Friday, 24 June 2016

A post-Brexit world

The vote by the British to leave the European Union was remarkable on many levels. It was unexpected in the sense that an overwhelming majority of financial experts believed Britain was better in the EU than outside it. The rejection of their opinion speaks volumes for the disenchantment of voters with economics. In many ways this is understandable because the majority of Britons have seen little improvement (and often a decline) in their economic circumstances for many years - and the feeling must be "stuff the experts".

I certainly have some sympathy with this reaction. For many years the rich have become richer while the incomes of working and middle class voters have at best stagnated. There is a perception (in my view justifiable) that this is the direct result of fiscal policies promoted by the Conservative government (and a very weak opposition during this time).

However when the quality of their lives deteriorates the people become vulnerable to pernicious manipulation and I have certainly no sympathy whatsoever with the way that the immigrant issue has been presented by the Brexit campaigners. A particularly egregious example was the UKIP poster of migrants crossing the Slovenia-Croatia border that was nakedly racist. The immigration issue became the emotive central issue of the referendum and I am very sad that many Britons were sucked in to believing that their troubles could be alleviated by putting up immigration barriers.

A second respect in which the referendum result was remarkable was the different ways in which the four countries of the UK voted. The majority of English and Welsh votes were cast for Brexit but in Scotland and Northern Ireland the picture was very different. In Scotland the vote was 62% against Brexit. This raises once again the prospect of Scotland's destiny being held hostage to the opinions of their English neighbour and I am certain that there will now be strong calls for another referendum on Scottish independence.

Yet another remarkable consequence of the vote was the sudden way in which David Cameron's premiership ended. After 6 confident years he was one of the longest serving Conservative leaders of recent times and now he has gone. Despite some calls to the contrary it was his only honourable course of action - and how unappealing would it be for him to spearhead the details of the British withdrawal?  The bookies are predicting that he will be succeeded by Boris Johnson, another Etonian, a man without any semblance of a moral compass (see this evisceration) and one of the leading campaigners of the Brexit movement.

All in all it is easy to conclude that there is disaster in all directions. But there may be light at the end of the tunnel. The UK certainly is in a poor place at present but it is at least crystal clear that the policies of the Tory government have utterly failed and, in the short to medium term, things will only get worse. So in time a new government will come to power possibly after a short period of Johnson at the helm. I think that Jeremy Corbyn will also not last very long - his heart is in the right place but he has completely failed to inspire his party or the country. The people have rejected the status quo and the policies of the establishment and I do not expect it to regain its grip on the political landscape. An inspirational leader will be able to work from a clean slate and possibly lead us to a fairer society.

I shall end with a question that is almost certainly to arise. The dire economic situation the UK will soon find itself in is going to make public opinion very volatile indeed. What is going to happen if, during the protracted process in leaving the EU, the pendulum of opinion swings back towards Europe? This seems a fairly likely scenario when it becomes clear that any trade agreement reached with the EU is necessarily going to be conditional on an agreement to have (like Norway) open borders. I think it is going to be hard to carry through to the end an exit from the EU if the UK people become more aware of what they will be losing. And, surely, before the door shuts it will be necessary to consult the people once again if they are happy with whatever trade agreements have been agreed to replace full EU membership.

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