A compromise Brexit and a second referendum are both illusions. Mrs May’s ‘deal’ would be intolerable to any nation. Only a no-deal Brexit is now possible. Voters have demanded a fair shot at the future. Britain can emerge from its political and economic trap only if, using this moment of ultra-low interest rates, a bold post-Brexit government invests in the country’s future.
Announcing that she would step down as Britain’s prime minister on June 7, Theresa May mournfully said, “I have striven to make the United Kingdom a country that works not just for a privileged few, but for everyone. And to honour the result of the EU referendum.”
May was right on the diagnosis. The Brexit vote called for two apparently distinct tasks: making Britain work for all and exiting from the EU. Each task demanded a decisive break from overpowering narratives that place blinkers on policymakers in Britain—and, indeed, in all western democracies.
But May remained a prisoner of those worn and dysfunctional narratives, and helplessly repeated the same mantras for three years.
Patronizing mantras avoid hard policy choices
On June 30, 2016—a week after the Brexit vote—she crafted signature words to launch her prime ministerial bid. “We need a bold, new, positive vision for the future of our country – a vision of a country that works not for a privileged few but for every one of us.” In October that year, at the Tory Party conference, newly elevated as prime minister, she said in striking cadence, “The Government I lead will be driven not by the interests of a privileged few, but by the interests of ordinary, working-class families. People who have a job, but don’t always have job security. People who own their own home, but worry about paying the mortgage. People who can just about manage, but worry about the cost of living and getting their kids into a good school.”
May instinctively understood the message of anxiety. The referendum was officially on Britain’s relationship with the EU, but UK citizens used the opportunity to plead for a fair shot at the future. More starkly than in any national election, the Brexit referendum revealed a fractured geography of regions. In large parts of the country, struggling parents could not expect a better life for their children; elsewhere, citizens enjoyed great prosperity and the luxury of optimism.
Former prime minister and Labour Party leader Gordon Brown agreed with May’s interpretation of the referendum result. British manufacturing, unable to face Asian competition, had “collapsed,” he said; industrial towns had “hollowed out,” leaving semiskilled workers “on the wrong side of globalisation.”
Making matters worse, May’s predecessor, David Cameron, aided by his chancellor of the exchequer George Osborne, had pursued a mindless austerity, heaping more indignity on the forsaken regions, depriving them of investment and hope.
Thus, for large numbers of British citizens, the EU single market and the failure of successive UK governments to address their economic anxiety created a toxic mix. All economists agree that more trade increases national prosperity. Equally, however, all economists agree that trade creates winners and losers. The policy advice, robotically repeated but never practiced, is straightforward: open borders to trade and protect the vulnerable. The advice to protect has become more urgent ever since low-wage China and Eastern European nations have joined the globalization race.
The Brexit vote is historically important, not because it questioned the principle of economic integration, but because it vividly highlighted the anger of those who have been left behind. The blame for that anger falls primarily not on the EU but on successive UK governments. But far too many European citizens correctly see the EU as the crystallization of an ideology that weakens the protections of the vulnerable by emphasizing fiscal austerity and promoting policies that make the firing of workers easier.
“No more!” was the message of the Brexit vote. Theresa May heard the call for a fairer Britain. But she believed she could get away with more soothing words.
The perception that Europe works against the interests of ordinary people goes back at least a quarter century. In the September 1992 French referendum on the Maastricht Treaty—to determine if France would join the prospective eurozone—nearly half of all French citizens voted to stay out. The “no voters” then faced the same economic and financial struggles as the Brexit voters now. They had low incomes and low educational achievements, they lived mainly outside flourishing metropolitan areas, and they were justifiably pessimistic about their futures.
Then, as now, some leaders did hear the message correctly. French prime minister Pierre Bérégovoy recognized that “the French most exposed to the harshness of existence” had voted against the Maastricht Treaty. The vote had revealed, he said, “a rupture between the people and their representatives.”
But such sensitive voices drowned in the euphoria of the razor-thin victory for the single European currency. No one then seems to have asked if the vote was legitimate. No one made the case for a second referendum, even though there was a strong case that “pro-European” politicians had made wildly deceptive claims about the euro. French citizens were angry, yes, but enough had cast the “right” vote.
Problems at home remained unattended to. The anger simmered. The same economic and geographical divides have marginalized France’s gilets jaunes(yellow vests) protestors. Like Theresa May’s Brexiteers, the gilets jaunes lack job security. They worry about paying their mortgages and sending their kids to good schools. And they feel similarly hemmed in by the EU.
Was it possible for Theresa May to be “the Nixon who went to China?”
Could May have translated her compassionate words into economic policy that overturned Tory orthodoxy and invested in a prosperous Britain that was also fairer? Could she have been a trailblazer, showing other national leaders ways to conquer a generational challenge?
A prosperous and fairer nation required investment in infrastructure and education on a scale so vast that no western leader dares to imagine it. A daunting task, but the only way for May to live up to her promise that she would give a “voice to the voiceless.” She did not even try. Perhaps she was a prisoner of received ways of thinking, and therefore did not believe in her own rhetoric. It was easier for her to place her faith in “you’re-on-your-own” fiscal austerity. From the moment in June 2016 when she announced she was candidate for prime minister, she praised Cameron for reducing the deficit. From his government, she inherited deep austerity in 2016, which she continued with equal force in 2017.
The austerity in 2016 and 2017 wholly explains the slowdown in those two years. May was proud of her fiscal belt tightening. “We have completed the work that David Cameron and George Osborne started,” she said in her resignation speech. “The deficit is almost eliminated.” Almost, but not quite done.
Feebly, she added that her “Modern Industrial Strategy” would eventually create “good jobs in communities across the whole country, not just in London and the South East.”
Sucked into the European quagmire
The French historian Pierre Rosanvallon tells us that around 1983, French president François Mitterrand and his minister of finance Jacques Delors concluded they could not, on their own, solve France’s problems. They turned for help to Europe. This lazy policy approach is widespread among European politicians, who make over-the-top claims about what Europe actually delivers. They love the buzz of summits, and the compromises crafted in precisely chosen words to issue communiqués that everyone can agree on but few believe in. Meanwhile, the pressing problems at home fester.
May was no exception. Unwilling to tackle the main challenge thrown up by the Brexit vote, she turned to the other impossible task: steer Britain’s exit from the European Union. She sought a cordial agreement with the EU, a transitional arrangement, the start of a new relationship with Europe and the world. The nourishing power of compromise guided her, she said in her tearful closing statement.
This was one occasion when a compromise could not be a communiqué. A compromise, some form of “soft Brexit,” is an oxymoron. A soft Brexit—and that includes May’s version of the Withdrawal Agreement—requires operating under EU rules without a say in making those rules. Such a condition would be intolerable to any nation and is understandably so for a country that prides itself on its history of parliamentary democracy. If the recently concluded European parliamentary elections tell us anything, it is that there is no middle ground. The Brexit Party and other “hard” Brexiteers won about 35 percent of the vote; the committed Remainers won about 40 percent of the vote. Those tainted by their effort to reach middle ground—the Tories and Labour—were humiliated.
Thus, from the start, Britain faced a binary choice: Remain or take a “hard exit.” Remaining required a second referendum, which May repeatedly rejected. “Brexit is Brexit,” she said. “There must be no attempts to remain inside the EU, no attempts to rejoin it through the back door, and no second referendum.”
From the illusion of a Brexit compromise to the temptation of a second referendum
In the June 2016 referendum, people did not know what they were voting for; a better-informed second referendum would give a more accurate view of the British public’s preferences. This is a reasonable position, taken by reasonable people (though not in 1992, when the French vote narrowly went the other way).
As May fumbled with illusory compromise solutions in no man’s land, the drumbeat for a second referendum grew louder. Among others, Labour Party’s Gordon Brown, who shared May’s economic and social diagnosis of the Brexit vote, but who believed in the EU’s transactional economic value, threw his weight behind another people’s vote.
A second referendum, however, did not suit Jeremy Corbyn, the Labour Party’s leader, who understood that too many Labour voters living in desolate tracts were Brexiteers. Such Labour supporters were drifting to Nigel Farage’s Brexit Party.
May, seeking valiantly to make progress, relented. Having been rebuffed in three parliamentary votes on her soft-Brexit option, having failed to find an alternative accommodation with the Labour Party, seeing Corbyn ambivalent on the way forward, and seeking to break an irresolvable impasse, May said in a May 21st speech that she would not oppose a parliamentary vote to authorize a second referendum.
That did not go down well. Fierce opposition to another referendum among a sufficiently large group of Tories instantly ended May’s prime ministership. The swift judgement of her own party on the second referendum idea renders the likelihood of another Tory attempt at that option even more remote.
Indeed, even Labour cannot risk calling for another referendum. Some Labour Party Remainers incorrectly infer from the votes cast in the recent European parliamentary election that Remain would prevail over Leave in a second referendum. However, the anger manifest in 2016 referendum remained undimmed in the 2019 European parliamentary election. Alienated residents in the Leave regions either heavily favored the Brexit Party or else they expressed their frustration in silence by staying away from the polls in large numbers. The nonvoters saw little purpose in voting to elect irrelevant European parliamentarians; they would likely vote again in a second referendum to leave the EU. With the odds thus stacked, few politicians will risk another referendum.
The two faces of political alienation in the European parliamentary election:
In Leave districts, voters favored the Brexit Party or they preferred not to vote.
Source: BritainElects, http://britainelects.com/europarl19/.
Seeking easy answers will lead only to more grief
Britain can emerge from its trap only if, using this moment of ultra-low interest rates, the government invests in the country’s future. On Brexit, the genie is out of the bottle and cannot be put back. Britain’s history and politics have made both an acceptable compromise and a second referendum impossible. And, as Sir Arthur Conan Doyle might have put it, once you eliminate the impossible, only a no-deal Brexit lies ahead. History was not kind to Theresa May. At least she will not have to deal with the turbulence still to come.
Author: Ashoka Mody is Charles and Marie Robertson Visiting Professor in International Economic Policy and lecturer in public and administrative affairs in the Woodrow Wilson School of Public and International Affairs at Princeton University. He was previously assistant director of the European department at the International Monetary Fund.
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