I recently reached out to my Uncle to find out his thoughts on Brexit. He's a retired entrepreneur living in a small village in the county of Derbyshire in England.
He designed and sold devices that monitor the ash content within coal. He has now sold his business and is living a retiree’s dream. Traveling the world, investing in UK securities, gardening.
I have always respected his opinions on economic matters and he’s generally a clued up guy when it comes to political debate, domestic and global. Below is an excerpt from an email he sent me when I asked what he thought of the scenario. I trust you’ll enjoy the read:
“The Brexit debate is a complex and fascinating one. There are good arguments on both sides although, I have to say, the level of national debate has been pretty poor. As you probably know I’ve always been a pro-European but recently with increasing reservation. However, this reservation does not extend to my becoming a Brexiter.
“It would take a very long email to provide you with the full details about the pros and cons but here are a few points:”
Remain: Pros
- “Access to largest free trade area in the world. This would cease on Brexit (although some say we could be like Norway and Switzerland and be part of the EFTA but then we would still pay into the EU without having a say in the rules). WTO tariffs would apply until numerous individual trade agreements had been established – that would take many years and consume a vast amount time and effort and therefore money. Meanwhile trade would be reduced owing to the imposition of tariffs, thereby weakening our economy.
- “London is one of the major financial capitals of the world. If Brexit happened it would slowly lose influence to Paris and Frankfurt, thereby severely damaging our economy. Britain’s economy relies heavily on financial services such as banking and insurance.
- “Outside the EU we would have less diplomatic clout in the world – The US currently sees us as a conduit to Europe – this would diminish upon Brexit.
- “Since the formation of NATO and the EU there have been no significant wars in Europe. We always do better by talking rather than pointing guns at each other. If we Brexit, in my opinion, this could herald the break-up of the EU over the next few years. Working together as a group of nations we should be able resolve our differences amicably and for example tackle cross border issues such as emission controls, pollution and the environment.
- “Inward investors from China, US and India would reduce their commitment to the UK as a gateway to Europe. Nissan, Toyota, TATA and many other large overseas companies have invested heavily in the UK because we are a gateway to Europe.
- “In my opinion we have the best of both worlds. We are in the EU but not in the Euro. In the long run the Euro can only work with political and fiscal union between the member states. Britain has an opt out on this. Actually, I’m pretty sceptical about the long-term prospects for the Euro. The differences in the economies of say Greece and Germany are so great that a single currency is not appropriate unless Germany accepts having to massively subsidise Greece. I don’t think the German public will stand for this long-term. Of course, Germany has massively benefitted from the Euro for her exports because the Euro is a much weaker currency than the old Deutsch Mark. By the same token the Euro is overvalued for the Greek economy thus wrecking their tourist trade.
- “We are not in the Schengen area so we do have border controls albeit we cannot restrict the free movement of EU citizens. Currently over half the migrants coming to Britain are not from the EU anyway! Leaving the EU would have no effect on this half and I suspect much of the EU migration as well!
- “We rely heavily on migrant workers. This is because our economy is growing. Our National Health Service would collapse if we did not ‘import’ foreign doctors and nurses.
- “Brexiters “Want our country back”. Well in an international world we have to pool sovereignty. When we sell things to overseas countries we have to comply with the regulations pertaining in the purchaser’s country. It is better to agree standards across a free trade area so that the same specification products can be sold in each country.”
Brexit: Pros
- “The EU commission is an unelected and unaccountable bureaucracy. No one can vote them out. It has become wasteful and largely self-serving. In my opinion this is Brexit’s strongest argument. “On 13 November 2014 President Junker axed the role of the Chief Scientific advisor because he (a non-scientist) did not agree with her. I’m not sure if this is related but there is a directive reducing the allowed power of vacuum cleaner motors thereby reducing their likely efficiency so a user has to have the motor running for longer to pick up the dirt. In the end no energy will be saved but cleaners will have to work longer hours! Apparently the same idea is being extended to electric kettles. This is even more mad. Every schoolboy knows that it takes a fixed amount of energy, 1 calorie, to heat 1 gram of water through 1 degree centigrade. So if you slow the rate of energy flow you slow the heating process so to boil a kettle will take longer but no energy will be saved. In fact, slightly more energy will be consumed because there will be more time for the effect of heat loss!
“The polls are showing a very close race. I desperately hope the “Remainers” win.
“I would like to see some reforms to the EU rather than its break up.
“How our political parties will stitch themselves together after this referendum will be fascinating. The Tories are so evenly and passionately divided by this issue it could herald the break-up of their party.
“I could go on but at least this has given you a few of the issues within this debate. I must now go off to vote.”
