It is almost impossible to describe what a massive own-goal the Brexit vote is for the UK and especially England. It is probably the worst policy decision made by any major country since World War II. The decision has torn the entire fabric of the UK to pieces. Scotland and Northern Ireland are now in impossible positions; the Conservative party is cleaved in half; even the Labour party is in open revolt after the results. And the most vocal supporters of getting out of the EU now seem to be having second thoughts as they see the predicted carnage of their vote actually happening.
The Blame
Let’s be absolutely, 100% clear. The blame for this debacle falls squarely and completely on the shoulders of David Cameron. There was absolutely no need to call this referendum, especially when everyone knew how divisive it would be. But in order to feed his own personal ambition to get re-elected, he needed to keep the anti-EU forces within the Conservative party in the fold while also blunting the impact of the ant-immigrant UK Independence Party (UKIP). And his method for doing that was to promise a referendum on leaving the EU after he got re-elected in 2015. There was always a glaring weakness in that idea – he would have to rely once again on significant Labour support for the referendum to fail. Relying on your political opponents for your success is not usually a good tactic. Yes, his short-term strategy worked, he surprisingly won re-election and actually increased Tory control in Parliament. But that strategy completely failed on Thursday – Cameron has been forced to resign; his legacy is in tatters; and the UK and England may never be the same.
Of course, there is plenty of blame to go around. Boris Johnson and Michael Gove fed their own ambitions, abandoned the PM and hitched their wagon to Farage and the xenophobes, while running a pretty dishonest campaign overstating the negative effects of the EU and understating the fallout from exit. We can also throw the pathetic Nick Clegg in there who was the kingmaker way back in 2010 and chose Cameron over Gordon Brown, paving the way for the destruction of Clegg’s Liberal Democratic party, unnecessary austerity, and now the exit from the EU. The current accusations against Corbyn and the Labour party for not being as supportive as they should have been in supporting Cameron strike me as a little strained. You can maybe look back at the poor campaign of Ed Milliband that allowed Cameron’s re-election. But you can hardly blame Labour. Cameron had asked them to be the adult in the room and support him in keeping Scotland in the EU and what did Labour get for their efforts – just the destruction of Labour dominance on Scotland as it was replaced by the SNP and, without those Scottish seats, a probable permanent minority party status in the UK. So it is a pretty hard ask to ask Labour to fall on their swords once again, do the right thing, and support Cameron in staying in the EU. Their reward will be a more powerful Cameron who will ram more Tory policies through Parliament. It is not surprising that a significant share of Labour voters made a “protest” vote without really believing they would leave the EU. A similar point could also be made about EU leaders. Perhaps if they had given Cameron more when he tried to “renegotiate” the relationship earlier this year, this disaster could have been avoided. But, again, Cameron put those leaders in an untenable position, just as with Labour. If they had given him anything of substance, every other country would want to carve out a “special” deal too. Lastly, the youth. It was their future and they just did not turn out like they needed to. Take a look at this graph that Kevin Drum had about the age breakdown of turnout and votes:
But, in the end, this is David Cameron’s failure. His hubris to win the 2015 election led to the destruction of the UK and his own political career and legacy. It is a Greek tragedy.
The Future For the UK
It is pretty clear that leaving the EU will mean the breakup of the United Kingdom. Scotland will vote to become independent and remain or rejoin the EU. Boris Johnson may say he sees no need for a new Scottish referendum but it will happen somehow – maybe not right away but, if the Scots are forced to leave the EU, it will happen. Northern Ireland is in a somewhat similar position and there will be great pressure for it to join a united Ireland and remain in the EU. This will place the Protestants in Northern Ireland in a difficult position and, whatever happens, probably exacerbate the sectarian tensions that are always just bubbling below the surface there. It will not be pretty. Wales voted to leave, but when they realize that Johnson and the Tories have neither the capability or the inclination to match the loss of current EU subsidies to rural areas like Wales, their tune may change. I would also throw in that Gibraltar’s status could also be in doubt as they voted to remain and rely heavily on Spanish labor and EU trade.
This would pretty much just leaves jolly old England. It will definitely be old but I’m not sure quite how jolly it will be. It is more than ironic that the areas of England and Wales that received the most EU subsidies voted to leave. Conservative estimates are that leaving the EU will cost about 2% of GDP annually and the uncertainty of the long drawn-out negotiations to leave will probably make that impact even greater. Almost the very moment that Boris Johnson was noting in his victory speech that the UK had the fifth largest economy in the world, the crash of the pound and stock market had already reduced it to the sixth largest. If Scotland and Northern Ireland leave, that represents about another 10% of UK GDP gone and would leave England fighting with the emerging giants of India and Brazil, along with Italy, for the last three spots in the top ten of world GDP – still a powerful economy but a much weaker one. In addition, the idea that the EU is going to make things easy for the UK to leave just does not seem credible – they will extract a heavy price. Despite what Boris Johnson says, there is no way the EU is going to let the UK end up like Norway with free access to its markets without the EU responsibilities. The EU will want to make an example of the UK in order to send a signal to other EU members that leaving will be difficult and painful.
The financial power of the City in London will also be significantly weakened. All the major international banks will have to increase their presence in some financial center in Europe in order to have access to the EU and every job that moves is one less job in London. Already, HSBC is announcing a move of around 1,000 jobs out of London – that is just the opening of the floodgates. .
Politically, this could also result in a complete realignment in British politics. We have already seen a Conservative-Labour coalition emerge in the vote for Scottish independence and on the Brexit vote. Many of the remaining Labour strongholds in the North voted to leave although not necessarily by significant margins. Meanwhile, there is a significant bloc in the Conservative party that also voted to remain. It is quite possible we could end up with an anti-immigrant, anti-EU, nationalist party combining UKIP and Tories and a pro-EU, more liberal party of disaffected Conservatives and Labour.
The next few months will give the Johnson/Gove alliance a chance to lay out their vision for the future. They managed to advocate for leaving without having to articulate what exactly the way forward would be. My understanding, which could be incorrect here, is that they are looking kind of like a right-wing Republican dream – massive deregulation and probably more tax cuts that will fuel enormous growth. The same old supply-side story which always ends in more debt and slower growth. I’m not sure that is what the leave voters actually have in mind but it may be what they will get. And, if that does turn out to be the case, England may end up looking rather like Kansas. Rural voters, in total fear of these supposed waves of immigrants who barely even exist in their communities, vote against their best interests and endorse policies that make them even poorer. And without the EU subsidies to those rural areas and the increased cost of trade, they will be even poorer still.
Finally, a real question is what will happen with the youth of England. Although they might not have voted in enough number, it is pretty clear that they overwhelmingly supported remaining. Will they leave in droves, creating an even bigger drain on England’s finances and ability to grow.
However you look at it, the future looks pretty bleak. Yes, it will not be a new depression. But, like austerity, it is just another unnecessary self-inflicted injury that will make everyone’s life more difficult and slightly worse off.
The future for Europe
The Brexit vote is a huge shot of adrenaline to the anti-EU forces all over Europe. The xenophobic right in France, Netherlands, Austria, and elsewhere will all push even harder to leave the EU and it will become increasingly harder to stop them. The only hope is that the EU elites take this as a wake-up call and actually try to mitigate some of the damage that the economic policies of austerity have created. In addition, they are going to have to do something to deal with the perception of massive uncontrolled immigration that the right feeds on. And clearly the responsibility for moving these changes along lies with Angela Merkel. She needs to finally step up to the plate and start spreading the German wealth around, helping the southern countries like Greece and Spain to recover much more quickly than the current path they are on. That may mean actually forgiving some sovereign debt. It will not make her popular in Germany, but it may be the only way to actually save the European project. Unfortunately, nothing she has done in the past indicates she is capable of that kind of leadership. The other rather sad possibility is that the damage that the UK economy endures by leaving is so bad that it actually makes other EU countries more reluctant to leave. What a grim irony that would be.
Regrexit
Already, the leave side is retracting many of the “promises” made during the campaign. They have admitted the 350 million pounds per week that they said the UK sends to the EU is less than half that. And the promise to take those monies saved and invest them in the NHS has also been hedged. UKIP supporters that thought they were voting for a virtual ban on immigration are now finding out that the goal is merely to have “control over roughly who comes in and roughly in what numbers”, as per Tory MEP Hannan. Cameron has reneged on the promise to invoke Article 50 which officially sets the leave negotiations in motion and is now leaving that step up to the next PM. Tellingly, there has been no push from Johnson, Gove, or Farage to actually invoke Article 50. Nicola Sturgeon has indicated she may have the Scottish Parliament veto the decision which could cause a huge constitutional crisis whose result is unclear right now. In any case, Scotland will have the opportunity to reject whatever agreement is worked out between the UK and EU. The chaos and disaster that was predicted if the UK voted to leave has actually come to pass and millions are apparently rethinking their vote. The next battleground for this issue will be election of the next Conservative leader – it will be interesting to see if anyone runs against Johnson specifically to stay in the EU. After that will come the general election. All of these are long-shot chances to somehow reverse this incredibly wrong-headed decision. But we have seen stranger things than that happen when it come to the EU politics.
