What now for the UK?

Now I’ve recovered from the initial shock of the Brexit vote, here are some thoughts on it all:

1. I think, from reading comments in the Facebook ‘Vote Leave’ page, and seeing the demographics of the Leave vote, that the vote passed on the back of a huge protest by poor people who feel disenfranchised by globalisation (and immigration as part of that). Among the wealthier Leavers, the motivation appears to be a desire for better democracy as well as elements of nostalgic British nationalism.

2. It is impossible for Scotland to remain in the UK after this. The vote has highlighted the need for us to be able to control our own foreign policy decisions. As an independent country within the EU, we would have a veto on matters relating to foreign policy and defence (as well as social security and taxation). But as a country within the UK, we have no veto on foreign policy or defence decisions.

3. England has entered a risky situation internally as well as externally. Anti-immigration sentiment was purposely inflamed by the Leave camp – and now there is talk of no real change on immigration. That is a dangerous coupling.

4. For people on a lower income, immigration is more threatening than for people on a higher income. Part of this fear is misplaced – immigration gets used by cynical politicians as an excuse for why people now struggle to find a home and pay their rent, so they can distract attention from the downside of things we’re told are good: right-to-buy and house price hikes.

But part of the concern is real and reasonable. Higher levels of immigration can impact on people’s already-low incomes by making it easier to pay them lower wages. This is avoided where there is a matching increase in demand for employees, i.e. the local economy is growing. But increasing the supply of labour without increasing the demand for it always has the effect of making it lower value. So areas of economic stagnation have voted Leave for this reason I think. I don’t believe they are racists. They are reacting to their economic circumstances. If the economy can be made to grow across the board – in neglected rural and semi-rural areas as well as in the cities – I am hopeful that nearly all this anti-immigration feeling can and will be consigned to the history books.

But if the UK is allowed to slide into a recession now, with anti-immigration feeling running high, no change on immigration numbers, plus further reduced availability of jobs, then we are looking at the very worst possible scenario in terms of race relations. People have been encouraged to blame immigrants for their difficulty in accessing the job market, and are now finding there will be no real change on immigration. In the case of recession, they will then be competing for even fewer jobs. It is easy to see the danger of where that could lead: it looks like a disaster waiting to explode. Farage has already talked about people using violence against immigrants if they don’t get the controls he has promised them (controls which indeed they won’t get). The far-right in Europe has already been strengthened by Brexit. British tabloids like the Express have already shown support for this.

5. I want to see the UK take bold steps to prevent a recession. I don’t mean I want to see the government getting further into debt. I mean, now must be the time to look seriously at monetary reform. The economists Joseph Huber and James Robertson worked out a blueprint for a government to follow: basically, it involves two steps. Firstly, the central bank issues currency in the form of a grant (no charging of interest) to the government’s current account. The government then spends the money into circulation. Secondly, it is no longer possible for private banks to print currency into their customers’ current accounts (the way 95% of our currency is issued today). There are checks in the system to prevent problems like inflation, and there’s the added benefit of creating a big pot of wealth for the government to spend. Now of all times a decisive step in this direction is crucial.

You can find out more about Huber & Robertson’s proposal here: http://www.neweconomics.org/publications/entry/creating-new-money

6. Scotland could use the same system to create its currency. The system takes one source of profit away from private banks, by taking away their right to issue credit entries into people’s bank accounts and charge interest on them. It also gives banks a safer, more stable economic environment in which they can do the rest of their business. And it lets the central bank control the amount of total money in circulation, instead of having to try and manipulate that amount through changes in interest rates. Unlike the empty promises of the politicians leading the Leave campaign – the promises of extra money for public spending, which they have already told us, after 2 days, could not be kept – this new system for issuing currency really offers huge amounts of money for governments to spend on public services and debt reduction. It would inject cash back into the public sector, without any more risk of inflation.

7. If the United Kingdom is going to continue in some form, it needs to be more democratic with its constituent nations. England and Wales should, I think, each have a veto on matters of defence and foreign policy. If Northern Ireland decides to leave the UK, it might choose to join with Eire and adopt the Euro. Perhaps Northern Ireland could also choose to join with Scotland in a confederation with a shared independent currency, outside the Eurozone but within the EU. That is my preferred option.

Please have a look at the free pdf download: http://b.3cdn.net/nefoundation/1254f6e8b233409758_oym6iv00y.pdf.

Sophie x

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