Who has benefited most from the collapse in the value of the Brexitpound?

“This will be a victory for real people, a victory for ordinary people, a victory for decent people. We have fought against the multinationals, we have fought against the big merchant banks, we have fought against big politics, we have fought against lies, corruption and deceit. And today honesty, decency and belief in nation…… is going to win.” – Nigel Farage 4 a.m., Friday 24 June. Brexit D-day+1

Powerful words on the night of the referendum result and, now that some time has passed since thn, it is worth examining who has been ‘winning’.

Probably the most palpable two indicators of winners and losers in this post-Brexit era come in the shape of the stockmarket and the value of sterling against the rest of the world. This, in turn, allows us to come up with a decent enough list of this benefiting and those not.

We are being repeatedly told by the pro-Brexit gang that the collapse in the value of the pound – and it is a collapse – will help British exporters – including, rather bizarrely, marmalade producers. So let’s take a look at the markets and companies who are seeing the good times roll.

Here is the list of the top five industries in which Britain exports and which, with the new pound valuation, will more than likely benefit:

  1. Machines, engines, pumps: US$63.9 billion (13.9% of total exports)
  2. Gems, precious metals: $53 billion (11.5%)
  3. Vehicles: $50.7 billion (11%)
  4. Pharmaceuticals: $36 billion (7.8%)
  5. Oil: $33.2 billion (7.2%)

There is something mildly weird about this list. Number 2 is mined stuff – which doesn’t happen anymore since the last Cornish tin mines closed decades ago. But when you look at major exporting firms based in the UK, number 2 on that list is Rio Tinto. Yet, whilst it employees around 55,000 people, just 262, or 0.5% of that workforce, are actually employed in the UK.

Then, there are vehicles exports at number 3. Whilst British employees – or primarily British robots – may screw them together, the actual major firms making the stuff are certainly not British companies. Minis, Hondas, Nissans, Toyotas – all assembled here but none of the profit stays in the UK.

Then down at number 5 is oil, exporting massive, but declining amounts, of the black gold overseas. BP comes top of the list of all companies exporting from the UK and will benefit humungously from the fall in the pound. And with 79,800 employees this can be classed as a major British success story. Except that only around 5% of them 4,500 – are based in the UK.

The rest of the top five companies are made up of pharma companies – whose staff need to be highly qualified scientists to be able to work for them; or Godawful companies like cancer inducing British American Tobacco, whose proudest boast on their website is that ‘In 2015 we sold 663 billion cigarettes, in more than 200 markets around the world.’ Hurrah.

Here is that top 5 UK exporters list:

  • BP (oil, gas)
  • Rio Tinto Group (diversified metals, mining)
  • GlaxoSmithKline (pharmaceuticals)
  • British American Tobacco (tobacco)
  • AstraZeneca (pharmaceuticals)

So who then are the real winners from this?

1 – Executives. They get massive boosts to their base salary for increased profit margins even if it was nothing to do with actually improving performance of the company itself.

2 – Overseas owners, like BMW or Toyota, who see at least in their short term, profit margins increase.

3 – Low skilled overseas employees who can get hired doing manual labour in oil fields, mining and the like as these secondary industry companies hire more people to exploit the last of the planets’ finite resources.

4 – Shareholders. This could be the middle class but is more likely major institutions like big banks and hedge funds.

Not an ordinary, decent person in sight. The people who don’t benefit from this boon are those who primarily voted Brexit and were told they would be winners by Farage on that fateful night in June. Most won’t be skilled enough to get a job at a pharma company, or own a firm that is set up to export or own shares. Instead the very people and multinationals that were the vilifying rallying cry and cause celebre for the leave campaign are the very ones that are reaping the rewards.

What is worse is that most of these firms deal in stuff that isn’t doing the world any good – oil, fags, plastics. Go a tad further down the list and weapons companies start to appear as they flog their latest killing machines to despotic regimes. Or booze and junk food companies. The one thing missing from the list is anything wholesome or nice or tree hugging. God bless those exports.

Meanwhile instead of benefiting, the ‘real, ordinary, decent people’ will suffer the most. Higher food inflation will start to pop up now the Tesco v Unilever battle has been aired. Petrol costs are already forecast to increase by a decent wad and overseas holiday are likely to become the choice of the richest as people become unable to afford a Euro or a dollar.

The Brexiters remain in denial. Believers that they beat the system, when as so often happens in a David v Goliath battle, the system beat them. But like a good Christian who can fit the latest round of facts to meet their belief in their fiction, Brexiters will continue to say it was a good deal and worth the price. Even when they still haven’t realised how big that cost is for them and how much better off everyone else will be.

So if you are a remainer then the only solace you should take is that you can keep your head afloat whilst the Brexiter denialists drown. Buy some multinational shares. Buy some dollars and some Euros to hedge your pound. Keep buying houses in London. Get yourself or your kids a degree in a science. That way you can still be the winner than Farage was talking about.

Advertisements

One Comment Add yours

  1. Syrup01 says:

    Ah! But those (non-existent) ordinary people are only affected by the economy because that is all that’s plastered over the media. If people weren’t told how strong or weak the economy is, do you think they would really know? Unless the “ordinary” person is going to Thomas Cook to change up some Euros, do you think they would actually be affected by the price of sterling? It seems that if the rich feel a pinch then the world has to know about it and it’s everyone’s problem.

    I can tell you the happiest people in this world are the ones who are oblivious to the media telling us all how bad everything is.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s