Brexit means a UK recession

The UK must pay its divorce settlement to the EU and then and only then can talks on trade, security or anything else take place.

Where is the UK getting this £58.7 billion divorce settlement from is the question nobody is asking.

Brexit has created a £58.7 billion black hole in the government finances as the government never expected a leave vote and thus never set aside this divorce settlement which will have to be found.

On 29 March, the day of triggering Article 50, BBC Newsnight saw Emily Maitlis interviewing Damian Green the DWP Minister (introduced as allegedly the closest cabinet minister to Theresa May) being asked whether the amount the UK will pay post Brexit for trade and other EU access will be more than the current £200 million per week we now contribute.

Damian Green refused to be drawn on whether we would be paying more per year into the EU post Brexit yet did not quibble the £200 million per week figure so the UK could be paying more than this £10 billion per year post Brexit!  

Yet before we even get to this discussion the UK has to pay the £58.7 billion divorce settlement of almost 6 years of what we pay now. Brexit means the UK pays a one-one 6 years worth of EU contributions and then could pay MORE per year for access to EU markets and trade!

Anyone remember the £350 million per week claim that we allegedly sent to the EU each week and how we would save this amount by voting to leave?

The  media discusses everything about Brexit from the shape of bananas to jingoistic deflections and tub-thumping over Gibraltar … everything in fact apart from the COST!

Where is the UK government going to find this £58.7 billion that it needs to agree to pay  BEFORE any discussions on trade, security, cooperation and anything else can take place?  

Why is nobody talking about the extra cost of leaving?

Why is nobody talking about the added cost of leaving?

Why is nobody talking about the increased cost of leaving?

Why is nobody talking about the much higher cost of leaving?

Why is nobody talking about the alternate cost of leaving?

The alternate cost is where will the Tory government make the massive cuts needed to pay for the increased cost of Brexit, which are huge, and nobody is denying the £50 billion or so cost, even the closest confidante of Theresa May as the BBC Newsnight interview confirmed.

Is the Chancellor going to increase income tax to pay for it, perhaps have another go at increasing national insurance contributions?  Or is the Chancellor going to have to cut the welfare benefit bill even further and take the money from the least able to afford the reckless additional massive cost of leaving the EU.

Politically income tax increases are a no no.  Raising National Insurance has been tried and then saw a massive U-turn in just 6 days as this was a manifesto commitment so that is out too.  The welfare benefit bill has been cut well into the bone an there is no room for further cuts unless the pensioner (who receive £2 in every £3 of ‘welfare’) no longer remain exempt as they have been to date.

Where is this latest and most current £58.7 billion initial cost of the Brexit divorce going to come from is the question that nobody is asking!

The UK spends £46.9 billion per year on defence and so the one-off Brexit divorce payment of £58.7 billion is more than we spend on the total defence budget.

The UK spends £47.8 billion on Education and a whopping £159 billion per year on pensioners including £113.3 billion per year on the state pension which by sheer coincidence is exactly double the £56.6 billion the UK spends on welfare benefit for those of working age – the same £2 in every £3 of welfare spend that goes to the pensioner.

Where is this latest and most current £58.7 billion initial cost of the Brexit divorce going to come from is the question that nobody is asking!

The implications of Brexit however cannot be talked about as it is the will of the people who have spoken blah blah blah and we are not allowed to say that the electorate are stupid and have been massively deceived by the Tory and UKIP parties who voted for it – yet they are stupid and innumerate as the cost of Brexit becomes all too apparent.  Even stupider is the government for triggering Article 50 without issuing any form of impact assessment as to the cost of Brexit.

Yet regardless of who is or is not stupid and regardless of the fact that the cost of the UK’s future contribution for EU access could well be more than we pay now, and regardless of the fact this will be decided by the remaining 27 EU members and the UK will not have a seat at that table the question remains …

Where is this latest and most current £58.7 billion initial cost of the Brexit divorce going to come from is the question that nobody is asking!

Regardless of the fact that Michael Heseltine has today said that Brexit is the biggest loss of power and influence in the history of peace time or that Michael Howard is in essence saying we should be willing to go to war over Gibraltar…

Where is this latest and most current £58.7 billion initial cost of the Brexit divorce going to come from is the question that nobody is asking!

On the most hardened Brexiteer view the UK’s net contribution was around £18 billion per year, the £350 million per week figure that adorned so many buses, yet even if that is right we still have to pay more than three times that figure at £58.7 billion in an immediate divorce settlement BEFORE the 27 remaining EU countries will open up talks about what, if any, access the UK has to its largest trading partner, and before we are told how much that access will cost the UK

Where is this latest and most current £58.7 billion initial cost of the Brexit divorce going to come from is the question that nobody is asking!

How can the UK pay the £58.7 billion Brexit divorce settlement:

  • Cut the army, navy and air force by 10% – that’s £4.7 billion
  • Cut Education spending by 10% – that’s a further £4 billion
  • Cut all working age welfare benefits by 10% – that £5.66 billion
  • Cut the state pension by 20% – that’s a further £22.6 billion

Hang on that’s just £36.96 billion … so if we then cut the NHS by £350 million per week or £18.2 billion that makes £55.16 billion which is still £3.54 billion short…

Entirely speculative of course but by no means flippant as these type of cuts are what Brexit means so why is nobody asking …Where is this latest and most current £58.7 billion initial cost of the Brexit divorce going to come from?

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5 thoughts on “Brexit means a UK recession

  1. How about QE? That paid billions, even trillions “we” didn’t have down the back of the sofa?

    For a fiat currency the notion that we “have to” cut anything to “pay” for other things is a simple nonsense but it goes down well with the public. Perpetuating the myth about austerity has allowed the welfare state to be dismantled. The amounts being taken from the benefits bill is just peanuts in terms of the overall budget, but it is a hell of a lot if your ESA or HB or PIP is cut.

    1. But those trillions didn’t actually go into the economy, they went into bank reserves at the BofE in exchange for bad assets the banks had on their books Whole other thing, Florence. But you’re right about austerity and fiat currency in general, seems to me 🙂

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