Has Brexit Broken Britain?
By Max Darrington
Unfortunately, it’s the young voters who will suffer the brunt of the Brexit decision.
On the 23rd of June, 2016, the people of Great Britain woke up to a new Britain. A Britain which had chosen isolationism over collectivism at a score of 52% to 48%. A referendum which saw the older generations flock to polling stations but young voters stay in bed. Unfortunately, it’s the young voters who will suffer the brunt of this decision.
The European union brought many things; free movement of people, the precious single market and zero taxation on customs within the E.U. However, these benefits came at hefty membership fee, consisting of hundreds of millions of pounds a week for Great Britain.
The EU referendum was a long and brutal war of attrition, with debate after debate of politicians chanting their point of view, hoping it would be absorbed by the eagerly attentive listeners. However, there must be a winner and a loser. In this case, the loser was David Cameron, the “Remain” leader and current Prime Minister. Cameron stepped down as leader of Great Britain as the result of Brexit was released, explaining “The country requires fresh leadership” to lead the country forward into this new age.
This was the catalyst of Britain’s year of political instability, which saw the Conservative Political Party lose a majority in Parliament, in the most recent general election held in June 2017. The Conservatives were forced to turn to the DUP of Northern Ireland, who acted as King makers to ensure the conservatives held enough seats in Parliament to hold a majority. This now makes it increasingly hard for bills to be passed and new laws to be put in place. This is most apparent currently as Great Britain’s negotiation team begins its 2-year negotiation process to discuss the terms of Brexit, which will take place in the spring of 2019.
But what does this mean for Business? Brexit hit the Pound like a freight train, seeing it drop from £1.50 per US Dollar to £1.28 in a matter of hours. The weakest the pound has been since 1981. However, is this a bad thing? It seems to be a double edged sword. With a weak currency, Britain will be forced to turn to domestic producers to supply desired goods, therefore building domestic profits and helping local economies grow. Moreover, Exports are likely to increase due to other currencies being able to purchase more pounds per unit of foreign currency than pre-Brexit. This does also mean Britain’s imports will decrease, due to unfavorable foreign exchange rates, resulting in a fall in goods from abroad. In conclusion, Britain’s Trade deficit will decrease and possibly become a surplus, which is never a bad thing, however, consumers are losing out on cheaper prices and possibly better quality products.
Trade is paramount for any country to succeed and prosper. As a result of Brexit, Britain loses access to the single market, the EU’s greatest asset. A free trade agreement between all countries involved, limiting tariffs and unwanted taxation. Britain consequently must calve out individual trade deals with over 28 countries, to discuss the movement of goods and services across international borders. But, this could result in strengthening relationships with world super powers USA and China. President Trump in a meeting with Prime minister Teresa May, said “A very big, very powerful” trade deal will be created with hast.
Uncertainty in business is never a good thing. Unfortunately, it is a cloud which is hanging over the United Kingdom’s business sector. Many foreign direct investment plans have been put on hold until the negotiations with the EU have been complete. Companies are unwilling to Invest in the U.K due to this sheer factor of uncertainty, and who can blame them. Until the spring of 2019, Britain’s economy will be barely held together in government expenditures and the hope of a positive outcome from the current Brexit negotiations.
The United Kingdom is an extraordinary place, which has produced some of the best academics, athletes, and monarchs the world has seen. It's home to the world’s best tea, big Ben, and Queen Elizabeth II. It once held the world’s most powerful empire, however, those days seem far behind the U.K as it fights to survive Brexit. But there is one thing the people of the world can be sure of. Although Britain currently seems down and out, there is no doubt, due to the resilience of this great country, Britain will once again return to its former glory.
Photo Illustration by Marist Business Visual Data