COMMENT: Is it time to formulate a Brexit escape plan?
Mike Haynes, a professor in the University of Wolverhampton Business School, explains why we are all right to worry about just how Brexit is progressing.
Are you stocking up for Brexit? We look at Project Fear and we laugh in its face. Remember the millennium bug panic? Well, that crisis never happened.
It will be the same with Brexit. Stocking up – it’s hardly what we do here. Except, of course, it is just what we all do.
If you are holidaying in Europe this year you must have thought that if you had changed a few more pounds into Euros when the pound was 10 per cent higher you would be laughing now.
And you might be thinking is it worth changing a few more this year and putting them by? The pound is unlikely to go up but will it go down more?
It is always good to have an escape plan.
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The DUP might be holding up Theresa May’s government but they know that under the Good Friday Agreement everyone with a Northern Ireland parent or grandparent has a claim to a second Irish passport.
Nigel Lawson is getting his French residency permit and Nigel Farage has an EU pension.
It’s a good safety net when the pound goes down.
The best advice is to follow the money. Jacob Rees-Mogg’s Somerset Capital is setting up in Ireland.
John Redwood speaks ‘for England’ except in his role as a global strategist advising investors on where to put their money.
The pension funds we pay into, the insurance companies we use, and the banks that get our pay are all making plans.
In finance it’s called hedging. Other companies call it contingency planning.
The credit card problem the other week and the current CO2 shortages today show how finely tuned the economy is.
When I stand on a local bridge over the M54 and watch the lorries I wonder – if I were running a supermarket chain would I be planning for bigger stocks? You could call it ‘future proofing’. But it is hard to proof against the future when it is unknown.
A last-minute deal might come good. The Government seems to think that it’s like solving the Rubik’s cube. One minute you are nowhere and then a twist here and a twist there and it all comes good to general applause.
Perhaps there will be no deal? It doesn’t matter. If we rule out ‘remain’ we are faced with two unknowns – a deal that has never been done before or no deal in which we go back to the start in a way that has never been done before.
It gets worse when we think about everything else that is happening. Uncertainty can be paralysing. Trump seems to be ripping up the rule book. Is the Euro really that stable? What is happening to the dollar?
If you have no savings you don’t have the luxury of this kind of worry. But if you have a little put by what do you do? ‘Wealth management’ is for the few.
That’s why they tell us that, with today’s low interest rates, it may be best to gamble a bit on the premium bonds. A foreign bank account usually requires an overseas address. A high street bank will only give you a foreign currency account if you have tens of thousands to put in and can pay a monthly fee.
Stocks and shares are not a good bet. The market is already high. And don’t ever invest in the company you work for. That’s called putting all your eggs in one basket. Gold is risky. Maybe we should just blow it?
Don’t get me wrong. My view is that the most likely immediate outcome of Brexit will not be an implosion but series of downwards bumps. But it pays to have a strategy. I think when Brexit comes I think I will give planning to drive to France a miss until the situation in the Channel ports is clearer.
In the meantime keeping the freezer full is not a good idea if the electricity fails. Buying a few extra wine bottles might be. You could even stock up on something stronger.
Unfortunately I am not a spirit drinker. But I am keeping our store cupboard pretty full.
The great thing about tinned food is that whatever it says on the label it keeps for years. So I have a lot of baked beans.
Apparently we buy 1.5 million cans a day. The beans bit doesn’t seem to come from Europe so that’s OK. But what about the tomato purée, the modified maze starch, paprika flavouring and onion powder? They are all on the can I am looking at.
It is complicated thinking this through. But if I am wrong it doesn’t matter.
Everyone likes beans on toast. But if there are problems I will be able to sell you the odd can – at a special post-Brexit price, of course.