What Now For Brexit? The Pragmatic Path Ahead

What lies ahead for Britain's future?

Last Thursday’s vote for Brexit disappointed many, and as our uncertain political and economic situation plays out, many young people are worried whether we will be left permanently less well off. However, our disappointment should not turn to despair and denial.

On social media, we’re asking for a do-over in the form of a 3 million signature- strong petition that was submitted to the government. But there is crippling hypocrisy and naivety in complaining about the logistics of the referendum, only after the outcome. Yes, 52% – 48% is a tiny winning margin and concessions are already being made to reflect this, with senior Leave figures saying they will fight for Single Market access. But politicians cannot, or at least should not, again, betray the British public. It is very easy to complain about the result in the aftermath, but if you cared that strongly, did you show that passion during the campaign and hit the streets to argue for your side? If we allow for a second referendum though, then what? What if Remain wins this time? Should we do a third referendum and call it next one wins?

This lambasting of a democracy will leave the government no better prepared to salvage the brighter future our generation deserves.

This article does not attempt to deal with the flaws or logistics of a democratic system, that will be discussed in later Brexit coverage on Whippersnapper. Instead, we merely settle to the immediate task at hand. To paraphrase a quintessentially British saying, we need to keep calm and carry on. Here’s how we do it, while hopefully fulfilling the best interests of BOTH those who voted remain and leave.

Firstly, casting bigots and racists aside, the issue of immigration revolved around the notion of uncontrolled borders and an uncontrolled influx of immigrants. For the remain voters, immigrants were net contributors to the economy overall, paying their way into government coffers and providing valuable labour and support for the public services that we all benefit from. For the leave side, the issue was more that we cannot control how many and who comes in, with illogical allusions made to risk of an influx of criminals and terrorists from the EU. Post-Brexit, a very logical way forward is indeed the Australian style points system championed by Boris. The Remain side criticised this proposal, stating that in Australia, the introduction of this system actually led to an increase in immigrants. However, this clearly is due to the way the points system is set up, and it is very easy to control quantity as well as quality. If we do end up having an increase in immigration, but also an increase in quality of those coming to our shores, our country can only benefit.

Secondly, Britain voting Leave has seen a sharp plummet in the value of the pound, falling to a 31 year low against the US Dollar.

The £ has fluctuated wildly against the $, falling to record lows.

The £ has fluctuated wildly against the $, falling to record lows.

In the short run, this makes our imports more expensive, while we do not benefit from an increase in exports. However, in the medium to long run, with the devaluation likely to set a new normal for the value of the £ against other currencies, this will provide a permanent boost to our exports, making them more price competitive. At the same time, our world leading financial sector and services takes a hit, with Fortune estimating London could lose up to 40,000 workers from the financial services exodus.

This essentially gives Britain the opportunity to finally go about restructuring the economy, re-balancing our resources towards exports, and away from our heavy dependence on services. Since deindustrialisation, for the last 20 years Britain has seen increasing regional inequality and the growth of the North-South divide. On one side are the laid off manufacturing workers disgruntled at losing their job to globalisation forces and competition overseas, and on the other side, the affluent London and South-East. According to The Equality Trust, median hourly pay in 2013 was £15.84 in London, while only £10.56 in the North East.

In fact, this disillusioned north came out in droves to vote Leave in the referendum, perhaps in retaliation at being left behind while London and the South-East boomed to prosperity, and at the fallacy of migrants stealing their jobs. There is now incentive to soothe this geographical friction however, by re-focusing on establishing a manufacturing sector once again, which will return investment and jobs to the North, as well as reduce Britain’s dependency on the financial sector which is now no longer as sustainable or competitive, due this week’s dramatic fall in foreign investment and the downgrading of the UK’s credit rating. The government must unite and take advantage of this golden opportunity in front of them.

Finally, on the issue of jobs, both sides in the referendum claimed to have the worker’s interests at heart, with the priority being the protection of domestic jobs. Instead of trying to decide which side had the correct or best way to protect jobs, Brexit has opened up the path to a new trade future for Britain that encompasses the protection and even creation of jobs. While there is a political incentive to make a show of treating Britain punitively, this ultimately has to be tempered with the fact Britain is still in the top 6 largest economies in the world and is a valuable trade partner. Britain now has the capability of negotiating bilateral trade deals to replace the regional EU trade deal. Bilateral trade deals (free trade agreements between two states)  tend to be more flexible and efficient than multilateral and regional trade deals, as it escapes the gridlock found in places like the World Trade Organisation, where all 162 members have a veto and negotiations can run into the decades. Bilateral deals can reduce the knots of bureaucracy and the excessive harmonisation of trade standards that came from the EU. This can be combined perhaps with Britain possibly joining TTP meaning Britain can now strike a balance between efficient trade deals with key economic partners, and retaining a degree of the collective bargaining power it had as part of the EU.

The path ahead therefore is rocky and filled with uncertainties. However, we must unite, and heal over the cracks within the country created by the referendum as put by Boris. The racists and bigots that see Brexit as national vindication of their view that immigrants harm our country must be shut down and condemned. Meanwhile, through pragmatic policies and economics that identifies the mutual goals of both the Leave and Remain campaigns, such as the protection of jobs and the control of borders for high quality migrants, we can yet salvage a future for the country and the youth.

About Jonathan Ko
Jonny is an 18 year old student from Kent with a passion for behavioural economics and current affairs. His favourite book is Nudge and he loves finding out about human behavioural biases and quirky, inventive ways to combat them. In his spare time, Jonny plays basketball and produces music, and his go to playlists are hip-hop and anything J Dilla.