The campaign was fought, the vote was held, turnout was high, and the British people gave their verdict in a free and fair referendum on 23rd June for the United Kingdom to leave the European Union. 17.4 million people voted for Leave, more than have voted for any other issue or party in our country’s history.
Before the referendum, we were bombarded by Project Fear, full of unrelenting doom and gloomy predictions should the UK vote to leave the EU. These predictions are now being proven false.
For starters, Nissan has just confirmed it will build both the new Qashqai and the X-Trail SUV at its Sunderland plant, which is great for the UK car industry. But this is far from the only good news.
In the month after the vote there was a 1.4 per cent jump in retail sales. High street stores including Next and John Lewis have said that trading has not been affected by Brexit and pay, including bonuses, rose 2.3 per cent over the last year.
The depreciation in the pound was a much-needed correction to our overvalued currency and is proving to be a valuable boost for our food and farming industry and other exporters. It was a boon to the tourism industry over the summer with visitors from abroad encouraged to spend more thanks to a favourable exchange rate. Britain is running a huge current account deficit which amounts to 5.9 per cent of GDP. By making exports more competitive a weaker pound helps correct this.
From April to June, UK industrial output increased by 2.1 per cent and British factories registered their best month in almost three years during September. The manufacturing Purchasing Managers’ Index (PMI) jumped from 53.4 to 55.4, where results above 50 indicate growth, thanks to an increase in exports. The UK service sector accounts for four-fifths of Gross Domestic Product and the September services PMI measured at 52.6. The International Monetary Fund is predicting growth next year and has predicted that Britain will be the fastest growing of the G7 leading industrial countries in 2016. The Office for National Statistics has just published its latest 2016 Q3 data where GDP—quarter on quarter growth—figures are +0.5 per cent. Employment is at a record 31.81 million. Unemployment is down 118,000 over the past year and down 853,000 since 2010. The UK inflation rate as measured by CPI is 1 per cent, a full 1 per cent lower than the Bank of England’s target.
The UK does face difficulties ahead, not least because of the ongoing systemic instability of the Eurozone. Nobel prize-winning economist Joseph Stiglitz (also interviewed by Prospect recently) has written that while Germany is doing “relatively well,” “soaring youth unemployment” prevails in France, Italy and Spain. The UK, however, remains the most popular destination in the EU for overseas firms and inward investment projects are up 11 per cent on the previous year. The three biggest sources—the US, China and India—are all the more likely to continue investing following Brexit. We will continue to broaden our reach with emerging markets across the world.
In September, Bloomberg reported that London remains ahead of New York as the top global financial centre in the world according to The Global Financial Centers Index. Our immediate competitors include New York, Singapore, Hong Kong and a number of American cities. An EU-27 country does not appear until Luxembourg at 12th place with Paris sitting at 29th —behind Vancouver, Melbourne and Beijing.
At the last count, London had around 40 per cent of the foreign exchange market, whereas Paris has only 3 per cent. London trades more euros than Paris, Frankfurt and Milan combined. The Financial Times recently wrote that, “HSBC aside, most banks scoff at the idea that Paris would be a natural venue.” Frankfurt, home of the European Central Bank and Germany’s financial capital, has a population of 700,000 (vs. London’s 8.7m), is seen as provincial and therefore unpopular with staff.
Having voted to “Leave” we can now seize this opportunity to leave the political and judicial arrangements of the EU and re-establish a new relationship with our European neighbours, based on trade and cooperation.
We can now take back full control over all government policy including in the areas of immigration, farming and fisheries. Regaining control of immigration will allow us to choose the most skilled personnel from all over the world regardless of country. We will have full representation on the global regulatory bodies, where we are currently represented by one twenty-eighth of a European Commissioner. Increasingly, regulations are made at global level and by leaving the EU we can exercise the right to put forward amendments and to vote on key world bodies such as the WTO; working with international allies we can take a leading role in galvanising world free trade. The recent example of the proposed free trade deal between Canada and the EU, called the Comprehensive Economic and Trade Agreement (CETA), is a fantastic reason to look forward to Brexit. Again a deal of this nature stalled, after opposition from a Belgian region.
As we begin to negotiate our exit from the EU, we do so from a position of strength. Britain continues to hire, spend and grow. We are the same outward looking, globally-minded country that we were before the summer and before the referendum. We voted to “Leave” but we remain open for business and I remain optimistic for the months ahead.