Nationalisation: a flawed idea, or an economic saving grace?

Nationalisation is often seen as a buzzword. It usually has a weird effect on people that causes them to start rabidly screaming the words “Marxist” at you every time it’s mentioned. With the Labour Manifesto in the public domain, this phenomenon is becoming more and more common. However, if you’re going to make such a comparison, at least give the Communist Manifesto a read first. The Labour party has pledged to re-nationalise industries such as the Royal Mail, British Energy, as well as Broadband services. Whether the policies put forward by Jeremy Corbyn are plausible or not isn’t the point of discussion, I’m more interested in establishing how or if nationalism fits into the modern-day.

Firstly, it must be established that nationalisation is not actually that radical. Corbyn’s manifesto has been called “Radical” by the BBC and even members of the Labour Party, but the actual policy of nationalisation isn’t as extreme at all. America has utilised nationalisation in various industries, and their Government the exact opposite of socialist. Nearly nine out of ten people in the United States receive their water service from a publicly owned utility and in the last 20 years. Since then, nationalisation of the water industry has only expanded. From 2007 to 2014, the portion of people with water from publicly owned water suppliers increased from 83% to 87%. France’s mass nationalisation of its energy industry in the 1980s, Germany’s re-nationalisation of the Print Office in 2008 after it was privatised in 2001, and Iceland’s re-nationalisation of its largest commercial banks in 2008, shows that it isn’t some outlandish or outdated idea. 

This isn’t necessarily a socialist idea, it’s simply economically liberal. What is then done with nationalised industries is what takes it a step further. Even the services stated above are only a partially nationalised industry, as the state does not have a 100% market share and neither does it legally obstruct private companies from entering the industry. The common question asked is, why on earth would the government want to do this? Simple, it’s because we can’t trust the market completely to operate fairly, and when it crashes, the market won’t protect the public.

In some industries – take water for example – it just makes more sense to have fewer entities providing the service because of the infrastructure involved. The economically savvy readers will recognise this as a natural monopoly. It’s even been used to pull banks and other private entities out of trouble. This is done by temporarily buying them to ensure they don’t collapse and cause damage to the economy as a whole. A good example was when the US government took over GM Motors. When the problem is resolved, the government simply sells the company afterwards. In the case of nationalising industry, it allows the consumer to get a cheaper or even free service whilst the government tanks the cost but runs the companies, they are purchased at a profit which can then go back into your pocket.

Some of you will be reading this and think “Why don’t we just do this for everything? Cheap Nationalised Broadband? Sounds great”. Don’t jump the gun. It’s not something to be taken lightly and isn’t always a good idea. When nationalising an industry, the assumption is the government will actually be good at running the businesses in that industry. You can very easily argue that the British Government, in combination with local government, just isn’t good at it.

To paint a picture, I’m going to use the Labour party promise to provide a state-run fibre broadband service across the country. I am a huge PC gamer nerd. I play mostly League of Legends and Counter-Strike, but anyone who plays video games regularly can unite and agree upon a common enemy, bad ping. Lag spikes are actually the worst, and usually, we all have little tricks we use to try and deal with them, but if they don’t work, we are comforted by the fact that we can just switch broadband providers or upgrade our service. If Broadband is nationalised, you might not be able to do that, leaving you with bad ping and poor gaming experience. 

The state wants to purchase broadband relevant parts of BT, but the BT group also owns Plusnet and EE which have their own broadband services. If only the state broadband service is available in the area you live in, and that service just isn’t good enough, you would have to move to get to a different service provider, because currently there are only 5 providers for commercial usage, and 3 of them (BT, Plusnet and EE) could end up under the state service. To make it even worse, Openreach (a BT Subsidiary) maintains the fibre networks that the other broadband services sell, so if a state broadband service was to exist, the government would either need control of that as well or sub-contract it to Openreach. Even with all those complications, it doesn’t even touch on the fact that everyone who currently works for those companies now becomes state employees, and that’s a whole different fiasco.

Although nationalisation isn’t a ‘pipe dream’ like some would call it. The belief that magically buying all these industries will solve itself is certainly naïve. As I have displayed by briefly exploring the result of the nationalisation of just one service, this is not a straightforward process by any means. Paul Johnson, director of the Institute for Fiscal Studies, said the nationalisation plans of the Labour Party as a whole is risky and would require a restructuring of the economy specifically in the area of taxation. This would be a slow and gradual process that would take around 10 years. This doesn’t just apply to the Labour Party’s plan, it applies the nationalisation as an idea. 10 years is two governments, maybe three, governments. Who says our economic situation doesn’t change? Who says halfway through the project it’s no longer economically viable and the whole thing gets put on hold?

Nationalisation isn’t the Marxist evil that many claim it to be, but it isn’t necessarily the undeniable saving grace of the British population that it is being peddled as either.

OUTSIDE THE BUBBLE: Are the Lib Dems revoking our chance to beat Boris?

Iwan Doherty, an economics commentator for Byline Times, The London Economic and others, is joined by TPN’s Joint Editor in Chief – Seb Chromiak, and Oban Mackie. They discuss the Lib Dem’s electoral strategy in the remain alliance, Labour’s prospects and whether the 4 Day Week should be in the Labour manifesto.

The blues can never be green: why the pausing of UK fracking is an election ploy

After the calling of a general election for December 12th, British politics has taken yet another unpredictable and exciting turn. Already the major political parties have begun to outline their election strategies; from the repetition of Labour’s 2017 strategy that boasts all the optimism of a Manchester United fan’s opinion on Ole Gunnar Solskjaer, to the Europhilic platform of the Liberal democrats that so nearly distracts from their voting record. 

With headlines dominated for so long by the haze of Brexit that it may now be the national sport of the United Kingdom, one might be forgiven for forgetting the very identities and positions of the mainstream parties outside of the European question. Thus, when the Conservative party announced the “suspension” of fracking operations in the United Kingdom, anyone who has taken an interest in the growing environmentalist movement worldwide would be forgiven for assuming this as the actions of a party that cares about the planet.

Fracking – one of the more contentious methods of extracting shale and natural gas – has received a large degree of public scrutiny in recent years. The potential for geological disruption, resulting in the increased chance of earthquakes and threat posed to local communities, is one of many ecological risks associated with the process, implemented at various sites nationwide. Andrea Leadsom, Business Secretary in the Johnson Government, argued that it was the right move for the Conservative government, who were “following the science… until the science changes”.

Leadsom — who infamously questioned on her first day as Theresa May’s Energy Secretary if climate change was real — seems here to justify the suspension of an environmentally damaging practice; until the point that the facts and circumstances change to allow the government to continue it again sans critique. Here we see the government enacting a temporary suspension of a profitable but ecologically destructive practice, until the science or circumstances change that justify them continuing with the destructive business.

Despite the Orwellian doublespeak of Leadsom, the move is nothing short of part of the election campaign launch of Johnson and the Conservative party. Forgetting for the moment the irony of a campaign centred around the idea of Britain deserving better than the brutal imposition of austerity and political buffoonery masterminded by the Conservatives themselves, Johnson’s political ethos focuses on the notion of “getting things done”. Let us get Brexit done, as the Conservatives cry, and we can focus on getting things done for the police force we have cut, the health service we have dogmatically hollowed, and on resolving the environmental crisis. Suspension of fracking, regardless of its motivations, is in the eyes of the Conservatives at least something they have actually got done in the past years of political weakness and ambiguity.

Indeed, one might be forgiven for forgetting what the political parties of the United Kingdom still stand for in these uncertain to-say-the-least times. The Conservatives can certainly be pointed to as the party of action when it comes to environmental considerations; they cannot be pointed to as the party of environmentalism. This is the party that abolished the department of Energy and Climate Change in 2016; the party that removed subsidisation of renewable energy construction and restricted the ability of renewable energy sources to develop in the United Kingdom; the party that ended the programme of sustainable home development due to a lack of profitability for investors. This is to say nothing of the continued support and subsidisation of Nuclear and non-renewable energy sources; many of which are not only unsustainable, but themselves not profitable. The fact that the Johnson Government has acted to temporarily halt fracking operations in the United Kingdom is simply a drop in the polluted ocean that Conservative policies and ideological profit-focus has helped to create.

This is hardly surprising. It is long documented that free market policies such as those championed by the Conservatives are wholly incompatible with ecological considerations; considerations which require the sacrifice of short term and individual self-interest in order to protect the common long-term good. Such profit-focus is integral to the continued dogmatic adherence to Neoliberalism that runs in the very blood of the Conservative party; an ideology that champions the free pursuit of self-interest for all, giving no consideration to considerations outside of capital and profit. Since the days of Thatcher’s gutting of regional communities, to the willing ignorance to the risks of the most profitable course that led to the Grenfell disaster, the Conservative party have long established themselves as the party that cares only for immediate economic success above any and all else. This perhaps explains why, before the enacting of such an election stunt, the party has been such a champion of fracking; almost a perfect metaphor for the extraction of short-term value with no regard for local communities or long-term sustainability.

It may be worth a modicum of congratulations to the Conservative party. Since Johnson took over as leader of the party and the country, the suspension of fracking is perhaps the one true item that the government can, unlike parliamentary votes and PR visits to hospitals, say that it has achieved success in. Make no mistake, however, the suspension of fracking is in no way motivated by a desire to protect the environment or communities affected by fracking. It is nothing short of a rudimentary and basic election tactic and attempted evidence for its “get things done campaign”; a crumb of success that will be weaponised as a counter argument to the myriad of environmentalist criticisms. When the “Science Changes” in the event the Conservatives win majority in the next election, such a suspension will be quickly and quietly repealed, leading to the next inevitable story of a small community ravaged by fracking disaster. 

As far as Environmentalism is concerned, the Conservative party line is evident; that the planet and the people that rely upon it are an afterthought, until the next chance for Johnson, clad in an ill fitting sports top or hopefully at the top of another zip-wire, to weaponise it for his own party’s success.

The Portuguese Socialist Party sweep to victory but is this the end of their economic insurgence?

Three days ago, Portugal’s Socialist party (PS) won a huge mandate in their general election. Antonio Costa’s party won 36.6% of the vote winning 106 seats in their Parliament. Portugal stands alone in Europe as a place where progressive politics are hugely dominant. PS will most likely head into government with Left Bloc or CDU support.

Not only are their socialists about to enter their 2nd term in power they remain one of the few nations that uses proportional representation to have zero far right presence in their parliament. This success story can be traced to the hugely impressive economic recovery the government engineered.

However, with the Socialist Party gaining more power, oddly this may mean the end of radical political vision. Portugal’s economic recovery can be traced from the left-wing coalition that has ruled the country since the General Election in 2014. PS came 2nd but entered government with the left bloc and Portuguese communist party following years of austerity after a bailout. Portugal was one of the worst sufferers post the financial crash.

The conservative Portuguese Social Democratic party embraced austerity, CTT, public mail company and REN, national electric network, freezing public sector pay and raising regressive taxes like VAT. Education got a 23 per cent spending cut, and health and social security went the same way.

The result was 17.5 per cent unemployment in 2013, a 41 per cent jump in company bankruptcies and year after year of net economic decline.

The left took on the gauntlet in 2015 imposing a Keynesian approach to the economic crisis that many were highly sceptical of. PS enacted a reversal of the majority of the cuts while regaining this revenue from taxes on the richest.

The Troika reforms enacted by the previous government were overturned, a 30% increase in spending, while increasing the minimum wage, reversing VAT rises and reintroducing scrapped holidays.

They funded this by adding tax brackets at the top of the income scale while introducing taxes on sugar and increasing it on other luxuries.

The program has proven to be nothing less than brilliant. The economy has grown in every year since they took and Portugal’s economic growth was higher than the EU average in recent years, 2.4 percent in 2018, while unemployment rates fell to the level before the debt crisis.

Miraculously this has been achieved while reducing the deficit which is now almost zero, a historic low. However, this is unsurprising as tax has been levelled on those with the greatest ability to pay. This means spending is retained in the economy while tax take is not decreased. The economic program was designed eloquently to grow the economy and use this growth to reduce the public deficit.

However, such economic quality may be lost due to PS’s large win. A significant number of the policies that have been critical in Portugal’s recovery were only implemented due to their need for support from the 2 far left parties. 

The Left Bloc have struggled to increase their vote share in line with PS. They pushed for more infrastructure spending as well as a nationalisation program. Speaking to Joana Ramiro, a Portuguese journalist, she expressed her dissatisfaction with PS’s progressive credentials.

She said: “Calls for the re-nationalisation of main services, like those lead by the Labour Party, are something PS won’t hear a word of.”

PS’s current manifesto wants to keep the deficit low with controlled spending, but will increase public investment in the national health system and in transport system. This is on top of raising pensions and the minimum wage.

Many on Portugal’s left say this does not go nearly far enough to repair their struggling public services and run-down infrastructure. Their coalition partners may make this more progressive but at present PS offer run of the mill social democracy.

However, the left’s economic program over the last 5 years has helped PS gain a comfortable mandate for governing. While they may not be pushing the edges of radical reform, they show the EU’s left that rejecting austerity is key to winning back support.

A land value tax won’t save the amazon rainforest: Instead we should look to indigenous communities to lead the way

Recently, an article published on this site by one of my colleagues attempted to revive the concept of a land value tax (or Georgism) as the answer to environmental degradation, specifically the tragic and rapid destruction of the amazon rainforest.

This tax is supposedly an excellent counter to the “demonstrations and other forms of virtue signalling from the left”. Although I agree that demonstrations in the UK will do very little, I wholeheartedly disagree that free market reform policies, like a land value tax, will be either implementable or have any effect in combating what is essentially a market driven process. It’s neither pragmatic nor possible. Instead there is a far more practical and proven method to protect the rain-forest already at play and it lies in the inherent power of indigenous communities.

To address the proposal of a land value tax, which i will preface, is not an idea without merit in specific contexts, such as urban and suburban plots of land but in this context it has significant barriers to its implementation.

Firstly, the concepts of a land value tax and the eco-tax mentioned in the article are two fundamentally different financial tools and in order to implement them in concert you have to radically alter the idea of a land value tax from a 100% (or near 100% tax) to one that is adjustable depending on the land that is being taxed. The reason for this is that the tax relies on the market determining the “highest and best use which can be obtained” for the land itself, which contradicts the need to value land in the rainforest as inherently useful in it’s current “undeveloped” state, to prevent further deforestation. Deforestation which is done to clear land to meet market demand from developed, so called ‘western nations’, for meat, soy and other practices like mining. The system of a land value tax ultimately pushes for the development of open land and has the potential for the premature release of farmland for development.

Secondly, there have only been a few instances of land value taxes being implemented with varying degrees of success and often not in the true (Georgian) sense of the idea. Furthermore, these reforms in ‘developing’ nations have led to an “exacerbation of the concentration of wealth”. In addition to this, the method of using international sanctions to enforce this tax has the potential to harm those very communities who’s land has been taken in the first place.

It’s within these communities that a practical and implementable way in which to improve the situation in the amazon can be found. It revolves around recognising the inherent power held by the many diverse indigenous communities of the amazon rain-forest. These individuals have been resisting colonial and then imperialist forces for many generations. Instead of using a theoretical concept of a global common ownership of land which can then be used to levy taxes, instead the international community should directly demand and support indigenous claims to the right over the land they live on.

By listening to the leaders from the amazon itself, those individuals and communities who are and have always been at the front line of a battle with state-backed corporate land grabs, we can formulate the best way, as an international bloc, to support, bolster, and work with them in saving the rainforest.

Many lands that are mandated by the government for indigenous use are still legally owned by the government itself. This is where many of the illegal activities associated with agribusiness are occurring. Bolsonaro, the Brazilian President, has been targeting these very indigenous groups, freezing the demarcation of new indigenous land and stripping the national indigenous foundation, known as Funai, of its powers. This is exactly what must be stopped and soon. It’s widely held that supporting indigenous land rights is a key process in preventing deforestation and destruction. It has been show that in some cases it can reduce forest fire incidents by 16% compared to areas that are simply ‘protected’ without land rights. This makes sense because these communities have been successfully and actively managing the rain-forest for countless generations. Initial reports from the world bank state that: “it will cost far less to save carbon by recognising forest community rights rather than relying on the future money markets”. Furthermore, one report outlined that it would cost £2 per hectare to recognise indigenous land rights.

Compared to a cut and paste tax requiring hoards of land valuers, this is a method that is both steeped in history and has already been implemented and measured. It’s ethical, anti-imperialist, and efficient. The World Resource Institute showed in their research that: “securing community forest tenure is a low-cost, high-benefit investment that benefits communities, countries, and global society”. However, this will not be the only way we can quickly and decisively stop the destruction of the rain forest. Perhaps an Eco-tax in some form and other international methods of pressure will be key in this collective endeavour, but this should always be fronted and led by those communities who live and resist within the amazon rain-forest itself.

For virtue signalling flag wavers, here are some ways you can help below:

Support the rainforest action network working directly with indigenous communities

Follow and support resistance on the ground and indigenous groups

Choose alternatives and pressure your own government

How Georgism can be the answer to environmental degradation

The Amazon rainforest has been burning for three weeks. This is devastating the lives of indigenous communities and the wildlife that inhabit this fundamental ecosystem of the earth. On Monday, the smoke covered the skies of Brazil’s biggest city, Sau Paulo, blocking out the sun of a city that is over 2700km (1700 miles) away. The Amazon is often referred to as the planet’s lungs, producing 20% of the oxygen in the Earth’s atmosphere. The fact it has taken up to three weeks for the news of the fires to reach the West has been cause for concern to the public and many have taken to Twitter to express their sadness, anger, and disbelief, as seen below.

Indeed, it is important to identify the role of President Bolsonaro in enabling such catastrophic deforestation, which begun immediately after he took office in January with his assault on Amazon rainforest protections through the transference of regulations and creation of new indigenous reserves to the agriculture ministry. The agricultural ministry is controlled by the powerful agribusiness lobby and led indigenous spokespersons to highlight such an event as a symbolic concession to farming interests at a time when deforestation is rising again.

Such a statement has unfortunately been proven correct by data from the National Institute for Space Research, whom have reported the number of fires in Brazil this year is has increased by 84% than over the same period in 2018.

Nevertheless, it is time for more pragmatism in addressing environmental degradation. Calls to organise demonstrations and other forms of virtue signalling from the left simply aren’t good enough. Environmental disaster is here and now, calls to defeat capitalism are not. Capitalism is deeply ingrained into the global order, therefore to create a new global order takes time which we simply do not have at our disposal. Instead, I argue we must invoke the ideals of Georgism.

Georgist economic theory posits that whilst individuals should own the value they produce themselves, economic value derived from land should belong equally to all members of society because the resources of the land should be free for all to benefit from. Policy proposals that incorporate this are eco-taxes which tax polluters. This would include deforestation by farmers. In Georgist terms, this is a land-value tax which discourages waste. Therefore, for a land mass as large as the Amazon, which provides up to 20% of global oxygen, any attempts to deforest would see a huge financial burden placed on the individuals and businesses that seek to do so.

Although the majority of deforestation in the Amazon is illegal, the actions of President Bolsonaro in weakening the power of government agencies responsible for protecting the rainforest, implicate him as an enabler and as someone who doesn’t take climate concerns seriously. This is most recently evident in his dismissal of former head of agency and physicist Ricardo Magnus Osório Galvão, for releasing a report highlighting the alarming rate of Amazonian deforestation in Brazil.

However,  international sanctions on states which do not adhere to an international standard of land-value tax would demand much more action. This would make the continuity of such economically damaging activities politically nonviable. Therefore, this is a possible route to success in saving the environment from leaders such as Bolsonaro, whom seek to bypass the importance of protecting the environment in their pursuit of development.

If, and it’s a big if, the international community and world leaders can come together to implement a global, Georgist land-value tax, it would go a long way in beginning to reduce pollution and other damaging activities to our environment.

History And The Resilience Of The Cooperative Model

The first cooperative in Italy was established in 1854 in Turin, as part of a wave of liberal reformism. As the movement grew, it split into two branches: the socialist branch that was stronger in the North and more focused on worker and consumer cooperatives, and the Catholic branch that was stronger in the South and more focused on agricultural and financial cooperatives. The movement grew to play a vital role in the Italian economy. For example, in 1919 the biggest port in the country was operated as a worker owned cooperative.Cooperatives, especially those of the socialist tradition, faced suppression by the Fascist regime and were deemed as cesspools of opposition activities. People were imprisoned, properties were destroyed, and central organizations were put under strict control of the dictatorship. 

After the war, cooperatives grew gradually alongside an economic boom that lasted until the 1970s. However, as the rest of the economy started to slow down, cooperatives continued their growth. The share of employment in cooperatives has more than tripled since the 1970s, reaching around 7% in 2018. The model, sometimes branded as old fashioned and suitable mostly for agriculture, turned out to be superior in adapting to the modern economy. 

Below are three facts that demonstrate the resilience of the cooperative business model in Italy:

Social Cooperatives

In the 1980s Italy saw two new type of cooperatives emerge; ones that provided social, health and educational services and ones that created jobs for disadvantaged people, so-called work integration social cooperatives. These two types of so called ‘social cooperatives’ were given a legal framework in 1991. The following decade saw this sector boom, with a five-fold increase in the number of people employed in social cooperatives, reaching 149,000 people in 2001. 

With the aging population and the growing share of employment in the care sector, Italy is spearheading what might be one of the most revolutionary transformations in the labour market – giving ownership of the care providers democratically to those receiving and giving the care. The technological advancement is a trend that makes it harder to employ disabled and low-skilled workers, which is also a question these cooperatives are addressing with great success. Below are two facts about the sector, one for both types of the social cooperatives:

Worker owned cooperatives

Italy has over 25,000 worker owned cooperatives, more than any other country in the world. To put this into perspective, the US only has 650, although the population is more than 5 times that of Italy’s. Two facts below show some of the social benefits that these sort of businesses have, as well as an example of what kind of legislation Italy has in place to support the sector.

Retail cooperatives

The largest retailer in Italy is a cooperative, simply called ‘Coop’. It has been at the forefront of ethical retailing, becoming the first European company to adopt the S A8000 Standard which is the only international standard valid for all sectors that can be certified by an external entity and ensures the ethical behaviour of companies and of the production chain towards workers. It was also the first Italian retailer to introduce FairTrade products. 

Below is an example of a project it has supported to help post-conflict areas in other countries:

Emilio Romagno – The world capital of worker owned cooperatives

Emilio Romagno is an area in Northern Italy that has one of the highest median income in all of Italy and it also ranks on top in various indicators of social well-being. The region also has the highest propensity to export in the country. 

The region also has perhaps the highest ‘social capital’ (a term that refers to intensity of interpersonal relationships, trust, cooperation and reciprocity) in the developed world, according to Robert Putnam, who has coined the term and is the leading researcher on the subject. This was measured by surveys that explored, for example, how often people take part in volunteering activities and how well they know their neighbours.
Around 30% of the GDP of the area is produced by worker cooperatives, making it the most worker cooperative based economy of its size in the world.

The Future

The movement is coming full circle, as its socialist and catholic traditions are gradually joining together.

Only the imagination sets limits to the opportunities of the future, and one of the most brilliant platform cooperatives, FairBnB coop is based in Emilio Romagno. It is a cooperative alternative to Air BnB that seeks to become co-owned by the hosts and guests. Instead of taking a commission that goes to the shareholders, the cooperative will donate to local projects of the members’ choice, such as public gardens or historical conservation. It is a straightforward example of a vision we at Coop Exchange embrace – a sharing economy where the ownership is shared. Air BnB faces opposition by the residents of areas that are very popular on the platform, but a cooperative alternative that would contribute to the betterment of the local area would surely be welcomed more positively. Whereas Air BnB enters an area and operates there until pressure from the public forces politicians to regulate it, Fair BnB will seek to help the public and contribute, not extract, value from the communities it operates in. We warmly recommend everyone to enlist their interest in the cooperative on their website

Emilio Romagno has the potential to become the centre of a great transformation of the start up culture towards crowdfunded, user-owned platform cooperatives. It has the potential to not only be the driving force of lifting Italy out of its economic problems, but also become the center of a distinct European tech sector that can rival that of China and the US.

Investment firm Goldman Sachs increases No-deal probability forecast by a third

The multinational investment firm Goldman Sachs has increased it’s prediction for the probability for a no-deal Brexit by a third, to 15%, following Prime Minister Theresa May’s resignation announcement yesterday.

The firm had previously predicted a 10% likelihood of the United Kingdom crashing out of the European Union without a deal, however due to recent election successes believed to be accrued by the Euro-sceptic Brexit Party, and the possibility of a hard-Brexit supporting Prime Minister at Number 10 by mid-June, Goldman Sachs has since revised their estimate.

The probability of no-deal is now as high as the estimate was in April earlier this year, when the probability was cut due to the extension of article 50 by Theresa May’s Government to free up more time to work out a formal withdrawal agreement, of which 3 versions of said agreement were put before Parliament and subsequently rejected. 

An Economist for Goldman Sachs, Adrian Paul, has stated that the firm still expects an “orderly EU withdrawal in late 2019 or early 2020”, but that the organisation’s “conviction” is lowered due to recent events. 

Brexit predictions were thrown into disarray yesterday as Prime Minister Theresa May announced that she would be resigning from the role as soon as the middle of next month, and that processes to elect a new leader of the Conservative Party are to begin next week.

Many are placing current Backbench MP Boris Johnson, who has a considerable popularity within the party’s more radical elements for his support for a hard-Brexit, as the most likely candidate to score enough points within the Conservative membership base to be elected as the next Prime Minister. 

This has prompted a civil war within the Conservative Government, as many prominent Ministers of Parliament have either come out in support, or in direct opposition with the potential Prime Minister. 

Mr Paul also clarified that while it was unlikely for the current Parliament to push forward a popular no-deal vote the performance of the Brexit Party, and the potential for having a Hard-Brexit supporting Prime Minister, opens up the possibility for a second referendum vote to have the option of including a choice of “no-deal” on the ballot for the public to decide, which would drastically increase the odds that the United Kingdom, emboldened by a popular vote, would crash out of the European Union onto World Trade Organisation terms.