The Economic and Political Ramifications of Brexit: An Update on Recent Developments

BLOG 22: The Economic and Political Ramifications of Brexit: An Update on Recent Developments

Andrew Yiannakis, Ph.D.
Research Professor
University of New Mexico (USA)
(and a long time resident of England)

The vote to leave the European Union was a dark day for the UK and a giant step backwards into isolation, and economic and political uncertainty. What is even sadder is the fact that the motion to leave carried because unscrupulous politicians like Farage and Johnson were able to convince the British public that the issue was about freedom and independence from the EU, and the ability to control immigration. This could not be a more distorted picture of the relationship between the UK and its membership in the EU.

The UK has always been an independent country. While it may be true that it was never fully committed to the spirit of a United Europe, as evidenced by clinging to the pound and failing to support Europe’s currency, educated Britons recognized the wide array of benefits by remaining in the EU. But, even as a marginal EU member the UK was able to reap many benefits including: unrestricted travel, the right for Britons to work in other EU countries and, of course, the tremendous advantages of having access to one huge market. And the EU Universal Health Insurance card was a nice thing to have when traveling abroad.

In the academic/research sector, it appears that British scientists will be hit hard. British scientists receive approx 1.4 billion dollars a year from the EU for research. With Brexit all these benefits may well be lost.

If the exit vote is ratified by Parliament (despite Theresa May’s machinations behind the scenes), this is what I predict is most likely to happen:

1. British scientists will lose out on 1.4 billion dollars a year for research.
2. Some British scientists are already talking about moving to other EU countries; a move   that may well start a brain drain.
3. The country’ currency has plummeted to an all time low, which is already affecting interest rates and purchasing power for imported goods. Basically, the UK will have to pay more to obtain the same goods from abroad.
4. By pulling out of the EU the UK will lose its favorite trade status that is currently accorded to all EU member countries. This will increase significantly the cost of selling British goods abroad.
5. Foreign companies currently based in the UK such as Honda, among many others, will most likely relocate to EU countries so as to continue to receive favored trading conditions for selling their cars in the European market. This will most certainly cause massive unemployment, a situation that Britain can ill afford at this time.
6. Income and gasoline taxes will undoubtedly go up and, I fear, just as with Greece, pensions may also have to be cut. If the Treasury is left depleted new money will have to come from somewhere…
7. The combination of all these factors will undoubtedly put considerable strain on the British Treasury and may have dire consequences for the NHS, for unemployment benefits, pensions, the military and other publicly funded services such as schools and universities.  And the massive amounts of funding British scientists receive from the EU will have to be made up if British science is to retain its cutting edge. Where is the money going to come from?

On the subject of supporting the NHS, if the UK leaves the EU Boris Johnson promised the British public that the funds are available, and Brexit will not impact the quality of health services. Later on he admitted that this was not entirely accurate, in effect admitting that he misled the British public on this important issue. Now he has been made Foreign Secretary! The very politician who misled the country on several important issues, and helped divide and polarize the United Kingdom!

On the subject of the NHS we are now being told that the majority of foreign Doctors and Nurse who drive most of the essential NHS Services may have to leave the UK, if Brexit becomes a reality. And to add insult to injury the new Prime Minister had the gall to tell the British public that this huge setback (all the foreign Doctors and Nurses make up approximately 8,000 NHS employees) can be made up by permitting more British candidates to attend medical school and qualify to work in the NHS. Even if that were a realistic alternative, it would take up to seven years to train and qualify new medical personnel. What is the NHS to do in the meantime? Further, to open up more slots in British medical schools will require more resources and faculty, and it may also mean that standards will have to be lowered. Has anybody thought through the implications of pursuing such a short-sighted strategy?

The reality of the situation is that unless the UK can find the money elsewhere, it will be forced to take unpopular measures such as raising taxes and cutting pensions, among other cost-cutting measures. This is not scare-mongering; it is a reasonable scenario if Britain can’t raise the funds from other sources.

I say to the British public, “Is this what you bargained for when you voted to leave the EU?” Is the ability to “control immigration”, as your leaders promised you’d be able to do, worth all this devastation? If you Brexit you’ll end up alone and isolated, and if Scotland parts ways with England, as I’m sure it will, your situation will become even worse. Do you really want to become the “diminished little Britain” after Scotland pulls out, as Angus Robertson pointed out in a speech in the House of Commons?

It appears Theresa May’s conservative, and mostly hidden agenda, are leading the UK down a path that will have serious consequences for the average man. However, there is still hope if Parliament asserts its right to debate and vote on the issue of Brexit, because, a referendum is not a binding vote as if it were an election. Yes, the referendum gauged the will of the people at a time when reason was not at its optimal, and the result for Brexit was a mere four percentage points. Hardly a mandate for taking the UK out of the EU, especially now that we have a pretty good idea what the real consequences will be!

There is still time to correct this insane act and stop this conservative government from a very perilous act; an act that will damage the economy, raise taxes, degrade the NHS and increase the cost of living in an already over-taxed nation.