Tag Archives: eu referendum

Brexit and the austerity paradox

Here’s a conundrum. I think it is widely understood now that at least one major factor for why the Remain side lost in the EU referendum campaign was that a significant number of people in the poorest parts of the country did not feel that they enjoyed any of the economic benefits of being a member of the EU and wanted to give the political establishment a bloody nose. There were certainly enough of those voters to make the difference between staying in and leaving the EU, given how close it turned out to be.

So if we’d spent the last decade investing in those parts of the UK and ensuring they saw greater economic renewal, more jobs and a higher standard of living instead of forcing austerity on them, driving up reliance on foodbanks and increasing human misery in the process, we wouldn’t now be seeing the sort of meltdown that we’re witnessing going on in the City right now.

Here’s the thing though. The City had made it perfectly clear that it wanted that austerity. Indeed, the City has quite a lot of form when it comes to threatening governments with economic hardship if it doesn’t get its way. During those infamous “5 days in May” in 2010 when we had no functioning government after the general election, the mood music coming from the Square Mile was grisly. The constant refrain, especially from the Lib Dems in the coalition, was that if we didn’t follow this path economic disaster would follow. I lost count the number of times that Nick Clegg and Danny Alexander over-egged the pudding and claim that we were on the brink of economic disaster on the scale that Greece has experienced over the last few years.

I can mock Clegg and Alexander, but the fact remains that there was some truth in this. The City was telling us to follow a course of action, and were threatening to punish us if we didn’t get in line. They had the whip hand, just two years after wrecking the global economy when you would have thought there would be a little more contrition.

In retrospect, I wonder: would the market have been able to cope with a little less austerity if what it got in return was the UK remaining in the EU? With the benefit of hindsight, I think the answer is yes. And yet here we are now, staring at economic disaster, with no political leadership in Westminster, and with the money men more in charge than ever. There is talk of sensibly abandoning austerity, but only because the economic case is pretty hard to dismiss (just as it was in 2007). And in the longer term, it looks like we’re going to be more dependent on the good will of the markets than ever. Far from having our sovereignty return from Brussels, it’s been punted a couple of miles down the Thames.

For several decades now, there has been an agenda to decouple politics from economics, with both politicians and business alike preferring to pretend that never the twain shall meet. There is only one economic model that works, and politics should focus on non-economic matters. So at the same time as we see all political parties becoming uncritical market capitalists, we see identity politics and nativism take hold. The reality is that the two are fundamentally intertwined. There are deep political consequences to economic decisions, which in turn can – and has – had fundamental economic consequences. Somehow, and I don’t know how, we need to create a greater awareness for how the decisions made on the floor of the stock exchange impacts daily life in Hartlepool. The alternative is a political system which continues to consume itself and drive itself increasingly to extremes, which in turn leads to economic ruin.

Brexit: if you think Corbyn is the problem, you haven’t been paying attention

I don’t think I’ve ever been as appalled by UK politics as I am at this point. That the Leave campaign won the referendum on a pack of lies is a fact in this post-fact world that even its own leaders have implicitly acknowledged by their equivocations, downcast faces and vanishing acts. We are in the midst of undoubtedly the worst financial crisis since 2008, and the level of racist attacks appears to have skyrocketed, but the political and media class have locked themselves into Westminster to focus on their intrigues and petty rivalries. The journalists I follow on Twitter have never been more delighted by the Tory and Labour leadership crises, pigs in shit blithely ignoring the outside world as if it was an unwelcome distraction from the main event. Only Nicola Sturgeon and Tim Farron have shown a shred of political leadership since Friday. It has been gobsmacking to watch, and utterly repugnant.

While acknowledging that it is part of the problem, I don’t feel I have much to add in terms of analysis of the current state of the Conservative Party. A bunch of overgrown schoolboys have played around in politics as if it were nothing more than a game, and now appear to be waking up to the fact that the stakes were in fact very real. I don’t know how it will all play out for the simple fact that I have consistently underestimated Boris Johnson’s ability to survive from political crises of his own making. I don’t have any analysis of why this is; I’ve never understood his charms I’m willing to accept at this point that there are supernatural forces at play here and that only a beheading, stuffing the corpse with garlic and burying it at a crossroads has any chance of stopping him being elected and remaining Prime Minister for the next 50 years. I mean, he survived that Boris Bus debacle – how bad does it have to get?

On Labour, I have a little more to say. It has become painfully apparent over the referendum campaign that Jeremy Corbyn simply isn’t up to the job. He is incapable of commanding respect amongst the PLP, incapable of thinking strategically, incapable of making a good speech and incapable of seizing a political opportunity when it lands on his plate. The problem is, leaving aside the facts that a) there is no guarantee that they will end up with someone more capable, and b) the party has demonstrated it is incapable of any degree of unity for years now, I don’t think you can look at those results last Thursday and conclude that Corbyn is even Labour’s biggest problem. What we witnessed was a party that was incapable of reaching out to its own core communities outside of the major metropolitan areas scattered across England and Wales.

I’m grateful to John Harris’s reportage from around the country, showing the depth of alienation and utter contempt that people in the poorest and most deprived communities across the country have for Westminster politics. What we saw on Thursday, was those people flicking Westminster a massive V-sign. Yes, a minority have fallen for the Brexiteers’ lies and even turned to outright racism. But for the most part, it appears to have been as prosaic as the fact that if large swathes of the country aren’t seeing the (very real, very significant) economic benefits that the UK enjoys from immigration, free movement of people and its membership of EU, they are likely to see very little downside to voting to get rid of it all. They’re wrong, and I guarantee they will come to regret it as the economy tanks and Westminster opts to force them to bear the brunt, but I can understand the feeling all to well.

That it has come to this ought to be a wake up call. To his credit, it seems pretty clear to me that Jeremy Corbyn understands this, and understands that without a significant and meaningful redistribution of wealth the mood in those communities is only going to turn uglier. But it is equally clear that a significant number of Labour MPs don’t and see the solution lying purely in triangulation. It is plain to see that for an awful lot of Labour politicians, the solution lies now in adopting a string of anti-immigration and anti-free movement policies regardless of the bad economic case – just as long as they don’t look as punitive and nasty as UKIP. We’re in the scary situation right now where it is becoming apparent that the Tories are now busily building the case for a Norwegian-style relationship with the EU – where we accept free movement, the imposition of EU regulation and pay roughly the same as we do now but get none of the democratic rights we’ve taken for granted – while what noises we have coming from Labour is that free movement is unacceptable to them. With UKIP now a very real threat in their heartlands, the triangulators are prepared to make the Tories look like wishy-washy liberals when it comes to immigration – presumably in the full knowledge that this will only encourage UKIP and the Tories to push even further to the right.

Triangulation is not a new thing – when it comes to economic policy, it’s got us in a lot of the mess that we now find ourselves after all. But when it comes to immigration, it takes on an all new terrifying dynamic. We’ve already seen that a scary number of racist individuals and groups have seen the referendum result as a starting gun for a campaign of terror and intimidation (again, to be clear, I’m not saying all Leave voters are racist – just that all racists are Leave voters who now believe 52% of the country agrees with them). Imagine how bad that will get if we start seeing the sort of Dutch auction on immigration policy being proposed belligerently by the likes of John Mann and in more velvet tones by the likes of Tom Watson.

And of course, it almost goes without saying that it is simply not the case that this is an automatic vote winner. The SNP haven’t hoovered up Labour support in Scotland by adopting an anti-immigrant position – quite the opposite. Where people do see the economic benefits of immigration, anti-immigrant sentiment is way down. It wasn’t Jeremy Corbyn who persuaded Islington, one of the most deprived boroughs in the country, to support Remain by 75%; it was the daily experience of living in an area with high immigration.

If Jeremy Corbyn had spent the last two months going around the country calling for England’s more deprived communities to better reap the economic benefits of the EU and immigration than they do at present (which to be fair to him he did say, sotto voce), then there’s at least a chance he could have turned it around. But it wasn’t just him. It certainly wasn’t a position being championed by Labour In – dominated as it was by centrists in the party. And while Jeremy Corbyn voluntarily gave up his opportunity to share platforms with David Cameron and use it to press him on this matter, it was the position of all the candidates who stood in last year’s Labour leadership election to adopt the same self-defeating no-platform policy.

I’ve been talking about Labour, but to be frank, this is the Lib Dems’ failing as well. While they don’t have the same platform in deprived northern communities that Labour enjoys, they too should have made this case. And if Tim Farron’s welcome stance to stand in the next election on a position of remaining a member of the EU is to reach out beyond the party’s metropolitan base, he too needs to be making the case for redistribution of wealth. This policy will prove a mistake if it ultimately amounts to little more than a plea for business as usual; the City has to be made aware that there is a price that it needs to pay.

Where do we go now? I have no idea. The whole situation is a bloody mess and while I’m sceptical that the markets can wait as long as Labour and the Tories want to get their acts together, we at least have a period during which the rest of us can allow the referendum result to sink in. I don’t think the United Kingdom is going to survive this. I wouldn’t especially begrudge Scotland for leaving us, and the only thing stopping me from saying the same about Northern Ireland is the fear of what might happen if the unionist communities there feel they are being abandoned to their fate. My hope is that the political system of what country remains will be able to crawl out of the quagmire that it is in now, but I’m very scared that the situation is going to get much worse, and much more violent, before we finally turn a corner.