uk's exit from the eu: brexit

BREXIT: TRIUMPH OR CALAMITY?

Professor dr. Brendan McSweeney,Royal Holloway, University of London

AN ACCIDENTAL OUTCOME

• The referendum was called by the UK Prime Minister to appease a cabal of xenophobic/lost-empire-lamenting MP’s in his own party.

• Previously called ‘the bastards’ by UK Prime Minister John Major.

• BREXIT was not the outcome intended by Cameron. He (and just about everyone else) thought Remain would win.

• Neither Remain or Leave camps had plans for anything else.

• For the Government there was no Plan B and for BREXITERS there was no plan A.

THE EU HAS BEEN GOOD FOR THE UK

Many Remainers did not dispute that the EU had unsatisfactory features, but they believed that a post-Brexit Britain would retain many of these; would destroy of the attractive ones; and create a host of additional problems.

WHAT PERCENTAGE VOTED FOR 1. HARD BREXIT? 2. TO LEAVE

EURATOM?

0% - the decisions were not on the ballot paper.

WHO voted remain/leave

?

THE “WILL OF THE PEOPLE”?

• Only 37% of the electorate voted to leave the EU.

• A majority of voters in Northern Ireland, Scotland and English cites such as London, Cambridge, Canterbury, Liverpool, Manchester voted for Remain.

• .

WHO COULD VOTE

• British: Most, but not all, British Citizens

• Non-British: Commonwealth citizens from 54 countries - including Australia, Canada, India, Pakistan and Nigeria - could join the electoral roll as long are they were residents in the UK (approx. 1 million).

• Citizens from other European countries - apart from Ireland, Malta and Cyprus – resident in the UK did not get to vote (approx. 3 million)

• 16-17 year olds; • a large tranche of British

expatriates;• All three categories above

could vote in the Scottish independence referendum.

WHO COULD NOT VOTE

A GERRYMANDERED VOTE

COULD VOTE• An Australian on a two

year working holiday in UK

• My Dentist: Dutch citizen; 20 years in UK; employs 10 people; pays substantial amount of personal and business tax

COULD NOT VOTE

SO, FOR EXAMPLE …

MORE SEGMENTATION

No Gender division, but there were ethnic and religious divisions were, and these were fractured

• Two-thirds (67%) of those describing themselves as Asian voted Remain

• As did three-quarters (73%) of black voters.• 7 (seven) in 10 (ten) Muslims voted Remain.• Nearly six in ten (58%) of those describing

themselves as Christian voted Leave.

• Source: Lord Ashcroft Pools.

STILL MORE SEGMENTATION

• Amongst Leave supporters there was an ideological division between uber-nationalists (anti-immigration; protectionist) and numerically a much smaller portion of globalist libertarians (e.g. The IEA) who believed the opposite - that the EU was constraining globalisation and free markets.

• The marriage of these strange bedfellows will not survive long. The influence of the latter is likely to be overwhelmed by i. the dominance of the former amongst leave supporters AND 2. the geopolitical move to protectionism thanks to the election of Donald Trump.

REMAIN ALSO A COALITION

• Remain voters were united in rejecting the aggressive nostalgia and nationalism of many Leavers and, even if critical of aspects of the EU, in believing that BREXIT would be much worse

• Although most Remain voters are cosmopolitan, they are divided into (i) those indifferent to the adverse effects e.g. on traditional jobs and the creation of greater inequalities, of ‘globalisation’ and (ii) those who were unhappy with/opposed these effects.

• Indeed, the great majority of those publically calling for, or campaigning for, a less unequal society even before the referendum campaign, were Remain supporters.

• The Leave campaign, however, labelled/labels ALL Remain supporters as being of, or supporting, the ‘elite’.

• There were/are ‘people of power’ indifferent to the plight of those ‘hung out to dry’ on both sides.

• LEAVE – INDIFFERENT REMAIN - INDIFFERENT

• LEAVE – CONCERNED REMAIN - CONCERNED

UNQUANTIFIED SEGMENTATION

• Degrees of stupidity?• Extent of naivety“An irate local farmer told me he voted to leave as a protest against EU bureaucracy that delayed payments of his subsidies. He thought Defra was an EU department. He didn’t realise it was The Department for Rural Affairs and that the EU had fined our [UK] governmental department for its incompetent administration of subsidies” (The Independent, 2 February 2017)On the BBC’s Question Time a woman stated that she had changed from Remain to Leave because an EU regulation now required all bananas to be straight. No such regulation exists – it was one of the many falsehoods from the Leave campaign.

NO SINGLE EXPLANATION – BROADER THAN THE ‘LEFT-BEHINDS’

• The Leave vote was most concentrated amongst those with the least economic resources. HOWEVER, almost half of those who said they were ‘doing all right’ financially and almost 40% of those describing themselves as ‘middle class’ also voted for Leave.

FALSELY BLAMING THE 65+

WHY?

1. MISINFORMATION• Decades of anti-EU propaganda• Equivocal Labour Party leadership – Corbyn – a closet BREXITer• Cunning, Dishonest, Leave campaign• Inept, Visionless, Remain campaign2. ECONOMIC ALIENATION• Peripheralisation by 1. internationalisation; 2. technical

change/automation plus 3. continuity of neo-liberalism since 1979 – but blamed on Europeanisation

• Failure to acquire skills/qualifications• Despair – nothing to loose• Giving ‘them’ a good kicking3. AN ENGLISH DELUSION• A crisis of identity resulting from a failure to come to terms with the

loss of empire • Aggressive nationalism• Intense nostalgia• Hubris

1. MISINFORMATION

NEWSPAPERS

INDIVIDUALS TEND TO BELIEVE PROBLEMS ARE MORE PRONOUNCED

NATIONALLY THAN IN THEIR LOCAL AREA .

2. ECONOMIC ALIENATION

Many who did well out of globalization – often with little justification - paid far too little attention to those who did not.Financial institutions and subservient politicians created a financial crisis – but they have not suffered the consequences

UK WAGES

• Since the global financial crisis, real wages have fallen in the UK.

• Over 2007-15 the drop has been 10.4% - the worst, along with Greece, among the leading OECD countries.

• By 2015 around 20% of jobs in the UK are paid less than the voluntary living wage.

• In UK 800,000 workers are on zero-hour contracts – increasing by 100,000 per annum.

• Over the same period in Germany real wages have risen 23%.

• The OECD average is 6.7% growth.

3. AN ENGLISH DELUSION

To reduce the referendum result to “ a howl of pain at austerity” ignores

the reality that another major category of ‘leave’ voters was the

xenophobic affluent, predominantly English, middle class.

SIGNIFICANCE OF AFFLUENT EUROSCEPTICS

EUROPHOBIA IS A SPECIFICALLY ENGLISH PSYCHOSIS

"I get down on my knees every night and thank God for making me an Englishman. It is the greatest honour He could bestow. After all, he might have made me a chimpanzee, or a flea, a Frenchman or a German!"

ULTIMATELY DESTROYED BY WAR DEBT AND THE US AFTER WWII

BUT THE PSYCHIC LEGACY OF EMPIRE HAUNTS THE ENGLISH TO THE PRESENT DAY,

IN THE ILLUSION OF GREATNESS AND ITS RIGHT AND CAPABIL ITY TO PLAY A MAJOR

GLOBAL ROLE

• The UK has “the finest intelligence service, the bravest armed forces, the most effective hard and soft power ...” Theresa May, February, 2017

WHAT HAS HAPPENED?

• Decline in value of GBP• Rise in prices of imports• Increase in xenophobic attacks• Damage to UK image for tolerance• Demoralization of many in UK’s 3 leading

sectors: Arts, Universities, Finance Industry• Demotivation of professional class which

ironically will be required to implement BREXIT.• Reduction in applications by EU students• Fewer EU applicants for UK specialist jobs• Rise in applications for ancestral passports –

including Jews seeking German passports• Increased dismissal of experts’ views• Threats to leave UK by a range of firms• Reduced levels of investment• Utterances of extraordinary ignorance of basics

of law and trade from BREXIT aristocracy e.g. Ian Duncan-Smith and David Davies.

UPSIDES?

• For those not paying from GBP funds – cheaper fees!• That’s it!• But what about sovereignty?• “Parliament has remained sovereign throughout our

membership of the EU”, UK government’s White Paper, February 2017.

• The Leave aristocracy have continuously sought to prevent discussion and scrutiny of BREXIT by the UK’s parliament

WHAT MIGHT/WILL

HAPPEN?

• Are BREXIT (37%) and Trump (3m votes less than Clinton) sufficient evidence of new post-neo-liberal era?

• As in the 1930s, are we entering a new era of aggressive nationalism?

• This time the UK is comparatively much

weaker economically and politically and

• We know from history that aggressive nationalism starts with hope and ends in tears.

• It is impossible to predict with certainty what the outcome of the negotiations with the EU and other countries such as the US will be – will discussion take place in a benign, or a confused environment or with daggers drawn? And when will it happen?

• BUT based on what is known here are some of my predictions …

• Less, not more, international trade• More, not less, trade ‘red tape’• Dilution of employee, consumer, and environmental

protections• Higher prices – therefore lower real income for most• Diminished NHS• Greatly reduced FDI – attracting the rentiers; discouraging the

innovative• Tarnished image of UK as open/tolerant• A nastier, sadder, more divided place to live• Some hurried and disadvantageous deals e.g. with US• Travel restrictions to EU countries• Acceleration of break-up of UK• In short, prolonged chaos and inevitable decline: “Contrary to

the beliefs of some, free trade does not just happen”• Replacement of EU immigration with increased immigration

from Indian sub-continent and Africa?• Major splits within Conservative and Labour parties?• Reemergence of sectarian violence in Northern Ireland?

RARELY HAS THERE BEEN SUCH A CONSENSUS AMONGST

ECONOMISTS, AS THERE IS ON THE DAMAGE BREXIT WILL WREAK ON

THE UK ECONOMY

BUT WON’T THERE BE A HUGE REDUCTION IN WITHIN COUNTRY ‘RED TAPE’?: NO –

EXCEPT OF EMPLOYEE AND ENVIRONMENT PROTECTION – AND TRADE ‘RED TAPE’

WILL MUSHROOM

BUT THE WHITE PAPER SAYS THAT THE UK WILL “PROTECT AND ENHANCE WORKERS’ RIGHTS

• I don’t believe this. Why not?

• 1. Why have they not done so before?, and

• 2. This is what leading BREXITers have said in the past: “British workers are the worst idlers in the world. Once they enter the workplace, the British are among the worst idlers in the world.” Elizabeth Truss, Secretary of State for Justice and Lord Chancellor and Priti Patel, Secretary of State for International Development

• But ‘Change Britain’ claims that leaving the EU and striking trade deals with eight countries/blocks would create 400,000 new jobs in the UK.

• In short, this claim (and the report) is garbage – deeply ignorant and deliberately misleading.

• See: https://www.theguardian.com/commentisfree/2017/jan/03/brexit-create-4000000-jobs-economist-change-britain

BUT AFTER BREXIT WON’T THE UK BE ABLE TRADE WITH THE REST OF THE WORLD?  

• Myth that the EU constrained UK exports: For 43 years the UK has been a member of the EU which has just concluded a free trade deal with Canada, has dozens of multilateral and bilateral trade agreements, boasts the United States as its top trading partner, takes some 44 percent of British Exports, and accounts for 22% of world economic output. Pretty global.

• “Global Britain” is baloney (realitätsblind) from Theresa May in Wonderland.

• Weak foundations: There are fewer than 2000 factory establishments employing more than 200 workers in the UK. The average manufacturing firm employs less than 10.

The fault is not in those stars, but in ourselves (with apologies to William Shakespeare)

WHAT ABOUT A US-UK TRADE DEAL?

What is it about ‘Buy American, hire American, America first” that the BREXIT cabal don’t understand?

• Donald Trump has rejected one of the few things that neocons, realists, and liberal internationalists have agreed on: that the global economy is not a zero-sum competition, but a mutually beneficial growth system built on open trade and investment.

• His views on economic policy – and international relations more widely (views he has consistently expressed since 1987) is close to that of Charles Lindbergh and the American Firsters’ 1940s admiration for dictators and the mercantilist and isolationist policies.

• The fantasy US-UK ‘special relationship’ will not change that.

A RAPID AND FAVOURABLE US-UK TRADE DEAL WOULD NOT COME

CLOSE TO MAKING UP FOR LOSS OF FREE TRADE WITH EU - IN ANY EVENT THE DEAL WILL NOT BE FAVOURABLE

US-UK TRADE DEAL?

• Tariffs on EU (including UK) exports to US are mainly very low – so what would a bilateral deal achieve?

• Trump’s ‘America First’ has disincentives to remove/reduce these tariffs – given past history of US/UK deals (e.g. extradition) - it is possible that the UK will lower/remove tariffs on (largely agricultural) US produce with an unequal change from the US.

US-UK TRADE DEAL?

• Trade deals aren’t just about tariffs. Trade deals often seek to remove regulations.

Likely outcomes:• Removal of bans on importing (and use in UK) of:

crops sprayed with any one of 82 pesticides which are banned in the EU on health and environmental grounds; crops with more than maximum residue levels; chickens disinfected with chlorine i.e. end of hygiene from farm to fork; unlabeled GM crops; use beef and pork infused with synthetic growth hormones; livestock fed with animal byproducts. Unrestricted use of antibiotics.

• Accelerated privatization of the NHS• Emasculation of any UK industrial strategy• Other countries will demand same concessions

NOT THIS THIS

BUT SURELY A MAJOR UPSIDE WOULD BE GREATER EXPORTS OF UK

MANUFACTURED CARS TO THE US?

UK – EASY PREY

• A quick trade deal with the US would be trumpeted as the (re)arrival of the UK as a new trading partner on the world stage and a triumph for BREXIT, but …

• Even before the arrival of President Trump, the US had a record of making, quick deals - averaging one and half years of ‘talks’.

• That is, capitulation by the other side masquerades as negotiations.

• A quick UK-US deal would reveal and signal that the UK is easy prey.

• All of the evidence indicates that the BREXIT aristocracy, including the UK’s unelected Prime Minister, is prepared to sacrifice the economy (growth, jobs, etc.) to maintain political power.

AN ALLIANCE OF XENOPHOBES AND TURKEYS VOTING FOR CHRISTMAS HAVE PRESSED GANGED THE REST OF THE UK ONTO A SHIP OF FOOLS

BRITAIN – AN IDIOCRACY

FURTHER READING AND VIEWING

•Discussion forum in Socio-Economic Review (2016,14.4)–https://academic.oup.com/ser/article/doi/10.1093/ser/mww043/2896901/Brexit-understanding-the-socio-economic-origins

• Blood Meridian, Cormac McCarthy’s depiction of individuals who both relentlessly pursue their own self-enrichment, and yet regularly engage in actions that are both inexplicable and self-destructive.

• 1984, George Orwell• http://chrisgreybrexitblog.blogspot.co.uk/2017/02/

parlaiments-brexit-shame.html

• http://www.bbc.co.uk/news/uk-politics-38813629• http://www.mirror.co.uk/news/uk-news/tory-mp-ken-

clarke-tears-9728434• https://www.youtube.com/watch?v=EfqSFQlDae8