Brexit: the word that divided a country. Britain’s departure from the European Union has always felt like a distant possibility but, following her announcement at the Conservative Conference, Theresa May has ensured that it is now a not-too-distant reality. May announced that she will trigger Article 50, the start of two years of negotiations with the Union, in March. If the pound immediately dropping to a three year low is anything to go on, then Britain could be in for an uncertain few months, followed by a catastrophic two years. So what can we expect?
As has happened with every Brexit-related announcement, the pound will continue to fall in value. The value of sterling often feels very unimportant to the everyday person, as we haven’t encountered any increase in prices since the pound fell in June. But the reality is that a les valuable currency will make imported goods more expensive as the exporter’s currency will be worth more relative to the pound. This increase in the price of imports likely hasn’t translated into a more expensive weekly shop quite yet, but it is coming. Savings will also be affected as the value of the pound drops, meaning that in reality, everyone will be worse off financially.
The EU will be judge, jury, and executioner as Britain begs for its life.
Investment will also certainly slow as Britain will become a less attractive opportunity. With an uncertain future ahead of it, the UK will fail to garner any substantial investment from foreign countries and multinational countries when these parties can just as easily, and much more safely, invest in countries either already in the EU, or other countries such as America and Australia. Any investments the UK has secured will undoubtedly be reduced or cease as soon as the option becomes available to the investor. It is unavoidable that, at least for the two years of negotiations, Britain will be too great a risk with too little a reward.
The resulting shrinking of the British economy will necessitate some form of financial supplementation on the part of the government, or the Bank of England, similar to the actions Mark Carney, the Governor of the Bank of England, has already taken to lessen the blow. These supplements will come at a cost of hundreds of billions of pounds (in fact, they already have exceeded this) and the government will no doubt seek to make up for this expenditure in other areas. So where will these cuts occur? Health, education, housing – just about everything you would expect a Conservative government to cut. Expect further privatisation of the NHS and education, as well as a slowing in the already inadequate rate of council house building.
It may seem that the future is all doom and gloom but, in reality, it doesn’t have to be that way. One thing could save Britain from the economically hardest years since the 1930s: the European Union. The EU will be judge, jury, and executioner as Britain begs for its life. May’s negotiations for new trade deals will not be given a particularly warm reception. The EU does not want its members following Britain’s example (if any of the other members fancy being as self-destructive as Britain) and so any ‘deal’ Britain receives will likely be crippling. The idea we could access the single market without freedom of movement has just about been dismissed by anyone with any logical thinking by now, but that is not the worst-case scenario. Britain has no bargaining chips left. If Britain threatens to impose tariffs on their exports to the EU, any country in the EU can just as easily turn to the Union for an alternative, cheaper source of goods.
Over the next two years, we will know very little of what our lives will be like after that period.
As for the absolute best-case scenario, Britain will find itself in the exact same situation it is in now, except with no political presence in the EU. We will have to share open borders in order to access the single market, we will reduce immigration from the EU by exactly zero, and we will instead be at the whim of officials in Brussels who are in no way answerable to us. The picture that brexiteers painted of an EU with unelected officials with no financial benefit whatsoever will only be realised once we have left. Then it will no longer be scaremongering – it will be reality.
Over the next two years, we will know very little of what our lives will be like after that period. Any important deals will be done behind closed doors and the electorate will not be consulted on a single aspect, as we have given the government a mandate: to leave the European Union – and at any cost. We will be at the mercy of the merciless. Britain’s future is surely uncertain, but it certainly will not be good.