Accounting for Brexit

Hourglass background
istock_charlieaja_aw
Share this content

Ahead of tomorrow's vote on Theresa May's Brexit deal, our resident accounting columnist gets steamed up about the lack of clear figures to back up either side's case.

I would imagine there can be very few, if any, readers who are not heartily sick of politicians arguing with each other very publicly about Brexit.

The longer this debate goes on – and it has now been running for 2½ years since the vote – the more entrenched positions seem to become.

My guess is that many of us feel some sympathy for the Prime Minister, even if we do not think that her proposed deal is the right solution. If ever anyone was stuck between a rock and a hard place, it is Mrs May.

Indeed, although he would not say anything of the kind, Jeremy Corbyn may well be extremely grateful to lead the opposition at present rather than the government.

Having read the foregoing paragraphs, you may be wondering what on earth this writer is doing adding yet more bluster to the tedium.

My point is a simple one. I am an accountant and underwent years of training to understand how businesses operate and the ways in which we ensure that those operations are correctly reflected in accounts.

In simple terms, you add up all the income and then take off all of the expenses to reach a profit or loss. Getting a bit sophisticated, you can also add up all the assets and take off all the liabilities to determine the value of the business. This is all achieved using ever-changing and increasingly complicated rules, many of which are now shared with our European neighbours.

What I still find astonishing is that over three years from the time at which the politicians first started telling us how good/bad leaving Europe was going to be there are almost no numbers to support either case.

The Treasury has built itself a model, which the other side pooh-poohs, without stating exactly why or, more importantly, presenting any alternative numbers to support their own case. The Chancellor did announce some initial costings for preliminary work in the Budget and they sounded terrifying to me.

Boris Johnson and his cohorts did their accounting not on the back of a bus ticket but on the side of the bus itself, concluding without any apparent justification that the National Health Service would benefit to the tune of £350m a week.

Other than that, for the most part, all that we have heard is people shouting very loudly rather like angry football fans blindly supporting their own faction.

If Brexit is a good idea, then please can someone create a balance sheet/P&L account with some concrete numbers to show me why I am going to be better off personally in one year, three years or even a lifetime.

Alternatively, if it is a bad idea, then could someone do ditto to prove to a true and fair view level that we should stay where we are.

Sadly, nobody seems to care about concrete facts so we are going to make this momentous decision without any serious figures, relying on a strategy that is the equivalent to pinning the tail on the donkey while blindfold.

Is this really a way to run a country?

About The Imprudent Accountant

About The Imprudent Accountant

Someone who should know better, but can't resist the occasional rant about the more exasperating aspects of the accountancy profession.

Replies

Please login or register to join the discussion.

By Tornado
14th Jan 2019 22:28

"Boris Johnson and his cohorts did their accounting not on the back of a bus ticket but on the side of the bus itself, concluding without any apparent justification that the National Health Service would benefit to the tune of £350m a week."

and -

https://www.itv.com/news/2018-06-16/nhs-to-get-extra-384-million-per-wee...

Does that not back up the claim?

Thanks (3)
avatar
15th Jan 2019 10:43

Brexit is about much more than the economy. Of course the economy is important, but I have yet to meet a business leader who isn't capable of finding a new way to trade given any obstacles in their way. If the USA and China can trade without an EU deal, why can't we? It wouldn't be such a mess if it wasn't for inept, dogmatic politicians.

Thanks (2)
avatar
15th Jan 2019 17:25

"He said that MPs could not underestimate the complexity of Brexit and that the deal offered an "orderly, predictable and legally certain" way of leaving the bloc, without "thousands" of legal issues arising for citizens and businesses."

https://www.bbc.co.uk/news/uk-politics-46868194

Surely in that context he must mean "could not overestimate". This bloke is a QC at the head of our government, so with such schoolboy errors from such people no wonder they are on the back foot here.

Thanks (0)
By DJKL
to Justin Bryant
17th Jan 2019 20:07

I think he actually means, in the context of the rest of the sentence, "ought not" or "should not"

Of course could and should are often misused in sentences, as of course are can and may.

Thanks (0)