Brexit, The Conservatives, What a Circus

From Blustering Buffoon Boris to the seriously inept Esther, I can hardly see a candidate worthy of being called Prime Minister!

Few, if any, have any grasp of economics.

Let us look at a few things in the round.

We voted to leave the EU, thereby we voted to create a border between Northern Ireland and Ireland. Whether this is hard or soft makes no difference because as we diverge from EU trade regulations and standards so will there be an increasing need for the EU to employ more and more border checks to preserve their market. We might not, that is our perogative, but we can not deny them the right to protect the integrity of the market they have created. Like it or not that is the reality of Brexit.

Payments into the EU budget.

The EU budget is designed partially to redistribute some of the income from the wealthier members to the poorer ones. It is also designed in such a way that it should not have any detrimental effect on any country, as it is simply part of the ‘allowed’ money creation process of the EU, and while we have an opt out against many of these regulations the effect on us is no worse than other EU members.. If we did indeed run our economy on a fiscal surplus (taxation exceeds government expenditure) we might be inclined toward a view that it has a negative impact, but no number of promises from the Conservative Party have ever brought that into reality, perhaps the closest we ever came was during the chancellorship of Kenneth Clarke.

A quick look at the money flows between the UK and Europe including trade and EU budget contributions we will see that every year the EU in fact loans us the the money. Not only the budget contribution but for all the goods we purchase from them. Last time I looked the UK was in debt to the Euro-Zone in excess of 1 trillion Euros. (Once you consolidate all the Central Banks and Banking Sector assets and liabilities … here is a graphic provided by the BBC in 2012). Quite frankly I cannot see the reason for getting our knickers in a knot about the amount we pay … when they loan us the money to pay! Indeed they even loan us the money to pay for the food and goods we buy from them.

The thing that concerns me most, is that once we have left the EU will they still keep us on such favourable terms, or might they start demanding some repayment of our indebtedness instead of loaning us more money each year. Boris you might tell the EU they can go and ‘sing for their money’, but indeed what happens, when they ask you to ‘sing for your supper’. I am also certain that all those people you have promised a Brexit dividend to, will be rather unhappy to learn they have to loan the money back to the government!

The May deal, this is only to cover the transition period while we negotiate a long term deal, to say that the Irish backstop is a plot to trap us in the EU is silly, it is there to highlight that we will have free trade as long as we maintain regulatory alignment, once we diverge in order to do deals with the USA , our freedom to trade with the EU will start diminishing, and we will have to decide whether it is more beneficial across the Atlantic than the Channel. All trade deals come with penalties as well as benefits.

The promises of tax cuts and spending bonanzas are simply stupid. Tax no matter how much we hate it, is simply a way of distributing the cost of running the government among the people. While a good case can be made for overhauling the system it does not mean we are in a position to make cuts or increase expenditure without somehow counterbalancing.with other taxes and or expenditure reductions..

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