Potential Consequences of Theresa May’s “Hard Brexit”

Mrs. May has spelled out a startling vision of what a post-Brexit Britain would look like: for starters, she’s opted for a so-called hard Brexit that would limit freedom of movement and take Britain out of the single market and out of the jurisdiction of the European Court of Justice. Secondly, under May’s parochial view of Britain outside the EU, companies would be required to disclose the proportion of non-UK employees for naming and shaming purposes. To top it off, academics working in the UK who do not hold British passports have been told not to do any research on Brexit. Also, if we’re to take members of her government by their word, the question of the future of EU citizens living and working in the UK look bleaker than ever. If these proposals are any indication for what to expect under May’s government, then the fate of Britain’s economy and its reputation as one of the pillar nations that underpins the Western alliance of states who pride themselves for their openness, tolerance and values hangs in the balance.

 May Speaking at the 2016 Conservative Party Conference. PHOTO: TOBY MELVILLE/REUTERS

If these measures aren’t alarming enough, a UKIP MP said Mrs. May’s proposal about publishing a list of foreigners working for UK companies is a step too far. It’s amazing how far May has come… just a few months ago she was one of the biggest exponents of retaining membership in the EU. However, to accommodate Eurosceptic members of her government, she has proposed policies too draconian even for the most ardent proponents of Brexit.

The pound fell to a 30-year low of about 1.2 per dollar in light of May’s revelations about her vision for the country going forward. In the event of a hard Brexit, there will be a further downward correction that would continue to erode the spending power and, by extension, living standards of Britons. A hard Brexit would, at best, have a very negative impact on Britain’s short-to-medium term economic prospects, especially as it enters an uncertain phase of negotiating new trade deals with other countries around the world. The economy would be hard hit and if the City of London is severely impacted, Britain’s public finances would suffer. If this scenario were to play out, credit ratings agencies would further downgrade Britain’s credit worthiness, which may further confound an already precarious economic condition.

May is correct to deliver on Brexit… she and many members of her government claim, and rightly so, that they got a mandate — on which they must deliver– to take the UK out of the EU. But delivering that mandate mustn’t come at the expense of putting Britain’s economic fortunes in jeopardy. Even more at stake is the damage that her actions may have on Britain’s standing in the world as an outward-looking, open, tolerant and competitive nation. She should heed the voice of the voters, but she shouldn’t forget that 48% of those voters opted for in. They too should be accommodated in this new Britain.