Will Brexit mean a poorer Britain?
I can remember the proud face of my parents when I was leaving them to study at a university in Britain, one of the richest countries on earth. However, as a Briton, more I am learning about the true effects of the UK's exit from the EU that--Britain will be poorer with any plausible forms of Brexit, soft or hard, and have a profound bearing on its prosperity, security, and standing in the world stage--worrying me greater.
Many believe, the United Kingdom's (UK) decisions to leave the European Union (EU), on 31st October 2019, its biggest trading partners and vital ally, will significantly diminish the greatness of Great Britain.
Brexit has not only consumed everyday media coverage for the past three years, but it has also divided Britons into a warring ideological tribes of pro and anti Brexit and forced two prime minister to resign. Yet nobody knows what is coming next in British politics when a new Brexit leader, most likely Boris Johnson, replaces Theresa May on 22 July 2019. BBC's most popular Andrew Marr Show, on last Sunday, though highlighted the possibility of another General Election in November.
The nature of political polarization and unprecedented disparity among citizens has exposed that Karl Marx's 'Class' issue still matters in capitalist Britain. For example, in 2016 Brexit referendum, wealthy London voted to remain in the EU but comparatively poorer Birmingham voted to leave. This may have boosted John McDonnell's (shadow Labour Chancellor and popularly known as Marx brother) confidence to say proudly "I would be the first socialist chancellor in modern British history."
Take another example to understand how individual circumstances determine a national issue. I visited a Sonali Bank's London branch, recently. During conversation with a bank employee I discovered his deep disappointment in Theresa May's government for not being able to deliver the Brexit verdict yet. When asked why, he replied, those Bangladeshis originally settled in countries like Italy or Spain are now pouring in the UK. Therefore, house-rent in East London, where he lives, is suddenly skyrocketing, which is affecting his living.
Brexit supporters believe on leaving the EU, the UK will regain control of her borders. As the UK will no longer have to contribute to the EU budget, this will save the taxpayer £3,500 per adult, which will significantly improve living standards of lower-income households. Currently, EU unskilled immigrant--one million of them--cost the average household £2.50 a week.
A research conducted by Cardiff University reveals that the burden of supporting unskilled EU immigrants falls disproportionately on the poorer communities where they usually settle. Because the wages of local workers are driven down by these settlers as they work for heavily subsidised wages.
However, remainers strongly contradict this view. Molly Scott Cato (a Member of the European Parliament from UK Green Party) put it this way: "It is one of the sad ironies of the referendum that those who are likely to suffer most from the decision to leave the EU will be those who voted for Brexit." Various recent studies also concludes that regions of the UK that voted strongly in favour of leaving the EU are the regions of high poverty and deprivation which also have the greatest levels of dependency on European markets and on funding for regeneration.
An 82 page Government Report points out that 'how much poorer Britons would be depends on which Brexit route the UK will take': a Norway or Canada type European Economic Area (EEA) model; a free trade agreement; or World Trade Organisation (WTO) rules. The economy could be up to 3.9 per cent smaller after 15 years under Theresa May's Brexit deal, which equates to around £60 billion. But a no-deal scenario could deliver a 9.3 per cent hit costing nearly £200 billion.
Stark warnings are also coming from the Bank of England. A no-deal Brexit would cause the worst economic slump leading to the deepest recession since the Second World War. The economy will shrink by 8 per cent in a year, house prices could fall by 30 per cent, the pound could crash below the dollar, inflation could accelerate and interest rates soar--if Brexit turns chaotic, the Bank goes on.
Similarly, two distinguished think-tanks: the National Institute of Economic and Social Research (NIESR) and the UK in a Changing Europe, find leaving EU with a deal will reduce GDP per person by 3% and 1.9%, respectively. A cut of 3% translates into an average annual loss at 2016 prices of £1,090 each. Furthermore, friction with Britain's biggest trading partner, the EU, could mean a drop in trade of as much as 40% and a no deal scenario will dry up essentials including food and medicine.
Brexiteers claim that in a global-Britain the UK can benefits hugely by establishing new trade links across the world. Without giving any details they love to talk nostalgic imperialistic Britishness. Analysing this possibility a government's study finds that free-trade deals with America, Australia and the BRICS countries would add just about 0.2% to GDP per head.
Nonetheless, Brexit supporters say these fears are part of 'Project Hysteria'. One among cheerleaders, the Conservative Party MP and chair of the European Research Group Jacob Rees-Mogg, talking with The Guardian, questions the validity of the above forecasts. And Boris Johnson, a Leave campaigner and prime minister in waiting, insists there are no downsides from Brexit.
Disagreeing with their views, the former Lib Dem leader Tim Farron, blames the Tory government for creating this mess, and says "These are the government's own figures and in every respect they depict a weaker and poorer Britain."
Amid this scenario, to stop no-deal-Brexit, a powerful group inside Jeremy Corbyn's Labour Party's shadow cabinet is urging Labour to be ready to campaign for a possible General election or a second Brexit Referendum. If I were able to share the above episodes with my parents, they might have thoughts: something is horribly going wrong in Boris' Britain.
The writer is a London based Freelance Columnist on current affairs and development issues.