What does Brexit mean for us?

exit from the eurozone: golden star fallen from a blue wall

After the decisive vote by the UK in favour of leaving the EU what impact will this have on businesses in Dartmouth?

Clearly the weakness of the pound will make UK holidays cheaper for foreign travellers coming to Britain so there could be an upside there with increased visitor numbers to Dartmouth. Of course it will also be more expensive to take overseas holidays for us Brits so that may also stimulate the trend for stacation holidays. That would also be good for us.

The downside will be the increased cost of imports including fuel such as oil and gas. This will have a knock on effect on the costs of all the goods that are transported within the UK.  However the volatility we have seen in the financial markets has a habit of stabilising fairly quickly. The FTSE rose by 150 points by the end of trading yesterday so there are already signs that the markets feel that the impact on our economy may not be as bad as the merchants of doom predict.  The problem is that the negative predictions coming out of the In camp can have a self fulfilling effect by depressing confidence in the economy of the country. So the key now is to get behind the decision we have taken and make it the right decision for us all.

What the country needs now is a strong team committed to delivering the democratic will of the people of Great Britain. They will need political skills, negotiating skills, a strong commitment to achieve the best for us in the face of loud opposition from the minority, and strong leadership. Strange but that sounds familiar for some reason which I cant quite recall!!!

After two days of panic leading shares have regained a little of the lost ground. Joshua Mahony, market analyst at IG, said:

“Today has seen a welcome reprieve from the incessant fear and risk aversion that has dominated financial markets since Friday’s unexpected referendum result. The question on everyone’s lips is whether we have seen an end to the selling, with many seeing current prices as an opportunity to buy their favourite firms at a temporary discount. [But] this selloff is unlikely to be over and perhaps the only thing that will truly raise risk appetite for good will be a faint glimmer of hope that we could see a second referendum.

Despite the binary nature of Friday’s referendum result, far from providing a definitive answer to the markets, we now find ourselves in the eye of a political and economic storm. We have moved from a position of security and stability, to one where we do not even know who will lead the two main political parties in a year’s time. David Cameron may have said that there is no way to go back on the referendum result, but Jeremy Hunt’s suggestion that he would hold a second referendum reminds us that crucially the decision is no longer Cameron’s to make.”

 

Secretary of State John Kerry was in both Brussels and London yesterday. Did he shed any new light on the American perspective?

He didn’t bring any new initiatives with him, but he did offer general reassurance of solidarity. He quoted Winston Churchill about facing challenges together, and he said Britain’s place in the world would not be diminished by leaving the EU — it would only be different.

 

The BBC has published the following answers to some of the most pressing questions and I publish them here with full acknowledgement of their source the BBC.

How will pensions, savings, investments and mortgages be affected?

During the referendum campaign, the prime minister said the so-called “triple lock” for state pensions would be threatened by a UK exit. This is the agreement by which pensions increase by at least the level of earnings, inflation or 2.5% every year – whichever is the highest.

If economic performance deteriorates, the Bank of England could decide on a further programme of quantitative easing, as an alternative to cutting interest rates, which would lower bond yields and with them annuity rates. So anyone taking out a pension annuity could get less income for their money.

The Bank of England may consider raising interest rates to combat extra pressure on inflation. That would make mortgages and loans more expensive to repay but would be good news for savers.

The Treasury previously forecast a rise of between 0.7% and 1.1% in mortgage borrowing costs, with the prime minister claiming the average cost of a mortgage could increase by up to £1,000 a year.

The Treasury argued during the referendum campaign that UK shares would become less attractive to foreign investors in the event of Brexit and would therefore decline in value, but in the longer term shares typically rise with company profits. Big exporters might benefit from the weaker pound, so the value of their shares might well rise, while importers might see profits squeezed.

A duty free shopImage copyrightTHINKSTOCK

Will duty-free sales on Europe journeys return?

Journalists and writers on social media have greeted the reintroduction of duty-free sales as an “upside” or “silver lining” of Brexit.

As with most Brexit consequences, whether this will happen depends on how negotiations with the EU play out – whether the “customs union” agreement between Britain and the EU is ended or continued.

Eurotunnel boss Jacques Gounon said last November the reintroduction of duty-free would be “an incredible boost for my business” but he later said that remark had been “light-hearted”.

Erik Juul-Mortensen, president of the Tax Free World Association (TFWA) said after the referendum vote “it is not possible to predict how Brexit will affect the duty free and travel retail industry, and it is wiser not to make assumptions about exactly what the impact will be.”

Will our EHIC cards still be valid?

No-one knows for definite. The EHIC card – which entitles travellers to state-provided medical help for any condition or injury that requires urgent treatment, in any other country within the EU, as well as several non-EU countries – is not an EU initiative. It was negotiated between countries within a group known as the European Economic Area, often simply referred to as the single market (plus Switzerland, which confusingly is not a member of the EEA, but has agreed access to the single market). Therefore, the future of Britons’ EHIC cover could depend on whether the UK decided to sever ties with the EEA.

Will cars need new number plates?

Probably not, says BBC Europe correspondent Chris Morris, because there’s no EU-wide law on vehicle registration or car number places, and the EU flag symbol is a voluntary identifier and not compulsory. The DVLA says there has been no discussion about what would happen to plates with the flag if the UK voted to leave.

Could MPs block an EU exit?

Could the necessary legislation pass the Commons, given that a lot of MPs – all SNP and Lib Dems, nearly all Labour and many Conservatives – were in favour of staying?

The referendum result is not legally binding – Parliament still has to pass the laws that will get Britain out of the 28 nation bloc, starting with the repeal of the 1972 European Communities Act.

The withdrawal agreement also has to be ratified by Parliament – the House of Lords and/or the Commons could vote against ratification, according to a House of Commons library report.

In practice, Conservative MPs who voted to remain in the EU would be whipped to vote with the government. Any who defied the whip would have to face the wrath of voters at the next general election.

One scenario that could see the referendum result overturned, is if MPs forced a general election and a party campaigned on a promise to keep Britain in the EU, got elected and then claimed that the election mandate topped the referendum one.

Two-thirds of MPs would have to vote for a general election to be held before the next scheduled one in 2020.

Will leaving the EU mean we don’t have to abide by the European Court of Human Rights?

The European Court of Human Rights (ECHR) in Strasbourg is not a European Union institution.

It was set up by the Council of Europe, which has 47 members including Russia and Ukraine. So quitting the EU will not exempt the UK from its decisions.

However, the UK government is committed to repealing the Human Rights Act which requires UK courts to treat the ECHR as setting legal precedents for the UK, in favour of a British Bill of Rights.

As part of that, David Cameron is expected to announce measures that will boost the powers of courts in England and Wales to over-rule judgements handed down by the ECHR.

However, the EU has its own European Court of Justice, whose decisions are binding on EU institutions and member states.

Its rulings have sometimes caused controversy in Britain and supporters of a Brexit have called for immediate legislation to curb its powers.

Will the UK be able to rejoin the EU in the future?

BBC Europe editor Katya Adler says the UK would have to start from scratch with no rebate, and enter accession talks with the EU.

Every member state would have to agree to the UK re-joining. But she says with elections looming elsewhere in Europe, other leaders might not be generous towards any UK demands.

New members are required to adopt the euro as their currency, once they meet the relevant criteria, although the UK could try to negotiate an opt-out.

Who wanted the UK to leave the EU?

The UK Independence Party, which won the last European elections, and received nearly four million votes – 13% of those cast – in May’s general election, campaigned for Britain’s exit from the EU.

About half of Conservative MPs, including five cabinet ministers, several Labour MPs and the DUP were also in favour of leaving.

What were their reasons for wanting the UK to leave?

They said Britain was being held back by the EU, which they said imposed too many rules on business and charged billions of pounds a year in membership fees for little in return. They also wanted Britain to take back full control of its borders and reduce the number of people coming here to live and/or work.

One of the main principles of EU membership is “free movement”, which means you don’t need to get a visa to go and live in another EU country. The Leave campaign also objected to the idea of “ever closer union” and what they see as moves towards the creation of a “United States of Europe”.

Who wanted the UK to stay in the EU?

Prime Minister David Cameron wanted Britain to stay in the EU. He sought an agreement with other European Union leaders to change the terms of Britain’s membership.

David Cameron outside 10 Downing StreetImage copyrightAFP/GETTY

He said the deal would give Britain “special” status and help sort out some of the things British people said they didn’t like about the EU, like high levels of immigration – but critics said the deal would make little difference.

Read more: What Cameron wanted v what he got

Sixteen members of the PM’s cabinet also backed staying in. The Conservative Party pledged to be neutral in the campaign – but the Labour Party, SNP, Plaid Cymru and the Lib Dems were all in favour of staying in.

US president Barack Obama also wanted Britain to remain in the EU, as did other EU nations such as France and Germany.

What were their reasons for wanting the UK to stay?

Those campaigning for Britain to stay in the EU said it gets a big boost from membership – it makes selling things to other EU countries easier and, they argued, the flow of immigrants, most of whom are young and keen to work, fuels economic growth and helps pay for public services.

They also said Britain’s status in the world would be damaged by leaving and that we are more secure as part of the 28 nation club, rather than going it alone.

What about businesses?

Big business – with a few exceptions – tended to be in favour of Britain staying in the EU because it makes it easier for them to move money, people and products around the world.

BT chairman Sir Mike Rake, a recent CBI president, said there were “no credible alternatives” to staying in the EU. But others disagreed, such as Lord Bamford, chairman of JCB, who said an EU exit would allow the UK to negotiate trade deals as our country “rather than being one of 28 nations”.

Morgan Stanley sources told BBC business reporter Joe Lynam that it had started the process of moving about 2,000 staff based in London to either Dublin or Frankfurt. Ahead of the vote, the president of the investment bank, Colm Kelleher, told Bloomsberg that Brexit would be “the most consequential thing that we’ve ever seen since the war”.

Boris Johnson speaking after the UK voted to leave the EUImage copyrightREUTERS
Boris Johnson was one of the most prominent Leave campaigners

Who led the rival sides in the campaign?

  • Britain Stronger in Europe – the main cross-party group campaigning for Britain to remain in the EU was headed by former Marks and Spencer chairman Lord Rose. It was backed by key figures from the Conservative Party, including Prime Minister David Cameron and Chancellor George Osborne, most Labour MPs, including party leader Jeremy Corbyn and Alan Johnson, who ran the Labour In for Britain campaign, the Lib Dems, Plaid Cymru, the Alliance party and the SDLP in Northern Ireland, and the Green Party. Who funded the campaign: Britain Stronger in Europe raised £6.88m, boosted by two donations totalling £2.3m from the supermarket magnate and Labour peer Lord Sainsbury. Other prominent Remain donors included hedge fund manager David Harding (£750,000), businessman and Travelex founder Lloyd Dorfman (£500,000) and the Tower Limited Partnership (£500,000). Read a Who’s Who guide. Who else campaigned to remain: The SNP ran its own remain campaign in Scotland as it did not want to share a platform with the Conservatives. Several smaller groups also registered to campaign.
  • Vote Leave – A cross-party campaign that has the backing of senior Conservatives such as Michael Gove and Boris Johnson plus a handful of Labour MPs, including Gisela Stuart and Graham Stringer, and UKIP’s Douglas Carswell and Suzanne Evans, and the DUP in Northern Ireland. Former Tory chancellor Lord Lawson and SDP founder Lord Owen were also involved. It had a string of affiliated groups such as Farmers for Britain, Muslims for Britain and Out and Proud, a gay anti-EU group, aimed at building support in different communities. Who funded the campaign: Vote Leave raised £2.78m. Its largest supporter was businessman Patrick Barbour, who gave £500,000. Former Conservative Party treasurer Peter Cruddas gave a £350,000 donation and construction mogul Terence Adams handed over £300,000. Who else campaigned to leave: UKIP leader Nigel Farage is not part of Vote Leave. His party ran its own campaign. The Trade Union and Socialist Coalition is also running its own out campaign. Several smaller groups also registered to campaign.

Will the EU still use English?

Yes, says BBC Europe editor Katya Adler. There will still be 27 other EU states in the bloc, and others wanting to join in the future, and the common language tends to be English – “much to France’s chagrin”, she says.

Will a Brexit harm product safety?

Probably not, is the answer. It would depend on whether or not the UK decided to get rid of current safety standards. Even if that happened any company wanting to export to the EU would have to comply with its safety rules, and it’s hard to imagine a company would want to produce two batches of the same products.

Thanks for sending in your questions. Here are a selection of them, and our answers:

Which MPs were for staying and which for leaving?

The good news for Edward, from Cambridge, who asked this question, is we have been working on exactly such a list. Click here for the latest version.

How much does the UK contribute to the EU and how much do we get in return?

In answer to this query from Nancy from Hornchurch – the UK is one of 10 member states who pay more into the EU budget than they get out, only France and Germany contribute more. In 2014/15, Poland was the largest beneficiary, followed by Hungary and Greece.

Brexit and EU signsImage copyrightTHINKSTOCK
The UK is one of 10 member states who pay more into the EU budget than they get out

The UK also gets an annual rebate that was negotiated by Margaret Thatcher and money back, in the form of regional development grants and payments to farmers, which added up to £4.6bn in 2014/15. According to the latest Treasury figures, the UK’s net contribution for 2014/15 was £8.8bn – nearly double what it was in 2009/10.

The National Audit Office, using a different formula which takes into account EU money paid directly to private sector companies and universities to fund research, and measured over the EU’s financial year, shows the UK’s net contribution for 2014 was £5.7bn. Read more number crunching from Reality Check.

If I retire to Spain or another EU country will my healthcare costs still be covered?

David, from East Sussex, is worried about what will happen to his retirement plans. This is one of those issues where it is not possible to say definitively what would happen. At the moment, the large British expat community in Spain gets free access to Spanish GPs and their hospital treatment is paid for by the NHS. After they become permanent residents Spain pays for their hospital treatment. Similar arrangements are in place with other EU countries.

If Britain remains in the single market, or the European Economic Area as it is known, it might be able to continue with this arrangement, according to a House of Commons library research note. If Britain has to negotiate trade deals with individual member states, it may opt to continue paying for expats’ healthcare through the NHS or decide that they would have to cover their own costs if they continue to live abroad, if the country where they live declines to do so.

What will happen to protected species?

Dee, from Launceston, wanted to know what would happen to EU laws covering protected species such as bats in the event of Britain leaving the EU. The answer is that they would remain in place, initially at least. After the Leave vote, the government will probably review all EU-derived laws in the two years leading up to the official exit date to see which ones to keep or scrap.

The status of Special Areas of Conservation and Special Protection Areas, which are designated by the EU, would be reviewed to see what alternative protections could be applied. The same process would apply to European Protected Species legislation, which relate to bats and their habitats.

The government would want to avoid a legislative vacuum caused by the repeal of EU laws before new UK laws are in place – it would also continue to abide by other international agreements covering environmental protection.

How much money will the UK save through changes to migrant child benefits and welfare payments?

Martin, from Poole, in Dorset, wanted to know what taxpayers are likely to get back from the benefit curbs negotiated by David Cameron in Brussels. We don’t exactly know because the details have not been worked out. HM Revenue and Customs have suggested about 20,000 EU nationals receive child benefit payments in respect of 34,000 children in their country of origin at an estimated cost of about £30m.

But the total saving is likely to be significantly less than that because Mr Cameron did not get the blanket ban he wanted. Instead, payments will be linked to the cost of living in the countries where the children live. David Cameron has said that as many as 40% of EU migrant families who come to Britain could lose an average of £6,000 a year of in-work benefits when his “emergency brake” is applied. The DWP estimates between 128,700 and 155,100 people would be affected. But the cuts will be phased in. New arrivals will not get tax credits and other in-work benefits straight away but will gradually gain access to them over a four year period at a rate yet to be decided.

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