THE GAMBLE THAT IS BREXIT

To the bemusement and dismay of most of its friends in the world, and much of its own population, Britain has voted to leave the European Union. It will take years for all the effects to be felt, but the immediate consequences for the British are a change of Prime Minister and a looming constitutional crisis. Anti-EU sentiment in the rest of Europe has been strengthened, with calls for other countries to hold ‘in-out’ referendums stirring fears that the union may begin to break up. As for the rest of the world, stock market falls indicated the economic uncertainty that is likely to prevail for some time.

Why did a slim majority of British voters choose to go against the advice of their own Prime Minister, all his living predecessors, every international and most British economic institutions, major employers and the leaders of all the country’s principal allies? Many of the reasons were narrowly domestic, reflecting divisions in both of the largest political parties, the Conservatives and Labour, but there are lessons for other nations as well.

Above all, this was a vote by the ‘left behind’: the millions of Britons whose living standards have barely improved since the financial crash of 2008. Though gradual recovery has followed, most of the benefits have gone elsewhere, in the form of swelling asset prices and executive salaries. Globalisation has had similar effects across much of the West, giving birth to an angry populism that – in the light of this result – must make a victory by Donald Trump in the November US presidential election seem more possible.

Voters lashing out because of a sense of powerlessness can do most damage to themselves. There is little doubt that in some deprived British areas, the arrival of more than a million EU workers under freedom of movement rules increased the desire for ‘Brexit’. Paying more in taxes than they claimed in benefits, these migrants were actually helping the British economy grow faster than the rest of the EU, and the disadvantages suffered by local people owed more to the austerity policies of the British government than Brussels. But the desire to deliver a blow to distant elites outweighed any evidence, or consideration of the effects of leaving the EU. Some of the strongest ‘leave’ votes came in areas which had seen little immigration, and were more dependent on EU subsidies than the rest of the country.

In due course the referendum result is likely to trigger the breakup of the United Kingdom. Not only is Scotland, which voted more than 60 per cent for ‘remain’, certain to demand another referendum on independence, there have been calls for a united Ireland in the wake of the Brexit result. Facing the prospect of border controls with the Irish Republic, and fearful of possible damage to its peace process, just over 55 per cent of voters in Northern Ireland supported remaining. Separatists from Catalonia to Kashmir could be encouraged as Britain discovers the implications of its decision.

 

Economically, Brexit is a leap in the dark. The ‘out’ campaign focused on immigration and misty rhetoric about ‘sovereignty’, while waving away the detailed arguments of the ‘remain’ camp that withdrawal from the world’s largest trading bloc of over 500 million people would leave the British economy smaller and poorer. The warnings of Asian and other leaders that Britain attracted foreign investment because of its EU membership went unheeded. Many fear that there will be an angry reaction as ‘leave’ voters find that the promises of a better future outside the EU prove undeliverable, and that instead jobs are lost.

 

It will take some time for Britain to disentangle itself from 43 years’ worth of European commitments, and for the economic, political and diplomatic implications to become clear. But the cause of international co-operation has suffered immediate damage. The international economy, nervous about issues such as faltering US growth and the Chinese debt mountain, can ill afford turmoil in Britain, the world’s fifth-largest economy – though it may not remain so if the predictions of those urging Britain to stay in the EU come to pass.

 

During the referendum campaign the Brexiteers dismissed those predictions, claiming that some short-term economic pain and job losses would be worth it in the long run. If Britain voted to ‘take back control’ of immigration, of its borders – of its destiny – the nation would prosper, they said. But it is already clear that they may have unleashed forces they cannot control.

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