Life after Brexit

"The moment we want to believe something, we suddenly see all the arguments for it, and become blind to the arguments against it". George Bernard Shaw

I've always said that if put to a referendum the UK would vote to leave the EU after years of hostile press propaganda. Politicians have always known this. And so it will be next week. I shall vainly vote to stay, with reservations, having been unconvinced by anything the Brexit camp have produced.

This piece is not an attempt to persuade anyone of a course of action, and I'm not going to trade insults through "Chatbox" or respond to comments – make of it what you wish. I aim to lay out markers for how things might unfold in the short, medium and longer term so that we might revisit it from time to time.

It's difficult to predict precisely as there are so many variables which can affect the future that we can't easily anticipate and filter out Brexit effects from other causes – attaching figures is almost hopeless guesswork. There are two basic scenarios – one where a "Norway" style trade deal is negotiated, one where it isn't, but that'll be a minimum of 2 years anyway.

This is what I've winnowed out reading as much as possible of informed neutral pundits, as well as some personal knowledge of economics and the EU machine. You can be certain one of these won't happen, guess which.

IMMEDIATE EFFECTS (say within 6 months – not in any order)

• Pandemonium in government as no plan for future in place. Much uncertainty in country about what is happening. Substantial devaluation of sterling. Possibly initially reaching parity with the euro, with some recovery of half the loss as time goes by. But Euro will be affected too dropping against a basket of currencies. (Remember Sterling was at 1.40 to the Euro prior to referendum being called). Sharp drop in FTSE continues, again with some bounceback after initial dust settles. Sharp interest rate rise to prop up Sterling. Mortgage rates rise, property prices drop significantly. Net disposable income declines

• Cameron and probably Osborne resign, or are forced to resign. Chaos in Tory Party with eventually Johnson (or a proxy) assuming leadership with Gove, Grayling and Duncan-Smith in senior positions. Some "remain" MPs in cabinet as sop to the left wing of party, but cabinet mainly packed with Brexit supporters and lurches to the right.

• Scots Nats exploit opportunity to call for another Scottish Independence Referendum, and do so unilaterally if Westminster refuses. Further hit to Sterling. Maybe even calls in Wales for the same – on possible basis of some link up with an independent Scotland. Possibly proposal of a "Celtic Block" incorporating Scotland Wales and NI floated together with their rapid accession to EU

• Sharp decline in inward investment to UK as uncertainty reigns

• No clear idea emerges of what happens with 1.5 million UK residents living/working in EU, or what to do with EU nationals in UK. No meaningful solution to non-EU migrant problem

• European firms stop recruiting Brits into their European operations as they are uncertain of what their future status will be and prefer to recruit EU nationals instead

• No call for General Election as Labour continue to be unelectable and with Liberal parties remain unable to exploit Tory divisions. UKIP effectively disappear as their mission is over.

• GDP/Capita relative to G8 falls

• Johnson & Co proclaim these are just initial adjustment pains and it'll eventually be a great success. Right wing newspapers continue to support him, whilst blaming problems on everyone else – especially the EU

• James Dyson doesn't repatriate production from far east

MEDIUM TERM with trade deal (say up to 4 years)

• Brexit shock forces EU to consider meaningful reform to head off others leaving

• Hostile EU machine forces UK into humiliating terms for a Trade deal as government panics to stop country haemorrhaging jobs. Johnson & Co hail it as a major victory. Net contribution to EU budget remains near enough same, free movement of labour/ EU migration continues. We start to have no say over making of EU law and standards, and Germany loads them in its favour.

• Scotland leaves UK. Further significant shock to financial markets.

• GDP/capita starts to recover.

• UK loses international influence

• James Dyson still doesn't repatriate production from far east

MEDIUM TERM without trade deal (say up to 4 years)

• Hostility in EU towards UK/England means no trade deal except under punitive terms can be agreed. Johnson & Co complain of EU bullying but to no effect. Johnson & Co declare they will go it alone.

• EU tariffs imposed on UK manufactures (eg 10% on cars), but this is initially offset by currency devaluation. UK responds in kind meaning sharp rise in costs of EU produced goods. More generalised increases in costs of imports as forward currency hedging works its way out of the system and full effect of devaluation takes effect. Household bills go up sharply, but incomes are stagnant. Deficit increases as tax revenues fall. No removal of VAT on fuel. More cuts to public services to cover the gap, together with increased stealth taxes. More cuts to State pension. Roads and infrastructure continue to deteriorate. HS2 cancelled, whilst Boris drains other infrastructure projects to force building of "Boris Island" in Thames Estuary to house new London Airport.

• Sharp decline in foreign inward investment continues with insignificant counterbalancing domestic investment. Toyota announce next version of the Avensis (due soon) will be built at one of their EU plants as this is 85% of their market. Other international manufacturers with operations based in the UK for its access to the EU market and influence over EU standards and regulation progressively follow suit. Support businesses supplying these begin to fail. Unemployment begins to rise significantly. Brexit proponents deny cause and effect whilst remainers cry "told you so".

• Big chunks of City financial operations start moving to EU – Paris and Frankfurt – with loss of UK jobs.

• UK nationals with EU based jobs are unable to obtain work visas unless in real shortage specialities and are forced to return to UK where there are no suitable jobs for them. Young British people start to experience real problems in finding meaningful careers.

• UK retirees currently living in southern Europe EU under right to free movement laws cannot obtain residency status and are forced to return to UK and their European houses are effectively worthless. Major problems emerge housing them and a major impact ensues from demands on NHS of primarily aged influx. Massive impact on other already overstretched public services.

• Illegal immigration from non-EU countries increases, as does size of "black economy" as service businesses and agriculture dependent on cheap labour turn to illegal gang masters to replace cheap EU workers who have returned to EU. Minimum wage is scrapped to help prop up businesses. EU covertly relaxes efforts to prevent through illegal migration to UK as it realises it can dump refugees on UK and relieve itself of the burden. Johnson & Co cry foul again to deaf EU ears. Remainers say "told you so"

• The promised removal of EU regulatory burdens on business is revealed as illusory by a revue which concludes, as other have done in the past, that the major regulatory burden is doing the work of HMRC in collection of PAYE and VAT. Some token removal of employment and environmental regulation.

• The shock of Brexit together with emboldened anti EU elements in various EU countries forces arrogant EU (and especially Germany) to consider real reform to prevent further fracturing. The UK is still not invited back to the party due to lingering resentment.

• Johnson & Co proclaim success is now just round the corner and it's already bearing fruit and we are heading for great things. Right wing newspapers continue to support him, but whilst still blaming problems on everyone else – especially the EU -murmurings of discontent start to surface.

• James Dyson still doesn't repatriate production from far east

LONGER TERM – NO TRADE DEAL (2-15 years)

• Tories win next general election as loss of Scottish (and possibly Welsh) vote, together with continued Labour and Liberal weakness renders UK effectively a one party state.

• Just possibly moves for a new centre party emerge, drawing on left of Tory Party, right of Labour party and still disaffected liberals unable to return to the fold.

• UK forced to make major reductions in defence spending as economy continues to shrink and UK is increasingly seen as a sideshow by other countries. We lose our status as an international power and seat on the Security Council and increasingly rely on the US for our defence. As a "loner" without the collective muscle of EU partners we are increasingly unable to resist the dictates of large foreign corporations like Google, Amazon, Monsanto etc who increasingly dictate social, environmental and economic policy. The nuclear deterrent is scrapped as a cost saving measure.

• Ellesmere Port GM factory loses bid to build next Astra and closes. Other export focussed manufacturers continue to shift production either to EU to avoid import and distribution issues, or move production to the far east or South America where lower input costs offset import costs to EU. GDP/Capita and average income decline significantly relative to other countries. Youth unemployment starts to soar and become chronic. A reformed EU starts to flourish and grow. Ukraine is admitted to EU and NATO, despite tensions with Russia.

• The NHS can no longer be sustained through the public purse as revenues decline and an increasingly elderly population stretch it beyond capacity. The already privatised "providers" (hospitals and primary providers) start making basic and top up charges to "free services" in a similar to way to NHS dental charges. "Free" provision eventually becomes similar to "Medicare" in the US with significant insurance premiums needed to ensure adequate access to health care – the poor won't be able to afford this – as in the US.

• The effects of global warming begin to accelerate at the same time as the world population continues to grow fast. The forecast pressure on world food supplies begins to really materialise and commodity prices rocket. The UK faces a significant shortfall in domestic food production despite best efforts of our farmers to increase it. Food exporting countries either keep more to themselves or price the UK out of the market as more affluent countries like China and India are able to bid more. Meanwhile an expanded EU, especially with the vast grain growing regions of the Ukraine, is effectively self-sufficient. However it faces increasing pressure from a hostile Russia resentful of losing access to Ukrainian food production. Migration pressures to areas of food surplus increase, but now mostly bypasses the UK.

• Eventually in about 15 years or so Brexit fades in the memory, Johnson & Co, along with Corbyn are long gone from the political scene. Print newspapers have broadly disappeared and alternate ways of brainwashing the populace emerge. A new political elite emerges who faced with the desperate situation of the country apply to rejoin the EC. This is granted, but under much harsher terms than now, dancing to a German tune and with a junior status compared to a vibrant Poland, Hungary and Romania

• Johnson & Co proclaim from their retirement mansions in California or similar that they showed the EU and beat them at their own game. A new scapegoat for all the country's ills is found.

• Now with the status of the underdog for the first time in decades we win Eurovision with an entry written and performed by heartthrob boy band Peter Oxley, Canal Cat, Den C and Bobbee2000 whilst Geoff Farr performs stunt aerobatics above.

• James Dyson still doesn't repatriate production from far east.

Article written on 13th June 2016.

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