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Lack of clear plan for Brexit has negative impact on British economy and social moods

23:32 | 08.08.2016 | Analytic


8 August 2016. PenzaNews. The UK’s decision to exit the European Union taken with only a small majority in a referendum on 23 June continues to cause divisions within the United Kingdom.

Lack of clear plan for Brexit has negative impact on British economy and social moods

Photo: Garon S, Flickr.com

According to the observers, numerous demonstrations and protests organized by the supporters of European integration throughout the country highlight the split of the nation based on age, social and geographic grounds.

In particular, the Scottish National Party – the third largest party at Westminster – expressed the intention to block a UK Government plan for Brexit.

“Theresa May can serve Article 50 without going to the House of Commons but she needs to get the Brexit plan for what happens next through the House of Commons and there isn’t a majority for Brexit in the House of Commons, which she knows full well. So our votes, our 56 votes in the House of Commons are going to be quite critical to her getting something through,” SNP deputy leader candidate Tommy Sheppard said.

Commenting on the social moods in the United Kingdom, European politics expert Simon Usherwood, University of Surrey, said that the British are particularly concerned about the unknown future.

“As much as people still care, there is unhappiness about the lack of progress and the lack of a clear plan. However, protests are unlikely to help change this,” he said.

According to him, the situation may become more clear in 2017.

“Probably only in early 2017 will we have of Article 50, by which time we should also have some idea of what each side is looking to achieve,” Simon Usherwood added.

However, to date, the UK’s decision to exit the European Union significantly complicated the situation in the country.

“Economically, the main impact is uncertainty, which is delaying investment decisions. Politically, it has opened up the internal problems of the Labor party, which will be very complicated to resolve,” the expert explained.

In turn, Simon Lightfoot, researcher of European Politics at the University of Leeds, suggested that the new government will need time to work out its demands, what it is willing to compromise on and what its red lines are.

“The key issues are access to single market and free movement. The government has to try and get as much access to the single market whilst accepting a political acceptable level of free movement. The current round of visits by Theresa May suggest that she is taking soundings from the key players in EU capitals,” he told PenzaNews.

He also pointed to the fact that British society and political circles are divided in a variety of ways.

“Voting to leave one union might prompt the breakup of another union – the UK. The SNP calls are for a new referendum on Scottish independence. The issue of Northern Ireland is also unclear,” Simon Lightfoot said.

However, in his opinion, Brexit will not have a serious impact on other EU countries, despite the fact that there are Eurosceptics in many EU states, including France, the Netherlands, Denmark, Finland and Hungary.

“My sense is that the European project will continue. It might be that we see increasing cooperation amongst a core group of states especially the Eurozone states. […] I think the key difference [regarding the issue of leaving the EU] is whether another state could work outside the EU given the connected borders. As an island, non-Schengen state it is slightly easier for the UK,” he said and added that anti-EU message in other European countries is more in a sense of reform not reject.

According to him, the political turmoil within the EU clearly means that all diplomatic and political efforts will be focused on Brexit for the next few months.

“When the process starts, some of the uncertainty will stop. How it effects the EU longer term is hard to say but clearly when the UK leaves the EU it will have an impact. […]The EU has to be careful not to blame the British and the Exit camp has to be careful not to sound too triumphant and remember 16 million voted to remain,” the expert added.

Meanwhile, Neil MacKinnon, Global Macro Strategist at VTB Capital, stressed that he is pro-Brexit.

“It is good for the UK in my opinion. I think the EU is an economic disaster with its one-size-fits-all economic policy; voters in France, Italy and Spain don't like the EU and I think the EU starts to unravel,” the analyst explained.

He also pointed to some difficulties connected with the UK’s decision to leave the EU, stressing, however, their temporary nature.

“UK business and consumer confidence has declined but this is likely to be temporary. The fact is that the UK economy is in better shape than the Eurozone where growth is slower and the unemployment rate higher. Already many companies are planning to increase investment especially from overseas given the 10% depreciation in sterling which makes UK assets cheaper to buy. My view is that Brexit is good for the UK though the process of disentanglement will take time,” Neil MacKinnon said.

According to Bill Durodie, Head of Department and Chair of International Relations, Department of Politics, Languages and International Studies, the University of Bath, today, across the UK, it is as if the vote to leave the European Union had never happened.

“Despite the new Prime Minister, Theresa May, asserting that ‘Brexit means Brexit,’ all of her actions, as well as those of the people around her and even, increasingly, European players too, such as Angela Merkel and others, points to a desire to kick the Brexit ball into the long grass where it cannot be seen and they hope, may never be recovered,” the expert said.

Theresa May has indicated that the earliest she would trigger negotiations for the withdrawal would be next year at the earliest, he reminded.

“So what happened to the assertion of former Prime Minister, David Cameron, that he would enact the people's will with immediate effect? We should recall that this vote was the single biggest mandate in British electoral history and yet it remains unfulfilled. […] Instead, various groups, including middle-class hippies dancing in dresses made of the European Union flag, members of the unelected second chamber in the British Parliament, as well as a law firm and even one of the candidates standing to become the new Leader of the Opposition either assert that the public were duped when they voted, or that they were too ignorant to vote, or that such a momentous decision ought not have been left to them in the first place,” Bill Durodie said.

In his opinion, the lack of practical steps for Brexit has a negative impact on the situation in the state.

“What does this all mean for the future? Well, if we are not very careful what it points to is how democracy is now upheld in principle but not in practice in one of the birth places of democracy. It reveals in sharp contrast the elite's disdain for the people that they govern and it can only lead, much further afield, to more significant social challenges as people will eventually have to assert themselves more forcefully for their voices to be heard. How much better it would be to hear them now, now that they have spoken, and to start taking them seriously as agents of their own destiny,” the analyst said.

According to Kent Matthews from Cardiff University, Wales, the referendum result was as much a surprise to those who campaigned for a Leave as for those who expected a Remain.

“The initial perception is that the EU will be weakened by the exit of the British. But the reality however, is that the EU was never a united front. It was rare for the EU to speak with one voice, in particular, on foreign policy, and despite the attempt of a Franco-German leadership, it was hard to get agreement across so many countries” the expert said.

From his point of view, the strength of the EU was its role in world trade.

“It remains an important market in the world but it is a declining one. The focus of world trade has moved east and being tied to a trading bloc that is declining in its share of world trade is not a good place to be,” Kent Matthews stressed.

In his opinion, the UK got the opportunity to be truly international by being open to the rest of the world.

“Freed from the shackles of EU regulations and laws, which place significant burdens on small businesses, it is free to trade with the rest of the world on WTO rules at world prices. This will mean that the UK will be able to import cheaper raw materials and food from Africa and South America and cheaper manufacturing goods from China and India. In return, it will be free to sell its services which constitute nearly 80% of its economy to the rest of the economy,” the analyst said.

According to him, the United Kingdom will only receive benefits from Brexit.

“The scare tactics of the Remain with their ‘project fear’ has had an effect but in time the world and the British people will realize that as Franklin Roosevelt once said, ‘there is nothing to fear but fear itself.’ Of course there will be pain in the short-term, but this is short term pain for long term gain,” the expert concluded.

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