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The Brexit - impact on UK citizens - July 2016

Proposition: "Assuming it is implemented, Brexit will deliver net economic benefits, on average, to UK citizens within its first 5 years."

Overview of Poll Results by Christis G. Tombazos

Out of the 33 respondents, almost 88% either disagreed or strongly disagreed, about 6% agreed, and 6% declared uncertainty.

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Poll responses

Responses chart

Weighted Responses chart


Responses (34)


 

Peter Abelson

Disagree

8


 

Kym Anderson

Uncertain (neither agree nor disagree)

10

It depends heavily on what policies the UK changes and what trade and investment agreements it strikes with the EU27 and with other trading partners.


 

Garry Barrett

Strongly disagree

9


 

Harry Bloch

Disagree

7

London's role as an international financial centre will almost surely decline. Whether there will be any offsetting gains from a cheaper pound remains to be seen.


 

Jeff Borland

Disagree

7

At present many of the details of the exit are unknown, so it isn't possible to be too definite. However, outcomes that seem likely to result such as reductions in trade flows and the exit of some types of businesses from the UK to move to Continental Europe make it difficult to think that there would be net economic benefits (although of course there may be some winners in the UK).


 

David Butler

Agree

5

The risks are many, but as it is the new reality I prefer here to look for the positives it may offer. The pound will fall to make UK exports more competitive. Wealth inequality will diminish as the share market declines. Housing, particularly in London, will become more affordable as prices fall, a major issue in recent years. The U.K. will save many billions of pounds, net, each year from not paying into the EU budget, if they do not seek to stay in the single market.    The worst case scenario for UK exports without the single market is reliance on WTO rules for trade with the EU, not really a disaster. But given the major deficit the UK runs with the EU, it is likely a more advantageous arrangement will be reached, pushed by Germany and other net exporters to the UK.    Relief from anti-competitive EU rules will permit more market-based responses by the UK, both by producers and in government policy making. Already a reduction in company tax to 15% to forestall any company departures has been mooted, which the EU's tax harmonisation policy would not permit otherwise. Other competitive policy responses on taxation, regulation and elsewhere also will become possible. Food prices prices are expected to decline, without the constraints of the common agricultural policy, raising living standards for consumers. Much depends on the response of the 27 other EU countries. But as the UK is the 5th or 6th biggest world economy, any 'boycott' or sanctions for snubbing the 'club' would impose significant costs on the 'snubbers', not least Germany. Once the emotion of the present months dies down, I doubt such responses will prevail. The shape of new agreements are as yet unknown. Will the UK spearhead new trade alliances, without the political goals the EU has for its members? Might the UK, Switzerland, Canada, Singapore, Australia, NZ, Chile, South Korea for example form a rival, non-regional single market? Will the EU break up anyway due to the north-south tensions of the Eurozone? Will the EU become more statist and less competitive, in future?    I don't know, but I'm not particularly pessimistic for the UK economy 5+ years from now, relative to the rest of Europe.


 

Matthew Butlin

Uncertain (neither agree nor disagree)

5


 

Lisa Cameron

Disagree

7

Brexit is likely to have negative impacts on the UK economy because it will make doing business in Europe harder for UK residents, and vice-versa. The high level of uncertainty about how the exit will work and what it will mean in practice is also likely to dampen investment. There is also the possibility of further disruption if it leads to Scotland leaving the UK.


 

Fabrizio Carmignani

Strongly disagree

9

There is simply no valid economic argument (theoretical or empirical) to support this statement. Brexit advocates have produced some estimates based on highly simplistic (and somewhat unrealistic) post-Brexit scenarios and very generous assumptions on gains from reduced trade diversion and reduced contributions to EU budget. Instead, a more comprehensive, realistic, and theory-based analysis by the UK Treasury shows that Brexit will result in significant GDP losses in the long-term.


 

Bruce Chapman

Disagree

6


 

Deborah Cobb-Clark2

Disagree

7


 

Max Corden

Strongly disagree

9

The financial sector and housing sector in London will lose.


 

Lin Crase

Disagree

7


 

Kevin Davis

Strongly disagree

9


 

Brian Dollery

Agree

8


 

Uwe Dulleck

Strongly disagree

9

While I am uncertain about the effect on Europe, I am pretty convinced that leaving the EU is bad for the average UK citizen. Investment in the UK will drop as companies do not like to be exposed to two sets of regulation, I expect this to happen in manufacturing as well as in financial services. This has to be counteracted by changes/reductions in company taxation (as discussed already) to compensate. These will have direct adverse effects, some of them with ongoing effect as services, including health and education, provided decrease. All of this leads me to expect not only a recession in the short to medium term but also an ongoing loss in economic growth.


 

Mardi Dungey

Strongly disagree

10

The disruption caused by Brexit will outweigh any gain in the near or medium term. The longer term will depend on the outcome of the negotiations. The most likely outcome seems to be some form of 'Norway light' version of membership. In which case the intent to prove 'sovereignty' leaves the UK with no advantage over its prior situation. There seems to have been either little understanding or a misrepresentation of the costs and benefits of EU membership amongst important parts of the constituency. The demographics of the vote clearly reflect that the young understand that they will bear the majority of the cost of this decision in reduced opportunities.


 

Chris Edmond

Strongly disagree

9

There is no conceivable scenario under which any form of Brexit will deliver net economic benefits to UK citizens at any horizon, let alone within the next 5 years (when the pain of transition is likely to be most pronounced). Brexit negotiations may lead to harm mitigation (from the UK's point of view) but that's about the best that can be hoped for. And all of this is of course putting aside the within-UK political complexities (renewed push for Scottish independence, etc).


 

Saul Eslake

Strongly disagree

9


 

Gigi Foster

Disagree

4

The popular vote in favour of Brexit seems to have resulted mainly from fear amongst Britain's citizens that the free immigration flows into the country from the rest of Europe were having negative effects - such as increased competition for domestic jobs and increased risks of violence at home due to radical Muslim influences.  Britain's contributions towards propping up Greece and the other PIIGS may also have scored some influence. Whether and how these aspects of Britain's relation to the rest of Europe will change with Brexit depends entirely on the terms of that exit, which have yet to be negotiated. What we do know is that the markets seem to think that Brexit was a bad idea in the short run (the GBP fell), and that policy changes that make it more difficult for Britain to do business with the rest of the world, like increased tariffs on British goods shipped to other European countries, would be predicted to damage Britain in the medium and long run.


 

john freebairn

Disagree

7

In the short run, uncertainty, and the loss of confidence and of animal spirits reduce aggregate demand. Over medium term, likely additional restrictions on free trade and loss of mobility of inputs with likely negotiated separation to add to adjustment costs and reduce opportunities for trade.


 

Paul Frijters

Strongly disagree

9

In the short run, the UK economy can only lose from disrupting the many ties with the EU. I expect the financial service industry in London to be particularly hard hit as other EU financial centers will try and muscle into that market. You already see signs of a London housing market downturn reflecting the uncertainty in the city. The knock-on effects of Brexit on the EU economy will amplify that downturn. In the longer run though, the UK economy will adapt and probably become less dependent on London. It might even gain if it manages to get control over migration.


 

Stephen King

Strongly disagree

10

A variety of economic analysis leading up to the vote showed the negative economic effects of Brexit on UK citizens. The alternative analysis by 'leave' economists could only model an economic gain on unrealistic assumptions (eg. The UK leaves the EU and implements free trade agreements with a wide range of other countries outside Europe). Further the least costly Brexit alternative (the EFTA alternative as per Norway) would require free movement of people which is unlikely to be acceptable to the 'leave' voters in the UK.


 

Geoffrey Kingston

Disagree

6

Brexit will probably entail significant economic costs in the short run. Notably, multinational corporations, especially ones in financial services, will consider relocating their European headquarters from London to Frankfurt or Dublin. But the Brexit vote was about sovereignty rather than short-run economics. Moreover, if "economic benefits" are defined in per capita terms, Britain could benefit economically in the long run, especially if continental Europe fails to secure its borders.


 

Rodney Maddock

Disagree

7

Brexit will cause losses from disruption to trade with Britain's main trading partners in Europe. There are also likely to be very significant adjustment costs. With a resulting big devaluation of the pound economic growth might be higher, but the fall in the currency means that, by international measures, the value of production will be lower. The potential upside, from a recovery in national sentiment and possible emergence of new growth industries, is difficult to evaluate but not likely to reverse the picture within a five year window.


 

Tony Makin

Agree

6

Whether net benefits will occur within 5 years for UK citizens is uncertain, but there are great opportunities long term for UK trade and investment with many other economies in the more dynamic Asia-Pacific region and the Americas. Trade and investment opportunities with Europe will still remain strong post-Brexit as these would be safeguarded by WTO rules.


 

Warwick McKibbin

Strongly disagree

9


 

Flavio Menezes

Disagree

7

The answer  depends on the terms upon which the exit will take place. However, it is reasonable to assume that the EU will attempt to make the cost as high as possible to dissuade others from leaving. Thus, it is likely that while a few sectors may benefit from a weaker pound, many sectors will find it harder to access EU markets.  Under a number of assumptions, the OECD estimated that the UK GDP would be over 3% smaller than with continued EU membership by 2020.


 

James Morley

Disagree

7


 

Margaret Nowak

Strongly disagree

10


 

John Piggott

Disagree

6

A great deal depends on the terms of the exit, which have not been negotiated. There is no precedent for such a negotiation. But within 5 years of the conclusion of those negotiations, the real disadvantages of this separation, both for the UK and rest of Europe, in terms of trade flows and factor movements, will begin to become apparent. The UK may in fact be diminished by Scotland's separating.


 

John Quiggin

Strongly disagree

8

A loss of income in the medium term is virtually inevitable, because of adjustment costs. The financial sector will contract, which is desirable in the long run but can cause plenty of short term problems. Whether the adjustment cost is large or small depends on how this process is managed.


 

Rana Roy

Strongly disagree

10

Posting as I am from the great cosmopolis of London with nary a Brexiter in sight – and desirous as I am of preserving my equanimity in order to enjoy my summer in London – I shall refrain from all further comment.


 

Hugh Sibly

Disagree

7

One might expect Brexit to give the UK more policy flexibility, which could be  beneficial to the UK economy. Reduced access to EU market is likely be detrimental to the UK economy. It is hard to predict the overall impact of these two countervailing effects. However it seems unlikely that Brexit will deliver large benefits in the next 5 years. Furthermore, if Brexit increases political uncertainty (for example around new moves for Scottish independence), this could be an additional source of damage the UK economy.