Monday, September 12, 2016

Surge in racist attacks since Brexit continues

There has been a surge in racist attacks and what police often refer to as hate crimes since the EU referendum which saw some 52% of those who voted opting to leave the European Union.

There are certainly some who would say the attacks are nothing to do with Brexit. Indeed this week Daniel Hannan, a Conservative MEP and a leading Leave campaigner, accused the media of "jumping on" cases of people who have been attacked or abused which had nothing to do with Brexit [Independent].

However, given the nature of some of the attacks and some of the language used by the perpetrators, it appears clear that at least some attacks have been committed by people emboldened by the Brexit vote and who feel the vote to leave the EU justifies their racial bigotry [Guardian].

'Hostile environment'

A month after the referendum the Prime Minister was accused of helping create the 'hostile environment' that paved the way for 'Fuck off to Poland' messages, excrement being posted through letter boxes, and racist abuse from children as young as ten.

The Independent newspaper reported that there were some 500 racist incidents compiled in a database in just four weeks following the EU referendum [Independent].

There were even comparisons made with 1930s Nazi Germany as a crowd strode through a London street chanting, "First we'll get the Poles out, then the gays!"

Only one day after the result was announced there were calls to radio stations by victims of racist abuse [Independent]. And over the weekend a man was photographed wearing a T-shirt emblazoned with the message "Yes, we won! Now send them back".

While he was later dismissed as a lone 'nutter' and an 'idiot', even by his family, the image of such an individual strolling through an east-London street appeared to epitomise the feeling of a significant minority [Mirror / Sun]. 

Spike in hate crime

Several police forces reported a spike in hate crimes in the week after the vote. But whilst the reporting of such incidents faded from the news the attacks have continued.

While racists have targeted a wide range of groups, Poles in particular have been singled out. Racist graffiti was found on the front entrance of the Polish Social and Cultural Association (POSK) in Hammersmith, west London, on the Sunday after the referendum. Meanwhile former Conservative chairwoman Baroness Warsi told Sky News that race hate crime organisations had reported some "disturbing early results" and blamed the "divisive and xenophobic" Leave campaigning during the EU referendum [Sky News].


While politicians on both sides of the House condemned the attacks, they continued unabated. Then on 27th August, almost exactly 2 months after the Brexit vote, 40-year-old Arkadiusz Jóźwik died after he was beaten by teenagers in Harlow, about 30 miles north of London. Even in the days that followed other Poles were attacked in the area, and there have been reports of further incidents across Britain.

Speaking at a silent vigil a week later the newly appointed Polish Ambassador to the UK, Arkady Rzegocki, spoke of a disturbing rise of hate crimes directed to the Polish community and called for peace and solidarity between the British and Polish communities.

The local MP Robert Halfon said he believed that "the vast majority of people who voted to leave the EU, did so for noble reasons" and that the attacks on the Polish community were committed "by a minority who come from the sewers, who want to exploit division and have their own racist agenda."

Attacks "on a daily basis"

However, Eric Hind, one of the organisers behind a silent march and vigil, said Poles had been quiet for too long.

"Brexit kind of gave the British people a kind of green light to be racist. My family and friends have all been abused. It happens on a daily basis," he told the Guardian newspaper. "We have kept our mouths closed too long. ... This time it is the Polish people, but it could be Muslims, it could be any different group. We need to fight racism everywhere, every day."

At a public meeting in the town some said were were seriously thinking of leaving the town and even Britain because of the rise in racism [BBC].

Mira Gustmajdzimski, who was at the meeting, said Polish people no longer felt part of the community in Harlow, and "many people were scared to come to this meeting".

Albanian Mimoza Matoshi, who works for Integration Support Services in Harlow, said there had been a dramatic rise in racist attacks since Brexit and that some Polish people were considering leaving the town.

Miroslawa Majdzinska from Poland said she had been repeatedly targeted in racist incidents. "Many people were abused, my friends were told not to speak the Polish language at work, kids are not allowed to speak Polish in school," she said.

On Friday [9th September] Prime Minister Theresa May expressed her "deep regret" over attacks on Polish citizens living in the UK and told the Polish PM Beata Szydlo that "hate crime has no place in UK society".

Such words will mean little to the family of Arkadiusz Jóźwik, or the growing number of victims of racial hatred.

Divisive campaign

The Leave campaign and particularly that run by UKIP has been criticised for focusing heavily on immigration and scapegoated European migrants for many of Britain's social problems. Towards the close of the campaign, UKIP leader Nigel Farage was widely criticised for unveiling a poster with pictures of Syrian refugees alongside the caption the "breaking point".

Following the vote it seemed clear that there was some correlation between those areas leaning towards Brexit and a rise in racist attacks. Many areas that voted strongly for Leave posted even higher increases, police figures obtained by The Independent showed.

While some will dispute any connection between Brexit and a rise in hate crime statistics and the feelings amongst migrants appears to indicate otherwise. What is not so clear is whether the heat will gradually dissipate.

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Saturday, September 10, 2016

Hard Brexit likely if there's no U-turn

The UK is likely heading for a so-called hard Brexit if a U-turn isn't made. And while a U-turn may seem unlikely given it would prove to be political suicide and cause 'outrage' amongst those who voted for Brexit, it would be the least destructrive course, economically, for the country.

Mixed messages and confusion

The possibility still exists that Brexit may not happen at all. Wishful thinking, many Brexiteers may say. However, there are already strong divisions growing in parliament and even amongst Tory ranks [Guardian].

There are mixed messages coming from May's own cabinet. David Davis's claim that staying a part of the single market would be "improbable" was quickly slapped down as being "his own view" and "not government policy" by Downing Street [Bloomberg].

Frosty reception at G20

Returning from her first G20 summit - where May received a less than enthusiastic welcome from Japan, the US and China in the wake of the Brexit vote - the new PM continued to insist that Brexit meant Brexit. However demands for what the government plans were concerning this she retorted that she would not give a "running commentary" on developments.

This has in the minds of some reinforced the opinion that some two months since the vote the new May government is just as clueless and still without a plan as to how they might deliver Brexit, let alone "make a success of it"

No clear plan

There are some politicians and many lawyers who say that the European Communities Act 1972 has to be repealed even before Article 50 is invoked [Independent]. This could also pave the way for an erosion of workers' rights [Labourlist]. The issue surrounding the European Communities Act 1972 will be decided in a High Court hearing later this year and it be judged to be the case that a repeal is necessary, parliament may be forced to vote on the matter. This in itself could at the very least see a delay in May being allowed to legally invoke Article 50 unilaterally. And given the workings of parliament, and the possibility the House of Lords could also slow down procedure, that delay could be anything up to a year.

Even with Article 50 invoked and Britain's negotiating position put before EU negotiators, there then remains a long waiting game which could drag on for two years. The mulling over of Britain's position indeed could be just sat on until that two year deadline expires before being handed back with a rejection and an offer on what the EU will accept. This might leave Britain with little choice as to either accept the offer or go for a so-called hard Brexit.

Hard Brexit

Aside of some hardline Brexiteers, few would want a hard Brexit. This is in essence a reversion to a WTO trading position in which the UK would be an independent country making its own trade deals. This to many Brexiteers sounds fine on the surface, but it would essentially mean Britain would have to renegotiate a trade deal with every country in the world and this could take years [FT].

Known as World Trade Organisation access, under this model the UK would rely on its membership of the WTO for access to European markets and as a first step towards full-blown free trade agreements with other blocs and countries — including the EU.

But the process would not be an easy one. The UK would first have to detach itself from the EU and regularise its position within the WTO before it could sign its own trade agreements, including with the EU. As Roberto Azevêdo, the WTO's director-general, said recently, there is no precedent for a WTO member extricating itself from an economic union while inside the organisation [FT]. The process would not be easy and would likely take years before the UK's WTO position was settled, not least because all other member states would have to agree. And while the task might not be impossible it could take many years to agree the schedules during which time the UK's legal status as a trading nation will be undetermined, with all that implies for uncertainty and business decisions.

Damaged economy

Such a position would not only diminish Britain's position on the global stage when it comes to trade it could seriously affect the country's economic position. Confidence might already be lost and some companies may already have uprooted base to shift to mainland Europe. Such noises have already come from the Japanese and most recently Ryanair who feel Britain's position in Europe will be weakened by Brexit and labelled UK politicians 'headless chickens' [Sky News].

Forex trading has already diminished since the Brexit vote with reports in the FT saying that it was unlikely Britain could recoup. And passporting is likely to disappear too if the sounds coming from various parts of the EU are to be believed.  

Top Czech negotiator Tomas Prouza said in an interview last Wednesday that there was a very low chance for British financial institutions and other companies to keep unhindered access to the free-trade zone. The state secretary for EU affairs in Prague said the UK's current proposals for a post-Brexit agreement with the European Union were "completely unrealistic" adding that Britain must grant access to workers, contribute to the bloc's budget and submit to legislative oversight in order to keep single-market access.

Talking to CNN's Richard Quest this week Claudio Costamagna, the Chairman of Cassa Depositi e Prestiti (CDP), said Britain should not be allowed to keep its passporting rights in any form of Brexit. Like all members, each will be able to veto a Brexit deal if they are unhappy with the proposals put forward. And there is growing that the likes of the Czech republic, Poland and Hungary would do just that if the UK does not accept the so-called four freedoms, that being the free movement of goods, capital, services, and people. This was a "red line", especially for the Poles, Czechs, Hungarians, Prouza said

Growing hostility from Europe

Some of the EU's negotiators may also be hostile to Britain in other regards. The Express described the appointment of Guy Verhofstadt as one of three EU Brexit negotiators as a 'stitchup' given his pro-European stance [BBC / Deredactie].

To sum up, it all comes down to cherry picking, something the EU has wholeheartedly rejected. It sums up a growing hostility that has been growing in mainland Europe for many years.

As Michel Rocard, a member of the Socialist Party in France and served as prime minister under François Mitterrand from 1988 to 1991, wrote in a piece in Le Monde some two years ago, Britain had attempted to dumb down many aspects of the EU whilst the EU had continually bent-over backwards to accommodate Britain [Guardian].

Any weakening on this position would risk others within the EU thinking about their own referendum in an attempt to renegotiate their position. And it would also weaken Europe's hardline position on Switzerland which voted to limit the rights of freedom of movement of people following a referendum but which resulted in swift retaliation from Brussels.

While it might be read, by Brexiteers especially, that Brussels is essentially dictating the rules, the club - that being the European Union - has to have rules to work. One cannot have some members only following one set of rules while others are obliged to follow another set of rules.

Voices of optimism

There are those that say Britain will 'eventually' flourish after Brexit, though the time scale might well outlive many of those that voted for it. There are those with the opinion that the European idea is dead and Brexit is just the first domino to fall.

Far more likely is that, given Britain follows through with Brexit, its economy will flounder for decades to come while Europe strengthens without a partner that has impeded its development on so many levels.

The likes of Wetherspoon's Tim Martin dismiss such scaremongering and points to the fact that since the Brexit vote little has happened other than a drop in the value of the pound [Guardian]. However, what he fails to point out is that Britain has not yet left the EU.

Looking back to an Imperialist past

Many Brexiteers have insisted Britain can trade with the Europe outside the single market and should build trading relationships with former commonwealth countries.

These are Australia, New Zealand, Canada, Jamaica, Antigua and Barbuda, Belize, Papua New Guinea, St Christopher and Nevis, St Vincent and the Grenadines, Tuvalu, Barbados, Grenada, Solomon Islands, St Lucia and The Bahamas.

Remainers however point to the fact that Britain already trades with many of these countries albeit through agreements made through the EU. Furthermore despite a recent fanfare by some Brexiteers that Australia was willing to sign up to post-Brexit trade deals, there are also voices coming from Australia that somewhat dampens the mood.

News that the two countries would start scoping a deal made headlines in the UK, with suggestions the country could become awash with cheap Australian wine and beer. Politicians described it as a "win-win" for two historically aligned countries both looking for a "friendly face" [BBC / Telegraph].

But only days after returning from the G20 Australia's trade minister Steven Cobio said any special relationship with the UK was in the past. In addition Ciobo said Australia would prioritise talks with the EU and that no formal talks could happen until the UK had actually left the European Union [Independent

Even with any new trade deals it is hard to see how Britain might benefit. Commonwealth trade is worth an estimated nine per cent of British imports and exports according to UK government figures.

And while Australia's exports are significant in themselves, labour cost and transportation would likely make many such exports expensive for Britain, especially should WTO tariffs be applied [] .

Australia has seen a slowdown in its own economy. And with some 70% of Australia's economy being services based, it is a country much like the UK where manufacturing is of lesser importance. In particular financial services and healthcare were two of the leading contributors to growth in 2014 [UKgov].

'Europe needs us' mantra

Those in favour of Brexit have continually claimed that Europe needs the UK and would not cut its nose off to spite its face by forcing the UK out of the single market should it not sign up to the four freedoms.

But the "they need us more than we need them" argument simply does not reflect the facts.

The UK currently relies on the EU as a whole for a significant import/export drive. 45% of all UK exports go to the EU. Meanwhile 53% of Britain's imports into the UK came from other countries in the EU in 2015 but accounts for less than 16% of the EU's whole export trade [research briefings].

Building more walls

There is now talk that Europe might introduce visas for counties outside the 26 Schengen member signatories which would leave Britain even more isolated [Guardian / Independent / Telegraph].

And there is also talk of a UK funded Calais wall to keep out migrants [BBC]. This comes as at least one senior French minister said his country could ditch the Le Touquet agreement if Britain quits the EU which would force Britain to withdraw customs and immigration checks from France and could see a greater influx of people seeking to enter Britain with the risk that a Jungle style refugee encampment could spring up in Kent.

In the end it is down to the politicians, even if the British voter has expressed an opinion - albeit with a slim margin leaning towards Brexit.

But there appears to be no scenario, looking forward, that is without pain for Britain and its economy at least in the near to mid term [IIEA - PDF]

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Monday, September 05, 2016

Brexit challenges for UK as PM arrives at G20

Theresa May has insisted that she'll follow through with with a plan to extricate Britain from the EU under the banner of Brexit Means Brexit and that she'll make a success of it.

But despite the jargon and soundbites, the task may be a lot tougher than she, or even the most ardent Brexiteers had anticipated. And the challenges she faces are becoming all the more clear as she faced negative feedback from world leaders at the G20 in China.

No clear plan

Following her first cabinet meeting since the EU referendum May insisted there would be no re-entering the the EU by the back door, no second referendum and that she alone would make the decision to invoke Article 50 rather than putting it to a parliamentary vote.

But aside of the bold statements of intent, no clear plan was put forward and few clues as to what Britain's negotiating position would be.

Indeed, Britain's future is no less certain than it was the day after the EU referendum result was announced.

Economy 'strong'

Pro-Brexit supporters have drawn solace from positive economic news over the last month and suggested the fear mongering of the Remain camp was unfounded.

However, while the stock market has stabilized, the pound remains low against the dollar and euro, as well as many other currencies around the world.

Some have argued this is a good thing in that Britain's exports will prove to be cheaper and that British tourism will benefit. This is undoubtedly true. But it doesn't reveal the whole truth of the issue.

British tourism has benefited. But figures have yet to be revealed as to what extent any increase in tourism has resulted from a drop in the pound.

Weak Sterling

And while a low pound has most certainly increased some exports, this may well prove to be a double edged sword. Increased and disproportionate foreign purchases may drive up prices for the British consumer simply due to a supply and demand effect. There have already been reports that pork prices may increase after the Chinese took advantage of the weak pound and bought up huge stocks of Britain's pork supplies [Guardian].

Sterling's low value has also prompted an increase in property purchases by foreign buyers [BBC]. And some of the cream of Britain's manufacturing industry is also being snapped up by foreign companies. In the last week ARM, a leading chipset maker, was bought by the Japanese company Softbank [BBC / Guardian].

The Cambridge-based firm designs microchips used in most smartphones, including Apple's and Samsung's. ARM, which was founded in 1990, employs more than 3,000 people.

On the face of it, this might sound like good news. More foreign investment in UK based industry would not be a bad thing after all. However, as the new PM Theresa May touched down in Hangzhou for the G20, the Japanese have revealed that any UK based assets may likely move to continental Europe should the current status quo - specifically with relation free movement and open access to the free market.

Threats to trade

Japan had raised its concerns prior to the EU referendum, but in a clear and unambiguous document published by the Japanese government it stated that "Japanese businesses with their European headquarters in the UK may decide to transfer their head-office function to Continental Europe if EU laws cease to be applicable in the UK after its withdrawal." [BBC]

Japanese firms employ an estimated 140,000 workers in the UK, with Nomura bank, manufacturing giant Hitachi and carmakers Honda, Nissan and Toyota all having major bases in the country. It's not only a direct effect on these UK based operations. Any shift to continental Europe will have a knock-on effect for any businesses dealing directly and indirectly with these firms.

But it's not just the Japanese that have raised the stakes. President Obama has also reiterated his leaning towards a united Europe when it comes to trade rather than a detached Britain when it comes to trade.

There are those that consider Japan's 'threats' as somewhat fanciful [Guardian]. But Japan may be just the first of many shots fired across Britain's bow. And such shots may not be easy to ignore [Guardian].

Of course, Theresa May could call their bluff and continue forth with her plan to drag Britain out of the EU, curb immigration and block freedom of movement "whatever the cost", but those costs could be very high indeed.

Business losses

If Britain did lose these manufacturing bases it would likely be permanent. Even if there were a reversal of policy by May or any future government confidence in Britain may already be lost. In fact Britain has already lost some of its stand in its financial sector. The FT this week reported that London had lost its grip on Forex as the Chinese RMB strengthened and that it would be unlikely to recoup lost ground because of Brexit and the weakening pound [FT]. Others have already expressed the opinion that the pound will further diminish [FT].

Meanwhile the British government cannot possibly accede to Japan's demands if May's mantra that Brexit means Brexit is to mean anything. Yet the Japanese requests – set out in a 15-page memo – are likely to become the benchmark by which many countries with strong economic ties to the UK will judge the outcome of the talks. Thus she and her government will increasingly find itself between a rock and a hard place.

May has insisted that the UK can prosper outside the EU and become a "global leader in free trade". But from the rhetoric coming from the top economies it feels that they can do quite well without the UK and continue their relationship with the EU quite happily as Britain flounders.

US threats

While President Obama maintained that the US would still have a "special relationship" with Britain he reasserted his opinion, which he aired during the EU referendum debate, that the US would prioritise trade negotiations with the EU and Pacific nations over a UK deal [BBC].

Brexiteers will no doubt point to the fact that Obama is soon to leave office and that Britain will soon be dealing with a new US president. However, neither of the two contenders will be plain sailing for Brexit Britain. Trump leans towards a more protectionist and self-sufficient America while Clinton is more likely to follow in Obama's footsteps and strengthen trade deals with Europe through the much lauded TTIP and NAFTA.

TTIP talks have run into problems with Europe and there has been some talk that the US might try to kick Europe into action by attempting to seek stronger bilateral ties with the UK [Guardian].

No time scale

However, the UK cannot formally sign any trade deals with other countries or trading blocs until it has left the EU. This issue will also prove to be a headache for May. While DExEU, the Department to Exit the EU, may be conducting unofficial talks with the prospect of signing future trade deals, nothing can be signed until any Brexit negotiations are finalised.

And no-one is clear when that will be. Indeed no-one it seems is clear on anything when it comes to May's planned Brexit. And May is hardly clear about what she means with her Brexit means Brexit slogan [BBC]. Indeed it's more like some advertising slogan from a popular brand of baked beans - Beans Means Heinz. Indeed just as Heinz is known for its 57 varieties, Brexit could have any number of possible outcomes.

As Chris Patten points out in an article published in the Gulf News last week 'Brexit Means Brexit' could mean anything. "Imagine if someone told you, 'Breakfast means breakfast,' and then headed off to prepare your meal. You would have little idea what you were actually going to eat. A Northern Irish 'Ulster fry-up' — eggs, bacon, sausage, black pudding, potato and soda bread and a fried tomato — with a cup of tea? Coffee and a pastry? Depending on your circumstances and preferences, you would probably feel very differently about the various possibilities."

"The same goes for Brexit. Some are concerned primarily with stopping EU labour from entering the United Kingdom. Others are focused on maintaining access to the single market. But, unlike a breakfast, Britain can't just demand everything on the menu." [Gulf News].

And Europe has already made it clear that Britain cannot have an à la carte menu when deciding what it wants [Guardian]. And the block itself has also expressed it is also becoming impatient over the UK's prevarication and lack of clarity [BBC / Standard].

Tough times ahead

Prior to arriving in China for her fraught conversations with the G20 leaders, Theresa May said there would be "difficult times" ahead as she implemented Brexit [BBC / Guardian / Reuters].

This is clearly an understatement. With continuing protests seen in London this weekend, planned legal challenges, calls for a second Scottish referendum, concerns in Northern Ireland and Stormont as well as possible political fights in parliament, May will certainly see difficult times [Telegraph / BBC]. There are still many amongst the Remain camp that want to turn the boat around and have a second referendum, some citing UKIP's Nigel Farage who suggested that a 48/52% in favour of Remain would be unfinished business [Metro]. As discussions begin proper and plans emerge the Brexit fallout will undoubtedly make things all the more difficult for the May government especially if trade suffers adversely and some of the concerns raised by the Remain campaign become a reality.

As well as the economic, financial and political fallout, there is also the concern over the rise in racism and attacks that have increased significantly following the Brexit vote [Guardian]. While much of the media has shied away from drawing a direct connection between Brexit and such attacks it is clear that there is a significant number of racists that have been emboldened by the vote and taken to attacking foreigners both verbally and physically.

Rising racism

In Harlow a Polish man was attacked by a gang of young teenagers as he and a friend sat to eat a pizza on a bench in the town. Two days later he died from his injuries leaving the community in shock. A week on hundreds gathered to pay their respects while the Polish ambassador to the UK Arkady Rzegocki spoke of his concern over the rise in attacks against the Polish community since the Brexit vote [BBC / Independent].

Only hours after the vigil and a silent march through the town two more Polish men were attacked in the same town in what police say was a likely 'hate crime' [BBC / EssexLive].

Bleak outlook

From which ever way one looks at it Britain's future outside the EU looks very bleak indeed. The biggest tragedy of all perhaps is the fact that many of those who voted for Brexit will suffer the most as they lose their jobs, pay more tax, or lose even their pensions [Gulf News / Independent]. Currently there is seemingly a sense that many people are positive about Britain's post-Brexit future with one poll conducted by BBC Radio 5 Live showing 62% of some 1,032 people expressing this view. However, the poll also indicated a possible brain drain and a weakening workforce as 26% of those spoken to considering leaving the UK and moving elsewhere. Amongst 18-34 year olds the figure was even higher with some 43% considering emigration. There has already been one definite move as the V&A's director Martin Roth resigned and prepared to return to his native Germany, a decision fuelled by his disillusionment at the Brexit vote [Guardian / Deutsche Welle].  in an interview with German radio broadcaster Deutschlandfunk that "the time for nice exhibitions is over. The anti-European stance is growing daily here."

There will also be a growing disappointment amongst Leave supporters as all the lies are exposed and the growing realisation that many of the warnings from "project fear" become true. The voters were told that they would "get their country back". They may well not like what it turns out to be.

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