What Next?

[Margrethe]

I have moved through the stages of shock and grief and now want to think about what we need to do as a country to succeed. I'd like to hear other people's ideas too. Enough with the doom mongering! It's a time of great risk, but also of opportunity. I'll throw out my nascent thoughts. I know they are far from perfect or "the answer," but I'd like to get a little bit of constructive conversation going. (I know nitpickers will come along and complain and critique, I could do myself; it's easier than being constructive and creative.)

Here are some things I think we need to do:

1. Increase airport capacity in the SE: we can't pivot away from Europe and towards the rest of the world without it

1. Renew Trident: we are more on our own now and we need it to stay a relevant part of NATO, frankly; we should consider moving the subs from Faslane in Scotland (The Scots don't want them!) to Portsmith or perhaps Millhaven in Wales where they really need the jobs after the Port Talbot closure and some of the heavy industry skills might be transferable

1. Pull the plug on the Hinkley Point Nuclear power project. That should now be a project for building up UK capabilities and jobs not a pork barrel for the French. At the very least it should be a bargaining chip going forward.

1. Start rewriting UK public contracts to favour UK based subcontractors and suppliers, eg. we are buying more rolling stock for our railways all the time, we really should favour buying from domestic producers

1. Start some high profile scientific projects with the best universities in Asia (Tsinghua, Peking, Tokyo, Singapore, etc.)

1. Don't start negotiations with the EU from a position of compromise. It's pretty obvious that people voting leave want control over immigration so rocking up and asking for the Norway deal as your starting point is unbelievably stupid. (For this reason, Nicky Morgan is a terrible candidate for leader.) Start asking for what you really want, free trade with control over immigration. You never know how far you will get, if you try. At the moment, it all feels horrible, but we should be doing an inventory of every lever that we have and understanding what the different players in the EU want and need. We also need to baseline the worst case scenario (WTO terms, so we have a reference point.) There are actually an infinite number of possible outcomes. We can help ourselves by being creative. If our banks (a major industry for us) need Euro Passporting how can we bargain? Can we link a certain number of guaranteed visas for EU migrants to the amount of passporting we do in a year?

1. We need a chancellor who will invest heavily in the UK and fund that investment with borrowing. Now is a time for expansionist policies.

Basically, lets start thinking instead of panicking.

(BTW, I voted remain. I just think rowing back isn't practically possible or at this point desirable. We have had the economic shock now.)

Those are my thoughts at the moment. What have you got? Please share!

I don't disagree with your premise, but much of what you propose is a non-starter.

1. Who is going to invest in this? The airlines have been hammered on the markets, because they are particularly exposed to brexit risks. It may be that we don't need new capacity, if it becomes more difficult/expensive to travel within Europe.

The other issue is political games over where new airport capacity might be located. If a stable coalition government could not get a decision made then what chance an unstable Tory governmenr coping with brexit fallout? Especially if led by a PM who supports the least popular/least credible of the three alternatives for airport expansion.

1. Who pays for this, if tax revenues are falling? Is it politically possible to throw money at Trident while cutting everything else? Will people accept higher income tax to pay for it?

1. I don't have a view on this as I don't know enough about the nuclear power industry.

1. Impossible while still in the EU. We haven't even started the two year negotiation period yet. Revisit this one in about 2019 ...

1. Why not? But we could be doing this now (maybe we already are).

1. Pie in the sky. We're in a terrible negotiating position that got worse when Cameron bottled triggering article 50. The UK doesn't even have any credible trade negotiation teams in place. Optimism is fine but delusion is a bad starting point for any negotiations.

1. I agree that it's not the time for austerity but with tax revenues falling and Britain's credit rating trashed, you're asking a lot of the future chancellor ...

We have had the economic shock now

We haven't. We've had a sterling crash and a lot of UK-based businesses are worth a lot less than they used to be (I'm not talking about the FTSE 100, which is mainly international companies, although even they have been hurt in terms of their dollar valuation - but the FTSE 250 has been hurt much worse).

The impacts in the "real economy" are still to come:

• job losses as investments are postponed and some service and financial sector businesses relocate part of their operations
• inflation resulting from sterling devaluation
• potential loss of consumer confidence
• house prices?
• contraction of the real economy as the above factors feed through into people's spending decisions

The economic shock has barely begun

"We have had the economic shock now"
"The economic shock has barely begun"

Product Recall: crystal balls to be returned by tomorrow please, due to unreliability issues.

Margrethe I think this thread is a great idea, very constructive.

I think this thread is a great idea, very constructive.

Then you need to post constructively. Just dismissing the economic impacts of brexit, without any coherent arguments, is the opposite of constructive. Unless you know what the impacts are likely to be, how can you propose credible ideas to counter them?

I'd remind you that the one organisation that did have a contingency plan - and which put it into effect both before and after the referendum - was the Bank of England. The reason it had a plan was that it had made a realistic assessment of the immediate financial and economic risks.

Where are your constructive comments Mistigri? Or are you just here to rubbish other people's ideas?

I have some constructive ideas but they are as pie in the sky as most of margarethe's.

I honestly don't at this point see what can be done that is constructive, except in the "damage limitation" sense as has been done by the Bank of England. In order for construction to begin, you need to know what base you're building on and what you intend to build.

"Constructive" at this point would be for us all to acknowledge that the political and economic imperatives are pulling us in opposite directions and that compromise will be required. The Tory party needs to unite around a compromise solution (Norway) and then put that to the people in a GE or (God forbid) another referendum.

Constructive thought needs critical analysis.

You have to understand the problem - what it is and how far it goes - before you can suggest the solutions to the problem.

Rule 1 of Good Management.

I'd like to hear your pie-in-the-sky ideas Misti. I'd really rather have some blue sky (call it fantasy if you are more comfortable with that) ideas than just sit and think the sky will fall and there is nothing we can do. I do think ideas change the world, I realise mine may leave a lot to be desired, but I am trying to show willing and encourage other posters to have a go.

We have a situation at the moment where everyone wants to do the critical analysis and no one wants to do the harder work of synthesis.

I think it's quite hard even to do the analysis at the moment, tbh Margarethe. Any economic forecasts at this point necessarily contain some assumptions on whether we actually leave (ie complete brexit) or don't (either remain, or EEA, which for businesses and individuals at least are largely identical).

It's hard to develop solutions when you don't even know where you are starting from.

Right now, from a business perspective, perhaps the most constructive move would be for the government to come out and either invoke article 50 with no further ado, or to say that they don't intend to do it at all.

Well until we know what the problem is we can't do that!

We don't know what we want out of the EU.
We don't know what the EU will give us.

How can we start talking about how we spend money when we don't know how or where we will get that money from?

You are jumping the gun. Whether you like it or not.

I understand what you are saying, but this isn't a project at a large corporation or a study at a university, where you have a lot of control and can plan in a linear, step by step manner.

It's a dynamic process. There will be different visions of the future floating around. Fairly soon, people will start to latch onto one of them and coalesce around it. It will then inform people's stance and understanding of the situation we are now in like a feedback loop. The fact that no one is articulating possible paths forward, or even "dream" scenarios worries me. Without a bit of future vision to cross check the present with, I think we could end up doing ourselves down.

No, its not a dynamic process at all at present.

We can't latch onto anything without deciding the pillars of what that will revolve around.

Thing is all this depends on us being able to lend us cash and, at the moment, we are being downgraded by Moody's and standard&poor so we'll be lucky if we get handed a few tenners and an old spanner.
However, if there was some influx of cash, wouldn't it be great to massively invest in renewable green energy and technology to lessen our exposure to foreign oil? It would need to be massive and groundbreaking and it's probably a shit idea, I'm just trying to be a bit more positive today.

Us- I mean, them.

Sorry

Interest on UK bonds is very low at present. Could we not lend to ourselves?

Corbyn has just summed up the situation in a pretty good way in the house of commons by saying the UK is in a state of paralysis.

The fact that no one is articulating possible paths forward, or even "dream" scenarios worries me.

People are articulating scenarios, but with almost no exceptions, they look problematic. The concrete suggestions so far seem to be

• let's have our cake AND eat it by Boris
• let's stay in the EU, by the Lib Dems
• let's be Norway, by various people including those leave campaigners like Daniel Hannan who have now admitted that immigration was just a red herring designed to pull in the xenophobic vote

I don't think I even need to point out that all of those solutions face enormous political obstacles, though the last two have the merit of being achievable.

Right now, from a business perspective, perhaps the most constructive move would be for the government to come out and either invoke article 50 with no further ado, or to say that they don't intend to do it at all.

Agreed.

3. I don't have a view on this as I don't know enough about the nuclear power industry.

That's not a problem when shaping UK policy on the matter though. In fact I believe it's a requirement.

What about a referendum based on Mistigri's 3 suggestions above? They seem the realistic choices ....although that might split the leave vote....

I think you would have to restrict it to two choices, such as a straight choice between remaining and being in the EEA (with, presumably, the latter being presented as government policy).

Here's a positive, but very improbable, suggestion:

Implement proportional representation. Have a general election. Let our elected representatives in a coalition government come up with an acceptable compromise.

I think you'd need to engage the improbability drive from the Hitchhikers Guide to the Galaxy to achieve that one though ....

I think you would have to restrict it to two choices, such as a straight choice between remaining and being in the EEA (with, presumably, the latter being presented as government policy).

You can't do that though.

You can't say stay in the EU and not trigger a50

AND

Say we will have EEA when we can't negotigate that until we trigger a50.

catch 22.

Paralysis

Option 2: Is Brexit Cliff Jumping 2. Aka More of the same.
The public are likely to vote for it.