What have we learned in the eight days since Britain voted to leave the EU by a margin of 3.8 percentage points?
The country has jettisoned the foreign policy followed by all governments since 1961 yet the political class is paralysed even as the country drifts into dangerous economic waters. Put bluntly, nobody has a clue about how Brexit is to be achieved (or about what a ‘hard’ Brexit might involve). This is a moment of catastrophic political failure on a scale unprecedented in modern British history and it calls into question fundamental features of the country’s political system.
First, it is clear nobody has the slightest idea how the exit is to be accomplished.
Those campaigning for a Leave vote had no plan for how an exit from the EU might be achieved in a way that would not impose lasting damage on the country by crimping exports to countries that represent 45% of our overseas trade.
Astonishingly, no serious contingency planning had been put in place within Whitehall (it is not as yet clear whether senior Civil Servants as well as ministers are to blame for this). Whitehall, which I understand was in chaos before the referendum as it woke up to the real possibility of Brexit, is having radically to reconfigure and reorientate itself, though it lacks many of the skills demanded by Brexit.
So far there is no sign of clear real plan of action.
Second, many of the predictions of the much derided ‘project truth’ are proving accurate.
The pound has collapsed to a low not seen for 35 years – not a bad thing for exporters but a serious loss for international investors in our economy, and in our government’s debt, that may have consequences for their confidence in UK economic management.
There are serious concerns that the widespread economic uncertainty is leading to large scale cancellation of investment, creating the conditions for recession. Many large firms are already implementing plans to redeploy parts of their business and workforce to the Continent.
By any standards this is a very serious economic challenge. In the long-term, as Mr Carney said earlier this week, the economy will adjust but there are clear and large risks in the near- and medium-term.
Third divisions within British politics are paralysing the construction of workable solutions to the economic and foreign policy crisis.
- Leave campaigners had no plan partly because they did not really expect to win but mainly because they were themselves divided between those for whom control over immigration and protection for British workers was the overriding priority and those for whom free-trade was the main goal: aims that are irreconcilable without leaving the European Economic Area because membership of its single market is dependent on the acceptance the free movement of people as well as of goods and services within it.
- The Conservative party is similarly divided and as a result has embarked on a leadership election at just the time when, as the governing party, it should be concentrating on leading the country.
- Labour’s internal battle between the hard Left and its soft Left and Blairite remnants has reignited with a vengeance. Preoccupied with its civil war it is failing to fulfil its role as an Opposition party in Parliament. And the impasse between the party in Parliament and the leader and his supporters amongst the membership means the party may soon split.
- The only party with a clear policy is the SNP: which is clearly planning to use Brexit as the means by which to achieve independence, thus signalling the end of the United Kingdom as we know it.
- Profound divisions in Northern Ireland have the potential to reemerge in an ugly way as the division of Ireland becomes once again a physical reality.
Because of the political chaos there is almost no political leadership (George Osborne’s acceptance of the need for deficit financing to maintain growth notwithstanding).
Parliament has not properly debated the consequences of the referendum vote, and at present has no plans to do so.
At the moment we are essentially reliant on a lame-duck Prime Minister and on Civil Servants and the Bank of England to fill the policy vacuum. The Bank has risen to its challenge admirably, though its governor has warned of the limits to its capacity to keep the economy on an even keel. Civil Servants are plainly doing their best, but in the absence of a clear and politically legitimate steer on how to handle the crisis they risk being left politically very exposed if things go wrong.
Our politicians are clearly failing us.
This is about more than the mendacity of some unscrupulous politicians (on both sides of the referendum, though the winner of that inglorious competition was plainly Boris Johnson – a man for whom the linked concepts of hubris and nemesis appear to have been invented).
We have to acknowledge that the howl of rage that was the Leave vote said something about the politics of this country.
The plain fact is that the political system no longer adequately represents the interests of large swathes of the British electorate.
For many years the first past the post electoral system proved effective at forcing the two main parties to consolidate and mediate interests on both sides of the political divide, and ensured that the competing political visions that resulted were tested at the ballot box.
On the whole that system worked well in the quarter of a century after 1945 when between them the two main parties were taking between 87 and 97 per cent of the vote.
It began to work less well as substantial numbers of people began to lose faith in those parties and we first saw the rise of a significant third party (in Feb 1974, for example, the Liberals took nearly 20 per cent of the vote), then the creation of the SDP (in alliance with the Liberals in 1983 taking over 25 percent), then the rise of the SNP, the Greens, and, more lately the growing vote for UKIP.
One may not like UKIP, but the fact that it gained only one MP in 2015 with 12.6 per cent of the vote was clear evidence of the failure of the current electoral system to give voice to large numbers of people. So too was the fact that Labour hoped to win that election with a ’35 per cent’ strategy.
A system that can deliver a government opposed by 65 per cent of voters on a turnout of only 61 per cent (as happened in 2005) is plainly broken. We have turned a blind eye to this for decades; the Brexit vote has made that failure all too obvious.
At the same time, ‘Europe’ has proved a particular problem for the main political parties. Both have at times been fundamentally divided on whether to support membership of the EC/EU and over time the parties have reversed their positions. Only the Liberal Democrats have been consistently pro-EU, only UKIP consistently anti- – and look where that got them in terms of Parliamentary representation.
So we now have to ask serious questions both about the UK’s electoral system and about the ability of its two main political parties to mediate interests and consolidate them into policy programmes supported by a large proportion of the British electorate.
Last week I argued that today’s generation of politicians were facing a crisis akin to that of May 1940. I continue to think this.
The political challenge of unravelling Britain’s close political relationship is immense (people better informed than I estimate it will take a decade). At the same time Brexit poses a substantial economic challenge to an economy not yet fully recovered from the financial crisis of 2007-8.
Yet our politicians stand by. And it is the political vacuum that makes the situation so dangerous.
There will be a wealth of human misery caused by yet another recession. Many, particularly amongst those who voted Leave, will be disappointed further in their political representatives. Add that to the sense of disenfranchisement and the fear and xenophobia whipped up by the referendum and we have the making of something truly nasty.
In short, I think we need political action, we need it now, and we need it to be effective and enduring.
I continue to believe that this probably requires a rapid and significant realignment of British party politics around its centre and I am coming to the conclusion that it may also demand the reconfiguration of both its electoral system and representative institutions.