Saturday, 11 June 2016

Brexit and the precautionary principle.

As the campaign has gathered pace towards Britain's referendum on membership of the European Union, I have begun to reflect more and more on the horrid lack of any post-Brexit plan.    I know the Bank of England and the Treasury have been hard at work with their contingency planning and that liquidity will start flowing into the banking sector from 14 June in case, following a leave vote, capital outflows start in earnest. What bothers me, is that those two towering  members of the intellectual right – Boris  Johnson and Michael Gove -  have not come up with a convincing strategy, never mind a plan  for what follows.   Given the absence of either,  two inexorable laws are almost certain to follow: sod's law and  the law of unintended consequences.

Sod's law states  that your bread always falls butter side down or, if something can go wrong it will. Many, on the exit side, are pinning their hopes on the fact that given balance of trade in favour of the EU that Brussels will be gagging to do a deal with us and to let us have all of the benefits of membership of the single market with none of what we might perceive to be costs.    Angela might be wildly excited by Boris  but could she persuade her own legislature to do a deal on such favourable terms? Indeed, all the members of the European Council be confident likewise? I doubt it very much no matter what pressure VW and BMW bring to bear on their political leaders.    The lack of any coherent strategy or plan for taking the British economy forward in the post-Brexit era  convinces me that the law of unintended consequences is just waiting to make its mighty presence felt. People might call me a pessimist but I have discovered over many years that absence of forethought exposes you to getting stuffed in ways that you never expected!

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