This was the first article I had published with The Bip online. You can read the follow-up article here: Brexit
As Britain woke to the results of the EU referendum, many have concerns over the effects of leaving the EU.
The polls were close, with 51.9% voting leave and 48.1% voting remain. Remain voters have made it clear that they feel the result is a disaster for the UK.
According to the figures, there are mixed feelings with the country being divided. Voters have taken to social media to voice their opinions. One Facebook user, 31 year old leave voter Jay Gundry, has said “The EU was a good model concept, but after time we’ve come to realise that we want to be the ones in control of our own country’s laws […] we don’t want to be paying stupid amounts of millions per week to be part of some European club…” He continued to state that “…a vast amount of voters who voted to leave have done so without prejudice being the fuel to do so […] what stands ahead of us is a chance for change, a chance to broaden our horizons…”
What this result means for the future of the UK is unclear. According to the Independent, Britain can expect to pay more for foreign holidays, and for inflation to rise. There is also concern that interest rates might rise and house prices will fall. As George Osbourne told the BBC, houses could be worth 18% less following a Brexit victory.
Leave voters have been accused of racism, yet there will, according to the Independent, be no immediate change to immigration. Free movement of EU workers and the status of EU nationals will not change, at least in the short term.
This morning, the spotlight has been on the Great British Pound, which has slumped after Britain’s vote to leave the EU.
From a business perspective, the situation is worrying. Monique Seth, CEO at Conigital, is concerned that funding, which would have been available from the EU, will no longer be accessible for businesses, and that exports will be hit hard and worries that there will be a lack of support. He states, however, that “if the pound remains low in the long term, this may be positive in the selling of goods worldwide.”
The value of the pound had already become volatile since the announcement of a referendum in February, when the pound fell 2.3% against the US dollar (source: Yahoo Finance). Today, reports from the Financial Times detail that the pound has fallen over 10%, to a 30 year low.
A fall in the value of the pound is not necessarily a bad thing for everyone, though. It could be good for the economy as it makes our exports cheaper and, according to thisismoney.co.uk, might even boost trade with the rest of the world. On the other hand, MSN Money warns that our imports would become more expensive and this would trigger higher inflation. Some economists, however, may welcome a small rise because it stimulates economic activity.
Brexit claimed that there would be more money available for the NHS, and that energy prices would become cheaper. However, Nigel Farage admitted that the promise of £350 million per week for the NHS was a ‘mistake’. (source: Mirror). Andrew Dilnot, chair of the UK Statistics Authority, had already claimed that this figure was “potentially misleading”. (source: Independent)
If the economy survives Brexit, then there is a possibility of extra funding from savings made by leaving the EU. However, there is unrest as Chief Executive of NHS England, Simon Stevens says, “It would be very dangerous if at precisely the moment the NHS is going to need extra funding actually the economy goes into a tailspin and that funding is not there.”
Others to be affected are the disabled, who former paralympian Baroness Tanni Grey-Thompson says will be prevented from benefiting from upcoming legislation on accessibility. The EU has been influential in disability rights but leaving does not necessarily mean that those rights will be lost.
Finally, a consideration for many leave voters has been in regards to sovereignty and law. The remain campaign has stated that “some sharing of sovereignty is crucial to enable fair trade across Europe”. However, leave campaigners cited that “the British government has repeatedly been defeated in cases against the ECJ, and that “other member states can force through decisions against the UK’s wishes.” (source: BBC)
In reality, the long term effects of leaving the EU are unknown. There are numerous factors and differentials to be taken into account. It can only be hoped that Britain continues to retain peaceful relations and trade with the rest of Europe, that laws made as a result of EU membership are kept where this is in the best interests of the population, and that any negative effects on the economy are short term.
There are concerns regarding businesses, the NHS, disability rights and accessibility rules as well as a whole host of other possible issues. Britain will certainly have a storm to ride, but only time will tell if this is the right decision.