Liverpool had a large majority for staying in the EU on 23rd June
Yesterday was, without any doubt, a dreadful day for the UK and Liverpool. But before I look at the consequences of that I want to thank Liverpool for the very decisive majority it gave for REMAIN yesterday. Like most cities we are aware of the value that international trade and international relationships give us. Our biggest boost for decades was becoming European Capital of Culture in 2008 which energised our businesses; polished up our reputation and brought real investment to our City for the first time in decades.
Liverpool’s Remain majority was considerable and was partly achieved because of the way that the Labour and Lib Dem Parties in particular got on with the job of maximising public opinion for REMAIN and maximising the turn out. All this week we have had members from all Parties and none in our HQ working together to keep Liverpool in. Yes of course we have differences with them on some issues but not on some of the key and crucial issues. In my own Church Ward which was held comfortably Labour delivered a newspaper and did a lot of door knocking and got a lot of posters up. We delivered the ward three times and did a lot of phone canvassing. I’ll deal with more of the consequences for the political parties later but I would say that perhaps we all ought to learn that abandoning a tribal approach would be of value to the people of our City.
It would be very easy now at this early stage to say we told you say. The REMAIN campaign had to fight a concoction of myths, lies and half-truths. But that is now in the past. We have to concentrate on the future and I must say that it looks bleak indeed. As I predicted we have seen the early shocks today:
Firstly, the value of the £sterling has nosedived by 10%, its biggest one day fall ever. It will, doubtless, recover a bit but it will now be permanently lower. This is real money we are talking about. For those of you about to jet off from your summer hols your spending power has been reduced by 10%. But the consequences are far wider than this. Imports will cost more. We import almost all our raw materials such as fuel and for industrial production. We also import a much of our food and much of our clothing. Expect prices to go up. This may in turn, at some stage, mean a rise in interest rates which will affect your mortgage.
Of course there is an upside to this. Our exports will be cheaper but I am not convinced that much of our industry is geared up to take advantage of this and the effect might be minimal as the manufacturing costs will include higher priced materials.
Secondly the value of stocks and shares has also tanked with huge falls today. Again I expect that some of this price will recover. Again this has real consequences to our family budgets. Stocks and shares are not, largely, held by bankers. They make their money dealing and betting on stocks and shares. They are predominantly held by pension companies who supply the pensions of everyday folk like you and I. If you have a company or private pension or a local government pension the value of your holding has reduced by about 10%. You will not see the consequences of that immediately but at some stage your contribution will have to go up or you will get less in retirement than you had hoped for.
These two factors alone are likely to lead to the need either for a new national budget or a budget based on different or worse forecasts next year. This will impact on levels of taxes and benefits. A reduced economy will mean less tax revenues. The net £150 million a week which we will save from not being in the EU (and which LEAVE has already spent 10 times!) will be peanuts compared to the losses to our economy. I can already predict that in the near future there will be further cuts to the public sector, including the council, in Liverpool over and above the dreadful levels that we have already seen.
But these are just the quick effects. What I now predict will happen is our slow, steady and remorseless decline from today and henceforth. We have already heard companies like BMW say that there will be no immediate changes in their investment plans. Of course not. Investment plans are made over decades and last for decades. But be in no doubt that industries like the automotive industry will suffer. Almost all our car industry a major direct and indirect employer and exporter is foreign owned. Any hopes of future investment will now have a further problem of trade and tariff barriers. We will have to negotiate new trade agreements with the EU and 58 Countries outside the EU. As President Obama has rightly observed, we will be at the back of the queue. Quite simply a Country of 60 million people is not as important to anyone as a trading bloc of 540 million. They will work hard to continue to do things with Europe but not so hard with one smallish Country.
I will continue to update you by way of my blog as I see things develop economically.
But politically we can see the after effects of yesterday most vividly in the Conservative Party. The Prime Minister has already effectively gone but what future is there for his Party? The likely leader is a posh boy buffoon whose record as Mayor of London was poor. The blue on blue missiles fell freely during the campaign. I cannot see how people like Ken Clarke can stay in the same Party as Gove and Johnson.
The Labour Party has also much to answer for and there will be an internal reckoning. They could not deliver their core vote on a subject that was very important to them. The poorest results in Liverpool were in the strongest Labour wards. Nationally that was repeated in council after council. One reason for that was that people could sense that Corbyn, unlike most of his MPs, was ambivalent about the EU. For decades he voted against the EU and suddenly was in favour of it. I haven’t a clue how Labour will resolve this but I am sure that it will mean a lot of time with red on red recrimination.
UKIP is now irrelevant. They are a one trick pony whose trick has been displayed. Already in may their results were the poorest for 4 years. In Liverpool they have effectively ceased to exist. Their only hope is to merge with some of the loony Tories and try and find some reason for existence.
The Lib Dems will suffer least from this as a Party although will suffer most in spirit. We have always been pro-international and pro-Europe. For the past 6 decades we have been staunchly pro-Europe. We still believe that if the UK had effectively engaged in Europe the EU would be a better institution because of the values that the UK would have brought to it. But we have no splits. We lost this vote but we lost it together. We stuck to our principles and showed integrity throughout the campaign. Already we have seen a small number of people join us on this issue alone. I expect more to come our way. These will not be big name, big beasts from the Westminster village but people who have found that they have the same beliefs as we do and are determined to come out fighting for the society that we and they believe in.
For the Lib Dems I am clearer that the story now will be, ‘onwards and upwards’ but that is not our first consideration today. As always our first thoughts are for our Country and not our Party.
Times will be hard but when the going gets tough the tough get going. Tomorrow I will be having some meetings with colleagues to plan the next stages of the Lib Dem advance in the City. We always believe that our City does its best when in Lib Dem control. That need will be more keenly felt in these appalling circumstances for our City and our Country.