The Tentacle

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Breakin’ Up is Hard to Do

TEn Director, James Sharp, shares his opinion on Brexit

Originally published in Insurance Age 8/11/18

Breakin’ Up is Hard to Do

The immortal words of Neil Sedaka have, perhaps, never achieved the same level of fiscal poignancy as now they do, thanks to Brexit. A messy divorce might be similar I suppose.

So, what can we glean from this? That the lessons of a broken marriage on subsequent relationships should recommend the romantic equivalent of a Trade Deal, rather than returning anon to the path of an ever-closer union.

Curiously not. Most people who separate will marry again within 5-10 years, whilst the notion of an alternative monetary arrangement is generally frowned upon in polite society.

Short term, Brexit could result in a radical down-sizing of our bijou suburban home and the sacrifice of one of a pair of nice German cars. Equally, it may stimulate the creative juices, engender a new age of entrepreneurial activity and, eventually, reward us with a younger model of domestic manufacture.

Nevertheless, we should be careful what we wish for.

An amicable settlement with our former partner(s) may head-off the worst consequences of storming-out and slamming doors. On the other hand, a ‘softer’ approach involving continued co-habitation, whilst leading separate lives, has its own drawbacks.

It is a choice that could keep us in a state of perpetual limbo, never quite achieving the closure that half the population craves. Oh dear, what can we do?

From an Insurance industry perspective, post Brexit we will lose the convenience of regulatory passporting. We shall wave goodbye as a slice of the London Market de-camps to Belgium, whilst retaining on-shore the EU directives that have so enraged our tabloid editorials. Green Cards will make a comeback and Travel Insurance to Europe should become a load more expensive.

Happily, none of this really matters, unless you are the poor Lloyds broker cruelly separated from the watering holes of Leadenhall Market. In a year or two, most of the above will be absorbed, subverted, automated or forgotten; and Balls Bros could open in Brussels.

Unfortunately, these are not the real concerns; It’s the Economy, Stupid.

If a hard Brexit causes a localised UK recession, job losses by the tens of thousands, a shortage of medicine and HGV queues stretching back to Canterbury, then, undeniably, it will have been a bad idea. If no serious consequences ensue, or they are quickly resolved, then it was all a lot of fuss over nothing. Case proved - definitively - either way.

Personally, I am expecting the former, but will gladly embrace the latter if that is what happens. Even as an ardent Remainer, I am tempted to see what comes from the worst-case scenario of an exit without agreement. The consequences may be dire, but I see no way of settling the argument and regaining a national consensus, until the outcome is demonstrably a complete disaster.

Admittedly, believing what I do, this is not a very responsible attitude. However, I have cast my vote and, alas, I was not ascendant. By contrast, in 1975, I was one of the 67% pro-European majority and, who knows, I may be again one day. That said, I am not an advocate of another vote pre-Decree Absolute, followed by a period of trial separation; much as I wish it otherwise.

Notwithstanding this, for reasons of passing time and changing tides, we must be mindful of the kids. 2016 saw 71% of sub 25-year-olds and 54% of those aged below 50 voting Remain. Conversely, 60% of the electorate over 50 and 65% of those above 65, chose Brexit. Overall, the result was a 1.37m majority to Leave, a differential of about 4%, compared with 34% in 1975.   Ominously for Brexiteers, given the annual passing of circa 600,000 UK souls and the in-built elderly bias thereof, for how much longer can the departure favouring predominance of the soon to be departed prevail? Not very long. It’s simple arithmetic.

And, of course, most people who separate do remarry within 5-10 years.

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