the electorate in the country. This process is a democratic affront and a constitutional abuse.

The candidates competing, vie with each other for victory by making outlandish promises, combining an impossible menu of tax cuts and spending increases. They promise new negotiations with an EU which has made plain there can be no such thing. They offer solutions for Ireland which are already rejected. They hazard the Union by potentially forcing out of the EU on catastrophic terms two nations, Scotland and Northern Ireland, who voted to Remain. They claim a mandate for Brexit which was never given because it was obtained by lies. Nobody voted for the mess we are in. There would have been no majority for this historic act of self harm, if the fiasco which unfolded could have been predicted.

Even if we were insane enough to go for a crash Brexit, it would not be over. Reduced as we would be to the same trading terms as Mauritania and ungoverned spaces, we would face years of negotiations to set up new trading agreements, even to get ourselves back to square one. The simple truth, which polls confirm, is that the majority is now fed up with Brexit, it is a failed project, a phantom ambition, the cost far exceeds the benefits and the only thing in the true national interest is to recall Article 50, which will end this national trauma once and for all.