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NOVEMBER 2019 STATEMENT

Brexit – the British exit from EU- started to playout in June 2016 when the UK decided to leave its 40 years of Membership in the EU.

EU-European Union is the union of 38 countries that allows them to have free trade and travel – realising the dream of one big Europe.

Brexit – The Story

It all started in 2015 when David Cameron started his pessimistic political campaign strategy calling for a referendum to leave the EU under pressure from the Euro-sceptic back-benchers and in the fear of losing to the UKIP.

But Cameron was expecting the referendum plan to fail, and in its failure silencing Ben Johnson and Nigel Farage. Cameron was very much the proponent of Britain staying in the bloc. He even started what people called the ‘Project Fear’ alarming the British of the distressing consequences of Brexit. Distrust, distress and dismal resulted in Cameron stepping down from the seat.

Then came Theresa May! Unfortunately, her short stay in power was overshadowed by Brexit. May tried to have a moderate approach to delivering Brexit. However, she too failed to execute a plan that all parties agreed on, and her moderately-designed treaty suffered a huge defeat. According to the US Newspaper, “The Tory backbenches loathed it. The Democratic Unionists hated it. The opposition Labour Party opposed it.”

After May’s departure in March 2019, came Ben Johnson with a promise to exit the EU by 31st October. With an aggressive ‘do or die’ approach, he tried to get his way by installing more Brexiteers in the cabinet and limiting the power of MPs. But he was stalled by the Supreme Court for going against legislation. With the deadline already passed, we still have to see how Brexit plays out for the UK.

Brexit – The Debate

There are a lot of speculations but one knows how Brexit will play out, what will be the impact within the UK and across the globe. Trade, travel, investments, immigration, and security will be impacted by Brexit.

The debate between those favouring Brexit and those opposing it is still playing in the background, as we are all wondering to see what really happens and what are the consequences.

Cost

Anti-Brexiteers: The UK enjoys free trade and free travel under the EU, the impact and benefits of those should be counted in before calculating numbers!

Brexiteers: In 2016, the UK paid above 13bn pounds for the EU registration fee, that cost would be directly saved.

Trade

Anti-Brexiteers: The UK will lose the advantage of free trade and won’t have much say in determining the terms of trade.

Brexiteers: We will define our own terms for trade. Brexit will be beneficial to small and medium industries of the UK who have suffered because of EU trade rules over the years.

Sovereignty

Anti-Brexiteers: With the EU, the voice of the UK is amplified on the global front. In 21st-century, it will reduce the status as a global power. With the Nato, the UN and the WTO still there to constraint British sovereignty, leaving Brexit will just reduce the influence that the UK has.

Brexiteers: The EU institutions channel power from the British Parliament. Leaving would mean more power and more independence for the UK. The British will make and operate under their own rules.

Immigration

Anti-Brexiteers: The effect of people coming from Eastern and Western Europe has been positive so far.

Brexiteers: The UK should regain its national sovereignty and should get more control of its borders. By allowing free entry, we lose control and cannot check everyone.

Employment

Anti-Brexiteers: We will lose the ‘Brightest’ minds that come from the world to the world in the UK. Low competition may result in no skills development in the British.

Brexiteers: Fewer immigrants more jobs, less competition, and better wages. Interestingly, while investments have gone down since the referendum, the job rate in the UK is as high as it was.

Security

Anti-Brexiteers: The EU has strengthened the security of the UK. It also makes it possible to share criminal records across the borders that have a positive impact on countering terrorism.

Brexiteers: Open borders have reduced our check and control on intruders and terrorists. The UK can gain more control over its borders and strengthen the security of the country with better rules.

Brexit – The Solution

At this point, I don’t think there is the question of leaving or remaining in the EU. Brexit has been dictating the political landscape of the UK for the last three years.

The question is not:

Whether the UK should leave or remain in the EU?

The question is:

How will the UK exit?

And most importantly:

When will the UK Brexit?

While we don’t know about When let’s talk about How… To be honest How is also just speculations at the moment.

There can be either a No Deal, A Soft Brexit or A Hard Brexit.

NO DEAL HARD BREXIT SOFT BREXIT
Meaning: Emergency exit Cut all ties with the EU, make own rules Abide by some of the rules of the EU, get some independence
Impact on Common Britain: Unknown A local business will flourish, more jobs. A local business will suffer as the competitive market will stay the same.
Impact on Global Companies: Unknown More expenses, tariffs, and taxes for global companies. Same travel and trade advantages as under the EU single market.
Impact on Immigration: Unknown Not a lot, there will be a settlement agreement.

No free-flying, but no big issues for immigrants.

No hard borders required, some minimal changes may occur.
Interaction with the EU Unknown Cut ties with the EU single market, custom rules and court of justice. Stays with some institutions of the EU.
Challenges: It can be the worst-case as the exit will be executed with no terms decided.

It seems likely to happen as the parties in the UK don’t seem to agree on anything.

The EU may not fully agree.

Opposition from Labour parties and a minority of conservatives.

Opposition by everyone wanting a full exit.

Would create distrust and chaos among people waiting for Brexit.

David Cameron conducted the referendum – Theresa May failed to deliver Brexit – and the clock is ticking on Boris Johnson’s promise for October 2019.

Brexit has clearly overshadowed the political panorama of the UK. The world is watching every step of the UK and waiting for the inevitable exit to happen after all.

Till next month,

I remain truly yours,

Tonny Rutakirwa,

Chairman,

Tonniez Group Holdings,

Serving since 28th December 2008.

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