EU Referendum Starts To Backfire – S&P Downgrade UK Outlook


Standard and Poor'sWell I’ve always thought that the proposed EU Referendum would backfire – and if it hadn’t done already, it most certainly looks like it is doing so now.

Now, Labour have recently decided to back the EU referendum – whatever the pros and cons (I personally don’t back an EU referendum), there’s no point in opposing the referendum in itself anymore.  The Conservatives have a majority, a very slim majority, but needless to say a majority.  And they had the EU referendum as a prominent part of their manifesto – so it’s going to happen, no matter who or how much people stamp their feet.

Standard and Poor’s, one of the worlds leading credit agencies, has decided to downgrade the outlook for the UK economy from ‘stable’ to ‘negative’.  So what does this mean?

Well, at the moment, it doesn’t mean a lot – it’s about what it could mean in the future.

Leading credit agencies, such as Standard and Poor’s rate countries credit worthiness.  The UK, with Standard and Poor’s, currently has the much coveted ‘triple-A’ rating which puts it in a select group of countries with the best possible credit rating in the world.  Our countries credit rating impacts the ease on how the UK can obtain loans and the terms on which they are offered – particularly the credit rating (similar, on a very general level, to how it works for personal and business finances).  So high credit rating = low interest rates in theory – and with the UK’s national debt doubling under the previous government coalition, it’s definitely something we can’t ignore.

Whilst Standard and Poor’s have retained the UK’s AAA credit rating of the moment, the change of their outlook forecast to negative indicates the first stages that we are heading down a path to losing this credit rating.

Pie in the sky?  Well it’s already happened once with the Tories and Chancellor Osborne at the helm.  In 2013, despite austerity (remember, that’s how to ‘fix’ the economy), under Osborne’s stewardship of the Treasury, Moody’s (another leading credit agency) downgraded the UK and we lost our AAA rating with them.

Standard and Poor’s have gone on record as saying that the main reason for the negative outlook for the UK economy is due to the impending (but as yet, date unknown) EU referendum.

I completely agree, and always have done, that an EU referendum, particularly in these trying economic times is bad for the country, bad for business and bad for the working people of this country.

This isn’t about democracy – of course we should have a say on things.  Do we need to have a say unless more powers are transferred?  Maybe (although, currently I would say not).  But the one thing we must be sure of before we ‘get a say’ is that the true information about the European Union is out there and available to all so that we can all make an informed choice.

We’ve got Farage talking about EU policy and law, presidents, armies, national anthems and a whole range of things he doesn’t like…. and on some things he has a point.

The EU is far from perfect.  But what is perfect?  The UK government is, and never has been, perfect.  No government is perfect.  Democracy isn’t perfect.

Have we got benefits and things to be thankful to the EU for?  Sure we have.  Do we need a balanced case considering the points objectively – of course.

But Tory/UKIP politics on the EU at the moment is centering around the politics of fear and division… the politics of hate over hope.

Is UK immigration too high?  Well that’s subjective.  Is the UK ‘full’?  Again, that’s subjective.  But blaming immigrants and immigration for the difficulties we currently face in this country is wrong – and blatantly not true.

As the Tories like to point out, immigration was high under Labour, particularly post 2004.  Was it an issue then?  Some people will say yes.  Was the country broadly accepting of high immigration?  On the whole, yes.  These were the boom years.

Now that we’ve been in an extended period of hard times, post financial crisis, and now suffering years of austerity people need someone to blame… and politicians all need their bogeymen that they can point to and say ‘there’s the problem’.

Unfortunately, the Tories have chosen immigrants, disabled and the poor.

Immigration puts pressure on housing – of course it does.  But is immigration the source of the problem?  No.

The problem, quite simply, is that we are not building enough houses.  If we went through another baby boom, 20 years later would we blame housing problems on these babies?  No, because it would be poor government planning as to how that situation has developed.

Immigration puts pressure on the NHS – of course it does.  But is immigration the source of the problem?  No.

The problems are an underfunded, overstretched and failing National Health Service due to poor coalition, and now Tory health policy – these problems were the same problems that Labour inherited in 1997 from 17 years of Tory NHS failure.

Are immigrants all ‘coming over here’ to claim benefits?  No… and the figures support that.  In fact, as a UK born national you are more likely to claim benefits than an immigrant.

Does immigration need looking at?  Yes.  Do we need to end free movement of people across the EU?  No.  As many Brits take advantage of free movement as immigrants coming into the EU.  Freedom of movement is a founding principle of the EU and I absolutely would agree with other EU leaders when they say ending free movement of labour is not on the negotiating table.

But obviously, there are problems in the UK.  And people want someone to blame.

Immigrants, disabled and the poor are easy targets to blame.  With immigration and disability in particular these are smaller groups of society – not a majority (no matter what the likes of the British National Party or the UK Independence Party would have you think).  And it’s easier to scapegoat a minority.

NHS, housing, public services in general aren’t failing because of immigrants.  They’re failing because of:

  • poor government policy
  • a financial crisis caused predominately by the financial services industry
  • multinationals not paying their taxes

Let’s not become an inward looking country.  We should be proud that we welcome a wide range of people with a wide range of talents into our nation where diversity, compassion and understanding are some of our core principles and strengths in an increasingly fractured world.

It wasn’t eastern European migrants who engaged in casino banking that brought our economy to its knees.  It wasn’t Commonwealth migrants who elected a government hell bent of dismantling our public services.  It isn’t immigrants who aren’t paying the taxes that they owe.

An isolationist future isn’t bright – it’s a step backwards to the dark ages.  We need to continue building bridges and breaking down barriers – after all, that’s one of the prime reasons why Europe hasn’t seen anything like the terrible world wars of the previous century.

Hope over hate.  Common endeavor and partnership over division.  Let’s not go back to a time which firmly belongs in the past.