Thinking Cleary: What should influence our referendum vote?


The arguments from politicians on both sides of the Brexit debate are indecipherable – so I say better the devil you know

I cannot wait for 23 June. I am hoping that once the EU referendum vote is cast the uncertainty will start to subside and the media will have a different topic to write about. But while I am slightly bored with the Brexit debate, I fully understand how important the outcome is to everyone in this country.

I think the arguments being put forward by politicians on both sides of the debate are, quite frankly, indecipherable. Neither side is saying anything that the average person on the street can use to make up their mind and I fear this will get worse as we get closer to the vote.

I decided a while ago that I would not let anything said by politicians affect how I voted on Europe. As a result, I have already made up my mind and am now pretty much ignoring the media.

There were two things I thought about when weighing up how to vote: first, how the outcome would affect my family; and, second, what the impact would be on the country. I honestly do not know whether it is better in the long run to stay or go and anyone who says they do is either a liar or deluded. However, I am firmly in the Remain camp and here are my reasons why.

My job
Like you, I work in the mortgage market and one thing the mortgage market does not like is uncertainty. An exit would bring years of it. Bear in mind it took Greenland (with a population roughly the same size as that of St Albans) more than three years to decouple from the EU’s predecessor in 1985. It is therefore likely to take the UK considerably longer.

As part of my job I speak regularly to institutional investors and capital markets people and, without exception, every one of them has asked for our views on the impact of an exit and what we are doing about it.

These are the people who help to fund the mortgage market and, to some extent, they are price setters, so uncertainty for them is no good thing. Our response as a business is that it is impossible to anticipate the first-, second-, third- and fourth-order effects of an exit. However, the one that is most troublesome is a significant drop in the value of sterling, leading to rapid rate rises. This would hurt mortgage borrowers, lenders and intermediaries alike.

The UK is simply too small to compete with other countries. Whether in defence or economics, we would be up against 1.5 billion Chinese people, 1.5 billion Indian people, 350 million Americans and 700 million Europeans if we decided to exit. In nature, there is generally safety in numbers.

Old age
The country’s weighted average age is increasing as we live longer. Without enough young people, whose National Insurance payments will fund the state pension? Where will all the nurses, police, plumbers and construction workers come from?

The fact is that, in order to maintain or improve living standards, a country has to grow in the long run. And growth takes people. Positive net migration is crucial and by closing our borders we would potentially become insular and irrelevant as a nation.

I am also ignoring the polls, which spectacularly got their numbers wrong on the outcome of both the general election and the Scottish referendum. Instead, I look at the odds the bookies are giving as they have their balance sheets on the line if they get it wrong. The odds for the UK staying in the EU are 2/5, giving an implied probability of 71.43 per cent.