Clearly the full impact of the Brexit result has yet to play out. In that
context it was interesting to attend a seminar held by the Centre for European
Reform which discussed the economic and political ramifications. Regular
readers will know that I am contemptuous of the claims made by the Leavers on
the economics of Brexit. But we have to accept that the howl of rage expressed
by the electorate is based on a genuine grievance. Indeed, as Douglas Carswell,
UKIP's only sitting MP, pointed out we cannot continue to dismiss UKIP as a
party which desires only to turn back the clock. As he put it, UKIP is not a
party which is stuck in the past. It continues to make progress - after all, it
continues to increase the number of votes it wins at elections. Former LibDem
leader Nick Clegg noted that it is hardly surprising people are angry when
almost 4 million voters put their cross in UKIP's box at the polling booth and
were rewarded with only one MP. They got the third largest number of votes in
2015 yet nine other parties got more seats. As Clegg said, if this
was not a call for electoral reform, it is hard to know what is.
As businesses seek more clarity over the nature of the UK's future relationship
with the EU, politicians and policy wonks continue to try and puzzle over the
wider ramifications. The view from Europe is that it is a great pity that the
UK has gone down the path it has chosen for itself, and that this does great
harm to the image of both the the UK and the EU. For the former, despite what
UKIP politicians say, there is a view that the UK is stuck in a time warp,
harking back to better times when Britain was stronger. But as I have warned
before, the damage to the EU's image has taken a hit - if it's so great, why is
a big power such as the UK leaving?
Two things immediately struck me today, however. One is that when Brexit
supporters are challenged on their view that it may not be alright on the
night, they resort to the excuse that this is a residual hangover from Project
Fear and that we have to get over this. To this I simply respond that financial
markets are not taking you on trust. International investors have genuine
concerns about the lack of detail which is forthcoming.
The second thing which I learned, whilst presenting at an event with a lawyer
today, is that businesses are genuinely unsure about the legal standing of many
of the contractual arrangements which they currently have or may be about to
enter into. And lawyers are only able to give partial answers, with much of the
interpretation depending on politics. This uncertainty is a bad sign for
business activity going forward and I fear that activity could come to a flying
stop in July and August. The Bank of England has warned that some of
the Brexit risks are already "beginning to crystallise." Are you listening Mr Gove?
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