By Nathan Tipping
With the activation of Article 50 in March, Britain has set in motion a series of events that will define the country for the foreseeable future. Theresa May’s government now faces the challenge of reconciling the relentlessly optimistic image of Brexit Britain painted by the Leave campaign with economic reality. May’s government is complicit in this of course — so far it has chosen to avoid publicly discussing the upcoming challenges, instead adopting the Leave campaign’s unabashedly sunny outlook. This is an effective strategy in the short-term, but Leave voters may soon find that Brexit will fail to deliver the prosperity they were promised.
In the lead-up to the referendum, the Leave campaign lacked a clear, unified vision of Brexit Britain. This was not necessarily a bad thing when it came to persuading voters, as it made pinning down the facts far more difficult. It has become a problem, however, now that the Leave campaign has won. The Leave campaign can be divided roughly into two camps: economic-nationalists and libertarians. The economic-nationalist camp argued for Brexit chiefly on the basis of sovereignty, immigration, and the perception that the UK gave away more than it received. The libertarian case for Brexit, and arguably the far less mainstream view, posited that the EU restricted British trade with the rest of the world, and that leaving would see Britain regain its status as a global trading power. The issue faced by the current Conservative government is that its ministers fall within the latter category, with their planned economic trajectory for Britain being radically different from those within the nationalist camp.
Immigration is one issue where the government will struggle to find a balance between economic concerns and public sentiment. In the lead-up to the referendum, the Leave campaign vociferously publicised the fact that 320 000 migrants were entering the UK each year, around half of which were from the EU. This figure was employed with particular success in working-class areas, where fears of mass immigration were tied to concerns about wage repression. During a television debate in March, however, Brexit secretary David Davis stated that ““Immigration will rise or fall, depending on demand” — clearly in line with his own libertarian vision. This is, admittedly, a sensible policy. Yet with over 80 percent of the British public believing that the current levels of immigration are too high, this is unlikely to please the majority of voters. To those that oppose immigration on the grounds that EU workers depress wages, Davis’ flexible vision of migration policy risks being seen as a betrayal of the Leave campaign’s promises.
One of the most pressing issues for the current government, and likely its achilles heel in the years to come, is the issue of trade deals. In the lead-up to the referendum, many prominent Brexiteers presented trade deals as something fairly easy to obtain. Free from the EU, they argued, Britain would reestablish itself as a great trading nation, making deals with the BRICS and Commonwealth countries, whilst maintaining an amiable relationship with the EU. Their spirits were not even dampened when Britain’s most senior civil servant in Brussels argued that a satisfactory trade deal with the EU could take up to 20 years to achieve, shortly before he resigned. The danger here is not just that Britain will fail to achieve a satisfactory trade deal with the EU, but that it will crash out without any deal at all — an economically devastating scenario far removed from what voters were promised.
In the case that trade negotiations head for the rocks, Chancellor Philip Hammond has implied that he is willing to radically change tack. To remain “competitively engaged”, Hammond is willing to abandon the traditional European social and economic model in favour of a low-tax, low-welfare economy with a highly flexible workforce. For many Leave voters, becoming the ‘Singapore of Europe’ will be far-removed from the previous vision of Brexit. The prospect of further relaxing regulation on working hours whilst restricting the power of unions will be popular with government ministers. But as opportunities for stable, long-term employment have come to be increasingly sought after, these changes are unlikely to fly with vast swathes of the population.
Under the pressure of an intense and divisive referendum campaign, both sides played fast and loose with the truth. Ironically, for many Leave campaigners their victory is now their greatest weakness, as it appears increasingly unlikely that their promises will align with economic reality. The next few years will be challenging for the British economy, and could potentially prove disastrous. What remains to be seen is whether the frustration that fuelled Brexit will be channelled towards those responsible for it, or whether Leave campaigners will find another scapegoat to pin Britain’s problems on.
By Nathan Tipping