25 March 2018
Alicia Ngomo


Alicia Ngomo - Accenture Strategy

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Brexit and the problem of precedents

30 May 2016  |  4888 views  |  1

I had never yet pronounced myself about Brexit. Firstly because I realise this is a decision for the people of Britain to make, but also because in a way I am not partial to the decision. As a Spanish national, and now a British permanent citizen, I very much selfishly prefer Britain to stay in the union. Not only would an “out” vote make my life a bit more complicated but I also do believe the EU is stronger with the UK in it.

Despite my reservations to be involved in this debate, today I feel I should share some views, after I just had the most interesting debate at my local drycleaners about Brexit.

The debate involved the shop owners and their tax attorney daughter, all originally from India, a Polish girl recently arrived in London, four Brits and myself.

Worth noting that this drycleaners is in Kilburn High Street, and the people I debated with where low to mid-income working class, with the odd outlier, including myself and the daughter of the owners, who is a white collar tax advisor in the city.

The key points of discussion were as follows:

A) I was surprised to hear unanimously from the group that they expected the result of the vote to be “Out”. They were adamant that everyone they know is going to vote “no” to Europe. Their main argument being that “they need to stop telling us what to do”. A number of anecdotes were referred by the shop owners of several colleagues of theirs having been pushed out of trade as a result of a European ban on this type of mangoes or that type of bananas. They had besides all heard on TV that the UK buys more than it sells to Europe, and they found that outrageous that “we are paying for the EU”.

One thing that strikes me is the level to which the general public is unaware of what being part of the EU really entails. People are going to vote in this referendum based on electoral propaganda. And after this debate and a couple other conversations over the last year, I wonder if the population, and in particular the working classes, whose vote is quite determining in the election, have a clue what belonging to the EU really means.

I wonder to which extent governments throughout the European Union have been clear to their populations on what the EU is, how does it works, what it means in terms of constraints and opportunities for the country and the individual, where does the EU decide versus the UK, what kind of things are now possible for the UK thanks to being part of the EU etc. Would having a bit more objective understanding help? One can but wonder.

Unfortunately the human being is programmed to remember more easily the negatives than the positives, and therefore tariffs, quotas and employment laws are more easily remembered than subsidies, freedom of movement or international political presence, to cite a few of the benefits of belonging to the “Euro club”.

B) Another interesting discovery was hearing the younger people in the shop, even the more educated, saying they, in their own words, “couldn’t care less whether we are in or out”. Really? You do not care in a matter of such relevance to the future of your country? I find that extremely worrying.

C) Accenting migration from Eastern European countries and others, was angrily cited by some of the group as one of the ways the UK was being more generous than their European fellow states,  and therefore another way in which the UK is ‘losing’ from this union.

I strongly disagree with that view. The UK has traditionally been a receiver of migrants, and by the same token of talent, which has contributed greatly to the prosperity and grandeur of the nation. The UK has welcome refugees and migrants from all countries during its history (from Karl Marx, Handel, Sigmund Freud to the Polish and Spanish migrants of recent years). Britain has shown an enviable ability to adopt the best of its migrants and incorporate it to its culture making it part of itself.

The social implications of Brexit in a country where a lot of the workforce comes from the EU, and the potential subsequent talent loss, is something voters should also keep in mind.

It was indeed an interesting debate and very eye opening to the elements that contribute to form a voter’s decision.

I can’t personally say that the UK would be better or worse in 20-30 years’ time whether in or out the EU, nor I believe anyone can claim to know that. It is very probable that the country would find its way to prosperity again, after a period of instability, in both scenarios.

I do believe staying in has a number of benefits, being part of greater union gives us more power both economically and politically in an era where regional unions are the norm from NAFTA, to APEC, to Mercosur, to African Union…

However, I believe the ‘out’ scenario would potentially bring a harsher short term recession, and as the FT published recently, household incomes would be affected as far as 10 years down the line.

I attended a very informative session with George Parker from the FT at Accenture last week. The out vote means higher short term to medium instability in financial markets, a transition period that may prove long as a whole new relationship needs to be renegotiated, the potential retaliation of some EU members whose unanimity of vote is required to decide what new deal is to be negotiated with the UK, and, last but not least, the impact in the EU. This will undoubtedly require a huge diplomatic effort on the part of the UK, create uncertainty for business that as part of their contingency planning might decide to relocate activities/headquarters out of the UK, and have huge tax and labour implications as well.

However the most negative effect of this referendum in my opinion is the mere existence of it. This vote does not only create instability, which the current GDP slower growth and business uncertainty are already demonstrating. It also, similarly to the Scottish referendum, sets a dangerous precedent both for the UK and the union.

The precedent that it is acceptable to question something as fundamental on political grounds, and that referendums, rather than an extraordinary tool, are now something to be used regularly to solve the inability of politicians to reach consensus. I wouldn’t be surprised that this vote repeated itself in the near future or that other countries repeated the experience i.e. already hinted at by the extreme left government in Spain, or France’s extreme right…

All said, I still hope the vote result will be in favour of remaining in the EU.


Comments: (1)

Chris Warburton
Chris Warburton - Arum - Northampton | 01 June, 2016, 22:04

Alicia, this is a great article.  I too am getting concerned.  It is important to make decisions understanding the potential consequences and facts.  I don't see this as being the case at the moment.

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Alicia is currently a Manager at Accenture Strategy with a focus in Financial Services. In her current role she designs and executes business and digital strategies in banking. She also acts as adviso...

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