Britain on The Brink

What leaving the EU might mean for Britain
by Gordon Campbell

Later this month, Britain will be voting on whether to remain in Europe, or take the exit door from the European Union and all its rules, obligations, and advantages. For now, many Britons are walking in circles, unsure about how to vote in the Thursday, June 23rd referendum. This post on the UK Political Scrapbook blog sums up one aspect of the public mood really well:

I know there are problems with the EU but can anyone properly explain what our plan is if we leave? We have all been on a night out with that mate who when you are in a club says “Its shit here, lets go somewhere else.” Then when you leave you realise he has no idea where to go and the place you left won’t let you back in. Without a decent follow-up plan, a leave vote could see the UK standing in a kebab shop arguing about whose fault it is.

Exactly. Amid the referendum noise, reliable signals on the lasting implications of the “Remain” and “Leave” options are scarce. Misinformation is rampant. If you believe Cameron and UK Chancellor George Osborne, Britain’s exit from the European Union would cripple economic growth, leave everyone ‘permanently poorer’ and spell curtains for the living conditions of ordinary Britons that Cameron has been trashing by other means for the past seven years. On the other hand, the Brexiteers maintain that victory for the “ Leave” option would actually stimulate economic growth, open up new export markets and – if you believe the Daily Mail – cause no more ripples on the pond than when Britain left the EU’s Exchange Rate Mechanism back in the autumn of ‘92. For the record, not everyone remembers that last exit from the snares of Europe quite so blithely. In fact, the verdict on the ERM exit has been just as mixed as the current ‘stay or go’ dilemma over Brexit:

The United Kingdom entered the ERM in October 1990, but was forced to exit the programme within two years after the pound sterling came under major pressure from currency speculators, including George Soros. The ensuing crash of 16 September 1992 was subsequently dubbed “Black Wednesday“. There has been some revision of attitude towards this event given the UK’s strong economic performance after 1992, with some commentators dubbing it “White Wednesday”……Britain’s membership of the ERM was also blamed for the prolonging of the recession at the time, and Britain’s exit from the ERM was seen as an economic failure which contributed significantly to the defeat of the Conservative government of John Major at the general election in May 1997, despite the strong economic recovery and significant fall in unemployment which that government had overseen after Black Wednesday.

So… clear as mud, on that precedent. It could be bad, but it could (eventually) be good. Or not, depending on whether you survive. There will be plenty of similar turbulence in the immediate wake of a Brexit, no matter what verdict the survivors get to deliver, 25 years down the track. Context is all. Back in the 20th century, this referendum campaign might have been fought in the language of class conflict – but this time around, the rhetoric has been all about national identity. The Brexiteers are not (quite) using the language of Donald Trump, but they are promising that “ “Freedom” from Europe will somehow make Britain “ Great” again. Trouble is, the days when Great Britain had real clout in the world are long gone, and they won’t be coming back.

Similarly, the “United” Kingdom is also a relic of history. For the first time ever in Britain, as Professor Vernon Bogdanor recently pointed out, different political parties now hold the majority in each corner of the “United” Kingdom. The Scottish Nationalist Party has a majority in Scotland, Labour in Wales, and the Democratic Unionists in Northern Ireland – while in England, the majority party is the Conservatives, who managed to win only 27 % of the vote in Wales in last year’s general election, and earned a miserly 15 % of the vote (and one MP) in Scotland. Bogdanor’s point being, Britain is now a divided multi-national state, and not an island nation capable any longer of a common sense of purpose with respect to Europe, or anything else.

This identity crisis in Britain cannot credibly be blamed on the influx of Polish plumbers or waves of Muslim migrants or the machinations of Chancellor Merkel and her cronies in Brussels. The causes of the national malaise are more complex – even for voters who think a “Leave” victory for will somehow recreate a misty medieval Avalon, albeit one that’s ruled this time around by currency traders from the City. Did England Make Me – as the hard right Tory Eurosceptics believe – or has Europe Made England, from 1066 onwards, and forever more?

The current links between Britain and Europe are practical, as well as geographical/cultural. Right now, 44 % of British exports go to other EU countries. Exiting the EU will not only require finding magical access to a whole array of new markets with similar entry provisions almost overnight. A Brexit will not turn off the tap of immigration, either. If anything, a Brexit is more likely to shift the immigration doorstep from Calais to Dover, and bring the border enforcement problems right back home.

The existential dilemma involved in deciding which way to vote is real enough, though. Any contest where the captains of the rival teams are David Cameron on one side, and Boris Johnson on the other has to raise suspicions that the entire tournament has been rigged. In that respect, having Cameron and Tony Blair as its key strikers certainly hasn’t helped the “Remain” team to win the allegiance of the wider public.

By general consensus, the “ “Remain” campaign has been ineptly run. The concessions for Britain that Cameron recently wrung from the European Union after three years of negotiation have barely featured in the referendum campaign. Also… at time of writing, Cameron was refusing to publicly debate the Brexit issues with Boris Johnson or Michael Gove, the de facto leaders of the “Leave” option. That’s an own goal, right there.

Until very recently, the opinion polls hadn’t been helpful in clarifying the state of public sentiment. The poll results had been sharply divided.

Online polls have shown this to be a neck and neck contest, while telephone polls had consistently shown the “Remain” vote with a clear advantage. Interestingly though, the “Leave” position has been raising far more money of late:

The campaign to take Britain out of the EU raised more than twice as much funding in recent weeks as its Remain rivals. Leave organisations received £4m between April 22 and May 12, according to data published by the Electoral Commission, compared with £1.6m for Remain campaigns.

This more than 2 :1 spending advantage is now being reflected in the combined phone and online polls, which show the “Leave” option surging into the lead this week, for the very first time.

This trend also suggests that while the Leave campaign is being driven publicly by the rhetoric of “Freedom” and by clarion calls about British national identity, the corporate donors funding the “Leave “ campaign are sensing an opportunity to free themselves from EU labour rules and human rights laws, and are putting scads of money behind that noble cause. More on that below.

The existing evidence for the two scenarios on offer ?

1.Brexit Would Be Disastrous for Britain’s Economy. Any number of leading economists – 88% of the 600 polled by the Guardian – agree that a Brexit would be economically damaging.

Some 82% of them also think Brexit would have a negative impact on household income. Plus:

The poll also found a majority of respondents – 57% – held the view that a vote for Brexit on 23 June would blow a hole in economic growth, cutting GDP by more than 3% over the next five years. Just 5% thought that there would probably be a positive impact. The economists were also overwhelmingly pessimistic about the long-term economic impact of leaving the EU and the single market. Some 72% said that a vote to leave would most likely have a negative impact on growth for 10-20 years.

Personally, whenever 600 economists agree on anything, I tend to feel suspicious about the wording of the questionnaire. It is also unfortunate that the Guardian didn’t ask its legion of economists for their views on the impacts that the Cameronian status quo is having on household incomes, economic growth prospects over the next 10-20 years etc. etc. In this ‘lesser of two evils’ dilemma, it doesn’t help that a victory for the ”Remain” option will inevitably provide a boost for Cameron, and be treated as a validation of the Cameron/Osbourne approach to economic policy. It shouldn’t, but it will. Meaning : the options for centre left voters are bleak. Like the Conservatives, the British Labour Party is reportedly split over Brexit. No surprise about that.

2. Brexit Would Make Little Difference to Britain’s Economy

Also not surprisingly, the reliably conservative Daily Mail has swallowed the “Leave” capsule, along with the rest of the Eurosceptic Tories parked to the right of Cameron. Less predictably, the Mail columnist making the best case for the minimal/positive impact of a” Leave” victory has been Alex Brummer, until recently a pro-EU journalist. Brummer’s magnum opus in favour of the “Leave” option can be found here, and is worth reading. To repeat : as Brummer argues, Britain crashed out of from the EU’s Exchange Rate Mechanism in ’92 amid similar predictions of doom and – apart from a Tory election loss and a spasm of financial carnage – Britain survived the experience. Feeling encouraged, much? Here is Brummer’s confessional explanation for his change of stance on matters European:

As a financial journalist who has chronicled the ups and downs of the Square Mile for more than 40 years, I admit that I have broadly been a supporter of the European project — largely because it has kept the peace after the horror of the two world wars, and because sensible trade co-operation ought to benefit us all. But increasingly I have come to despair at the economic and financial folly of trying to knit 27 diverse economies and political systems together. Indeed, the more I witness the stifling economics of the EU, the financial incompetence of the Eurozone, the fetid state of the European banking system and its sloppy and ill-conceived decision-making, the more convinced I have become that Brexit — leaving the EU — is the right thing for the nation and the City.

Because of the global status of the City of London, I believe we would not only survive financially outside Europe, but thrive…

There is an interesting piece of footwork involved here. With protestations of regret, Brummer is blaming Europe for the refugee/migrant crisis, and wants Britain to cut and run from problems to which Britain has been an integral cause. Europe’s current refugee crisis for instance, can be traced back in a straight line to the Bush/Blair invasion of Iraq in 2003. There is something equally peculiar about criticising the “stifling” austerity economics of Europe, while embracing the “Leave” option as an opportunity to practice those same stifling policies even more enthusiastically at home.

Here’s Brummer again:

Only yesterday, the Mail reported that the Organisation for Economic Co-operation and Development (OECD), the world’s top economic institute, believes it is Europe rather than the UK whose financial health is currently at risk. The refugee crisis, the lack of market reforms across the EU and the economic stagnation generated by the austerity policies of the Eurozone are damaging Europe as a trading bloc and destroying business investment, it said. Meanwhile, the OECD forecasts that Britain’s financial growth, with the rock-solid foundation of the City behind it, will, at 2.1 per cent, outstrip that of France, Germany and even America this year.

Grand. Well, if the “Leave” option prevails, we will find out soon enough just how “rock solid” those foundations of the City really are. (Its always risky to equate an uptick in the business cycle with national destiny.) Moreover….after decades of preaching the gospel of globalisation, it does seem a bit late in the day to be suddenly promoting the prospect of bountiful rewards from British going it alone.

For a vision of the new Thatcherism that’s been driving some of the corporate enthusiasm for Brexit, this report is hair-raising to read.

Apparently, everything from EU rules on gender equality to EU mandated redundancy payments to EU working hours legislation to EU measures to induce investment in renewable energy (to combat climate change) is in line to be binned, once Britain gains its “ Freedom“ and becomes a neoliberal, new-Thatcherite Nirvana off the coast of Europe.

3. Be Careful Of What You Brexit From.

Even though the opinion polls show the winds of poll momentum are currently behind the “Leave” option, this support is not evenly spread. This is likely to have consequences:

[If] the Brexit campaign wins [it will be] because a majority of English voters want out, while a majority of voters in Scotland, Northern Ireland and (less likely) Wales support remaining within the EU.

For its part, the Scottish Nationalist Party has been wary of being used as a pawn in the referendum campaign, especially to promote a Brexit backlash among English voters. Therefore, the SNP has said that Scotland would only be led by public opinion as to whether a second referendum on Scottish independence was eventually called for should the “Leave” option prevail on June 23rd. At best, this second Scottish referendum would then probably be three to five years away, an eternity in political time. All the same, a Brexit victory would give fresh impetus to the cause of Scottish independence. Instead of enhancing British unity, a “Leave” victory will therefore contribute to the process of British fragmentation referred to earlier. In a chain reaction, a Brexit will also then fuel the cause of republicanism elsewhere in the Commonwealth. Great Britain, it would seem, is currently in the throes of unmaking itself.

3 Comments on Britain on The Brink

  1. The Euro project has been badly damaged by the refugee crisis, the difficulty of integrating the Poor South (Greece et al) and the inability of Europe to create an armed force independent of Uncle Sams malevolent geopolitics (The Ukraine fiasco has hurt Europe badly and wouldn’t have happened had NATO disbanded.

  2. It’s not just the UK that’s “unmaking” itself. Donal Trump as presidential candidate, strikes in France, Greece and the flight of capital out of China are all signs of a lack of confidence in public institutions around the world. Brazil, Venezuela in S America are other disrupted countries. The UK’s particular problems are merely symptomatic of the much wider malaise, and basically the failure of neoliberalism and its corporatist and globalising ethos. It’s my belief that the UK will opt to stay within in the EU, with a similar result to Scotland’s referendum result. But really it’s all pretty irrelevant, the world-wide issues are not going to go away, and a huge crisis of confidence is looming – another 2008, but this time ten times worse.

  3. Was talking about travel with someone here in California this week and when I mentioned that I’d lived in London but never went to Europe, she replied, “But isn’t England part of Europe?”

    It made me realise that people like me, for whom the UK was the “Home Country,” have never considered it to be part of Europe–for geographical and cultural reasons–but the rest of the world sees it as such for much the same reasons, ie, it’s in the same general area and inhabited by Europeans.

    To the world outside of the UK and Europe, the whole Brexit thing is very puzzling.

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