Posts Tagged ‘england’

Brexit Stage Right: What Now?

As of a few hours ago, the United Kingdom has voted to leave the European Union. The BBC reports that the final result is around 52% to 48% in favour of Leave – or, to give it its catchy/annoying portmanteau, Brexit.

I’m writing this post largely because I’ve been asked pretty often by friends from outside the UK what this actually means, why it’s happened and what the next steps will be. If you’re a UK resident, you’re probably very well informed about what’s going on, and won’t find this terribly useful.

The Brexit Referendum was called by UK Prime Minister David Cameron, who campaigned for a Remain vote. History isn’t going to judge Cameron very kindly; he promised the referendum for purely party political reasons, because he felt that the only way to keep anti-EU rebels in the Conservative party from tearing the party apart ahead of the 2015 General Election was to mollify them with the promise of in “in-out referendum”. Cameron also calculated that this would reduce the threat to his party’s seats from UKIP (the UK Independence Party), a niche right-wing party which campaigned on anti-EU sentiment and threatened to overtake the Conservatives in a handful of seats.

Cameron, and much of the political establishment, assumed that a Remain vote would prevail. Polling suggested that voters actively opposed to Britain’s membership of the European Union were a vocal minority. Every major political party, business organisation and economic expert backed a Remain vote. Moreover, history suggests that voters in the UK are cautious when it comes to major change, ultimately preferring stability to uncertainty at the polls – in recent years, the UK voted to keep its existing (rather terrible) electoral system and Scotland voted to remain in the United Kingdom, both votes which skewed towards the status quo.

That assumption, that Leave was an outside chance, may explain why what happens next is so unclear. No country has ever left the European Union, just as no state has ever seceded from the United States of America. Procedures exist – Article 50 of the Lisbon Treaty outlines how a nation may leave the EU, and makes slightly grim reading for the UK, as it’s fairly clear that the terms of departure will be decided upon by the other member states in negotiations which do not involve the departing state. The EU, anxious to preserve its stability, isn’t going to be inclined to show the UK special favour in these negotiations. However, it’s not even clear whether this vote actually triggers Article 50 negotiations; the referendum was not legally binding, and the decision to leave the EU still needs to be voted upon by Parliament and formally announced to the EU authorities. Could the UK Parliament ignore the results of the referendum and stay in the EU? Legally, yes. Socially, politically; god knows. The ramifications of simply ignoring a referendum result are impossible to calculate.

Here’s what we can calculate. Firstly, David Cameron is toast. There is simply no way that a prime minister can survive losing a referendum such as this one, especially when the primary opposition he faced was from members of his own party. The Leave campaigners in his party, notably Boris Johnson and Michael Gove, may well negotiate to allow Cameron to remain for a while in order to let him soak up some of the flak that will inevitably come as a result of the chaotic days and weeks ahead. He is, however, now a lame duck and will have to leave soon. George Osborne may be gone even sooner; the Leave team will want a scalp, and while Cameron is useful to them for a little while yet, Osborne is not, and will be seen as a possible threat in a future leadership race. (Equally, both Cameron and Osborne could be defenestrated by the end of the day – it would be wise to keep Cameron on to maintain some continuity while things are figured out, but the Leave team are little if not impulsive.)

(Update: David Cameron has just announced that he will resign, but will remain in place as Prime Minister for a few months while the Conservative party selects a replacement. This does essentially allow him to absorb flak over the referendum – but he’s pushed the toughest part of the whole affair, the actual triggering of EU withdrawal, out into the long grass, saying it will have to be handled by the next Prime Minister. That leaves several months for Parliament to weigh its options and figure out if it really has the brass neck to simply ignore the referendum result and refuse to exit the EU. As for Osborne, no idea, but Cameron’s legislation probably protects him to an extent, and he’s a likely candidate for the Tory leadership from the pro-Europe side of the party.)

Secondly, the United Kingdom is toast. Of the four nations which comprise the United Kingdom – England, Scotland, Wales and Northern Ireland – only two voted to leave the EU. Every single district in Scotland was firmly in the Remain camp, and the country’s political leadership has been very clear about the need for another independence referendum should the UK leave the EU. A second referendum so soon after the first may seem crazy, but the notion that Scotland would not be permitted to remain in the EU should it leave the UK was one of the major arguments of the anti-independence campaigners last time around. With the UK now departing the EU, the landscape has changed dramatically; Scotland swallowed its pride and voted for stability, which England has now abandoned.

Northern Ireland also voted to remain in the EU, but that’s a far trickier situation – one which creates a political and constitutional mess that it’s going to take very delicate work to untangle safely. Voting in Northern Ireland was to some degree along old sectarian lines; nationalists voted to remain in the EU (of which the Republic of Ireland is also a member, of course), while unionists voted to leave. As soon as the results became apparent, Sinn Fein demanded that the UK leaving the EU should trigger a referendum on the reunification of Ireland – which Sinn Fein believes should count votes on the entire island of Ireland, Republic and Northern alike. The details will need negotiation (a plebiscite simply of the people of Northern Ireland seems more reasonable at first glance), but with Scotland likely winning its independence, it will be incredibly hard to deny Northern Ireland a referendum on its future – and that would represent a change to a status quo which remains very delicately balanced. The Good Friday Agreement which largely ended terrorist violence in Northern Ireland is almost 20 years old, and that period of peace has hopefully been long enough to endure through fresh political unrest; but whatever happens next in Northern Ireland, whether it’s a referendum (likely to be won by the Nationalists) or the denial of a referendum, it’s going to seriously upset one side of what used to be a very bloody conflict. So yes, David Cameron could end up going down in history as the prime minister who accidentally withdrew the UK from the European Union, broke up the United Kingdom and destabilised Northern Ireland after nearly 20 years of peace. I suppose at least he can console himself that with all that to discuss, most history books won’t have room to address the whole “intercourse with a dead pig” issue.

Thirdly, the impact on immigration will be minimal. While much of the Leave campaign has been focused on controlling immigration or “taking back control of the UK’s borders”, the reality is that the UK’s membership of the EU makes zero difference to its ability to control migration from outside the EU; and freedom of movement within the EU is a condition of membership of the single market. Non-EU members like Norway have to accept freedom of movement (along with most EU laws and regulations) as a condition of participation in the single market, and there is absolutely no way that the EU will permit the UK to enter the single market without also continuing to honour those rules.

There’s good news and bad news here. The good news is that for EU citizens living in the UK, and UK citizens living in the EU, the impact of Brexit is likely to be minimal – at least in terms of their right to live and work. The nightmare scenario of EU citizens being deported from the UK in droves while the millions of British people who live in the EU are forced to return will not come to pass; access to the single market is simply non-negotiable for Britain’s economy, and Britain’s exit from the EU will of necessity include making whatever concessions are required to retain this. In practice, this will be humiliating for the UK; it will essentially be forced to accept whatever rules the EU passes in future, without having a place in the negotiation or the ability to veto proposals. Dressing up the EU exit as a triumph for sovereignty and nationalism will be a fig leaf for this, but the truth of the new arrangement will hit home eventually.

Fourth, this will cause a serious economic shock. Already we’ve seen an enormous loss to Sterling’s value, trading ceased on stock markets in the USA and Japan, a collapse in the value of several commodities and a rise in the value of gold as investors run for the world’s oldest safe haven. Whether this is just a short sharp shock, or the beginning of a loss of confidence that turns into another slump comparable to the one triggered by the collapse of Lehman Brothers in 2008, nobody really knows. We’ll find out soon enough.

Either way, these things seem abstract, but they have real world consequences. People are going to lose their jobs, and they’re going to see their spending power seriously eroded. A weaker pound has some benefits – it’ll mean British exports are more competitive – but it’ll also mean that imports are much more expensive and that British consumers’ buying power is much lower. Moreover, pulling out of the EU will end EU subsidies for many regions of the UK and for many sectors including agriculture. Remaining in the single market will probably mean that not many companies actually leave the UK en masse, but many deprived regions of the UK will likely be surprised to discover just how much of their industry and infrastructure has been backed by funding from the European Union, not from the UK itself.

Fifth and finally, this isn’t just about the UK. Brexit has come about as a consequence not so much of the European Union or its policies, but as an expression of a general anger and dissatisfaction that has also reared its head across much of the developed world. It’s not unreasonable to compare the UK’s Leave campaign with Donald Trump in the USA, Le Pen in France or Wilders in Holland. Voting for Brexit was characterised by nationalist sentiment and a strong desire to “take back” Britain’s sovereignty from the ill-defined others who have appropriated it. It thrived in communities that have seen widening inequality and economic malaise even as they watched political leaders turn up on TV night after night to talk about economic recovery; communities that may have been delivered a mortal blow by the 2008 recession and the austerity policies which followed, but which had already been suffering from neglect and economic abuse for decades before that, as successive governments tore up more and more pages of the post-war social contract in favour of the shiny new religion of markets and efficiency. There was a time when those communities turned to left-wing movements for their salvation, to unions and to the Labour party; with much of the power of the unions broken and the Labour party pursuing aspirational middle class voters, opportunities have been opened for new and far less savoury political movements to take root. At their core is a deep dissatisfaction and anger not just with individual political actors but with the very institutions of democracy and representative government; a deep conviction that it is not merely that specific parties or policies that have caused people’s quality of life to decline, but that the whole system is stacked against them. Thus, anything that’s seen as part of the system – be it politicians, the media, or even academics and independent experts – is suspect. It is not an attitude that calls for political change, for a new party in power or a new prime minister; it is an attitude that calls for the tearing down of everything, and offers nothing with which to replace it. It is frightening precisely because, in its absolute conviction that the institutions of democracy themselves are a vast conspiracy against the common man, it ends up being insatiable; even if today’s Brexit leaders become Britain’s leaders, in doing so they will become part of “the system” and face the anger of the same people who now cheer them on. The cycle will continue until someone turns up with the capacity to tame the monster that has been conjured up by economic hardship, inequality and unthinking nationalism. Unfortunately, the lessons of the past tell us that such a person is unlikely to be benevolent.

None of this is unique to Britain, and none of it can be fixed by anything less than a fundamental rethink of how we have chosen to structure our society and our economies. Even as market capitalism and globalisation have done wonders at lifting the world’s poorest people out of poverty – an achievement for which capitalism does not get remotely enough credit – it has begun to run out of rope in the developed world. In nations from Japan to Western Europe to North America, inequality is growing and standards of living are slipping. Labour market reforms have turned whole generations into disposable people; I can’t blame British people for laughing off the notion that the EU has protected them in the workplace, when companies like Sports Direct have based their business model off exploiting every loophole, legal and otherwise, no matter how desperately cruel and inhumane, that might allow them to wring more money, more profitability out of their vulnerable, poorly paid staff. “If you leave the EU, you’ll lose your workers rights!” is no argument at all to someone whose zero-hours contract leaves them in desperate financial instability, or whose exploitation by an avaricious, unscrupulous employer has been rubber-stamped by the government itself in the form of a Workfare deal.

The Brexit vote wasn’t just a rejection of the EU; it was a rejection of the whole system, of the whole establishment, of the whole set of institutions and practices that make up the developed world. It was, in ways, a rejection of modernity – a demand to turn back the clock. Turning back the clock isn’t in anyone’s power to deliver. If we want to break this dangerous cycle of economic inequality, social cleavage and political extremism before it rolls out of control, though, it’s beholden upon our countries and institutions to start paying attention to inequality, to public services, to quality of life and to the huge swathe of the electorate for whom every mention of the phrase “economic recovery” in the past two decades has just been salt in the wound.