6 MYTHS ABOUT BREXIT
As an Irish company with a British subsidiary, more UK employees than Irish counterparts and which does more business in the UK than on Irish shores, Crowley Carbon has been watching the Brexit campaign closely – and feeling the pinch. With opinion polls seemingly neck and neck between the 2 camps we’d like to weigh in on the myths about Brexit with 24 hours to go…
Brexit will solve Britain’s migrant ‘problem’: This misconception is one of the driving forces of the campaign so far and one that doesn’t seem to want to listen to reason. Nigel Farage and UKIP, champion the argument for a stronger Britain without migrants but recent figures show EU migration to Britain (183,000) is eclipsed by non-EU migration (196,000), while illegal migration, as well as non EU applications continue to rise. In reality Brexit will weaken the backbone of the British work force by hampering the ability of educated, hardworking peoples settling in the country. This would create further problems of worker shortages in key areas like the health service, IT and industry, which rely on many foreign workers to keep it up and running.
The EU has damaged Britain’s growth: Many people believe that it is Europe, and the £6.5 billion fee that Britain pay in order to be part of the club that has stifled the British economy to date. In fact, since joining the EU Britain’s relative economic performance has improved. UK GDP per capita has grown faster than France, Germany and Italy since 1973.This argument takes the onus off domestic policy measures which have created a growing inequality. In reality 45% of British exports in 2015 went to the EU and 48% of foreign direct investment into Britain comes from the EU, if even half of this is disrupted the economy will suffer.
Currency devaluation will be manageable: The assault from markets on sterling has already begun to bite Irish and European exporters. If you’re an exporter the value of your pound has already slipped by 10 – 15% in the first half of this year and this figure is set to get much worse. The volatility has automatically resulted in a push back from companies to operate in Britain. Companies will have to position themselves strategically so they can anticipate their cash flow in the following months and can cope with the impact of currency shortage. This could mean reduced expenditure and a decline in output.
Trade agreements with Europe will remain intact: The truth is, although it won’t happen immediately, trade with European counterparts will stall as new customs and excise duties are introduced. In case of Brexit it is forecast that the nitty gritty of how regulators and policy makers treat British exports and how trade is pieced together will be decided in the next 2 years so market volatility and reduced trade will be like the unbearable party guests who refuse to leave. By locking certain industries out of their current market territories, regulatory changes could irrevocably threaten their viability says John Mc Grane Director General of British Irish Chamber of commerce
Changes will happen over night: The 2 year period of negotiation that will ensue post Brexit will mean a lot of uncertainty and political wrangling. In fact no major policy or trade measure will be taken for up to 2 years after the referendum has passed. This period of uncertainty will be bad for business, stall foreign investment and ultimately negatively affect UK GDP and government debt.
It will reinvigorate the ‘Golden Age of Empire’: The idea that Scotland and Wales won’t kick up is far fetched. ‘Exit’, or England’s exit as some critics have coined it, is the result of Britain leaving the EU and then Scotland, Wales and Northern Ireland potentially leaving the UK. Nicola Sturgeon and the SNP among others have expressed their wish for another referendum if the vote to leave is passed. This will leave “Great Britain” very exposed. Even if Scotland, Wales and N.I do decide to stay – the political, financial and indeed social upheavel could signal doomsday.