A decision that may hurt the EU more.

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My prodigal brother Albert (aka Mincer) has been advising his followers on twitter to bet on “leave” – notably over the days leading up to the referendum when we all had concluded “remain” a racing certainty.

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He was right and the bookies were wrong, so I decided to take a little more notice of his tweets and was struck by this which appeared yesterday.

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Will Europe implode?

Whatever the dream of the European Union, it has never been dreamed over here. Apparently one of Google’s most searched items yesterday was “what is the EU?”.

I very much doubt , if you asked the man in Lens/Augsburg or Pisa what the EU meant to him, you’d get much consistency (or substance). There seems to be a gap between the articulation of the dream in Strasburg and Brussels and the perception of the EU by those not living it.

The question is whether Britain will ignite lated Europhobia, draw the remaining 27 countries together or simply leave to massed indifference.

Judging by the reaction of European people both inside and outside of “dreamland”, indifference looks the least likely option. Many Brits will be surprised by how important they appear to be to the folks accross the channel.

Rather like active fund management, the EU is talked up as indispensable till a Warren Buffet comes along and shows just how unlikely it is to create value from an abstract notion.

Warren Buffet

But like active management, the EU has always been very useful as something to cheer when things go right and jeer when things go wrong. Blaming Brussels is a past-time not just of the Brits and (like active management) Brussels is a luxury item which diverts many from the fundamental problems of their local economies.

I think there is a good chance that calls from within the major European players (especially France and Italy) , for freedom from the perceived millstones of the weaker nation states, will grow louder.

Plebiscites, as Cameron has found are easy to grant but not so easy to control. The threat of contagion is very real and the damage may already have been done.


Will anything actually change?

The other part of Mincer’s tweet that has exercised me , is the question of change in the UK. Cameron has made it clear he doesn’t want to press any buttons to leave while at the helm and that he won’t leave the boat till October. That means that the deadline for exit is October 2018 at the earliest, which is a long time away, for those who want immediate freedom.

Much will depend on the respect that Cameron is given and if the UK Brexiteers are as keen to say goodbye to Cameron as Brussels is to Britain, then the timeframe may be shorter, but any thought of a decree absolute before this time 2018 looks unlikely.

At a formal level we will not be free from the EU for some time, the question is whether much will change in the meantime.

There is real fear among many recent immigrants I know , that their jobs and even their residency permissions may be terminated immediately. This is not fantastical. For all the words from Tory Grandees, it is the barking of UKIP and their everyday campaigners who cause this fear.

I very much hope that we will not turn upon our immigrant population and make them unwelcome. I am sure, in my genteel world, this won’t happen, but I’m not the one who feels threatened by them, my biggest worry is that we will make life so unpleasant for them, that they leave- and take our reputation for tolerance with them.

In practice, firms like mine have benefited from the influx of European graduates willing to work hard and be patient and they have brought standards up among our home-grown graduate intake. I can only speak as I find, our business would be the poorer without ready access to brilliant European students.

I suspect at the professional end of the immigrant job market, nothing is likely to change, but I fear for the livelihoods and lifestyles of those without professional qualifications, who may lose what little protection they currently have.

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And what of the multi-nationals?

JP Morgan and Airbus were quick to issue pre-prepared press releases threatening job cuts as “changes to business strategy”. We have got used to this kind of behaviour and I don’t think that the nation will be any more scared of corporate reprisals as they appear to have been by the punishment budget threatened by our (current) Chancellor.

Since we are likely to be staying in till October 2018+, knee-jerk closures look unlikely. Most large employers will sit on their hands and watch, changing strategy is an expensive business.


And what of Government?

Here we will see most change (IMO) but only in terms of the faces. The Tory party conference in 2016 will look very different from 2015 and is likely to be considerably less cocky.

George Osborne and his various strategies look to be pretty well underwater. If he is to be re-floated, he will need a very considerate cabinet and a tolerant public.

The big Treasury projects waiting to be enacted – the LISA/PISA/WISA plan, the changes to pension taxation – even the Treasury/FCA FAMR proposals, are all now under threat till we see what kind of Treasury we get going forward. Osborne was a controlling Treasurer with a considerable tenure, if he leaves, I doubt that his successor will drive these projects with the same vigour.

 

And what happens in the Treasury, will happen elsewhere. I suspect that there will be major change to reflect the failure of Project Fear and the shambolic state of UK Government since this disastrous referendum took over.

It is hard to remember that Nigel Farage has no political office and that the party he represents has only one representative in parliament (none in the Lords). Whatever his PR antics, Farage has little practical way to influence policy.

In practice then, I see inertia in public policy over the next three months and a great deal of noise from politicians. All this at a time when Britain should be at the height of policy making (a year in to a new parliamentary term).


The power we never thought we had

I haven’t heard of read this, but I sense that we have rather over-estimated the impact of BREXIT on Britain and underestimated it on Europe. We may well have done more harm to the EU than we have to ourselves.

This is not me being revisionist , I am sad we did not stay. But I am not going to complain, I am going to make the most of what the new world offers me and find opportunities.

I will not be listening going forward to any filibustering from the fund industry (or the regulators) about “waiting for Europe”. I will reach out to our friends in the Commonwealth , the US and the Far East with greater confidence and I will not be ashamed to show my passport at European airports.

We have decided and I agree to live in this new world. I suggest that we use the power that some of us did not realise we had, to best effect.

 

 

 

About henry tapper

Founder of the Pension PlayPen, Director of First Actuarial, partner of Stella, father of Olly . I am the Pension Plowman
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3 Responses to A decision that may hurt the EU more.

  1. Phil Castle says:

    Very good. I don’t know how you manage to write such common sense at least once a day!

  2. Gerry Flynn says:

    Henry
    In the end this was not a referendum about the EU it was about immigration, the blatant xenophobic out pourings of the right wing press made it such. The UK will now have the most extreme right wing government in its history either led by a blond haired buffoon or a neo con.

  3. Jonathan Lawlor says:

    Positive article in Fortune highlighting it could be a win:win for UK:Europe – http://fortune.com/2016/06/24/brexit-uk-europe-eu-london-future/

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