This article appears in the Fall 2017 issue of The American Prospect magazine. Subscribe here.
It is not often that a great, historic nation decides the game is over and relegates itself out of the top rank of economic and geopolitical players. But future historians may decide that is exactly what Britain has done in its convulsions over Brexit.
A personal confession. I coined the term Brexit in 2012 when modish headlines were full of Grexit—Greece exiting the euro single currency and possibly even the European Union itself. Today, Greece under its left-populist Syriza government is the EU’s poster boy as the Greeks swallow every dose of bitter medicine the EU and the International Monetary Fund prescribe.
No one talks of Grexit anymore—but Brexit is the biggest thing to hit Europe since the collapse of Soviet communism. In the Queen’s tenth decade, she does not know if her successor will reign over a truly united kingdom, as Scotland, Wales, and Northern Ireland are coldly bitter at the triumph of an English nationalism that won the Brexit vote.
Britain does not do revolutions, or at least not since the 1640s, when a king’s head was chopped off at the end of a civil war that helped create the supremacy of the Westminster Parliament over the state and the nation. Yet it is hard to see Brexit as anything other than a revolutionary moment. It has destroyed one prime minister, and could destroy another. It has transferred power from representative elected institutions to a populist plebiscite. It entails the biggest reduction in geopolitical influence ever seen in Britain. Together with Trump, the Brexit neo-isolationism implies that the long 19th- and 20th-century hegemony of English-speaking power—the United Kingdom and then the United States—could be over.
With Brexit, paradoxically, Britain has had a massive impact on continental European politics—but not the one that the “Leave” voters wanted—as the rest of Europe has recoiled in horror. European leaders are now more united on the need to stay together and not let Britain have a special status in which it has all the economic benefits of EU membership but none of the political burdens, such as the sharing of sovereignty or paying a share of the EU’s running costs.
The 27 EU member states have found new virtues in the much-criticized European Union, and a new unity on Brexit. That’s good for the EU, bad for Britain.
Britain needs the European Union far more than the EU needs Britain. EU growth was stronger in 2016 than American or British growth. Overall, EU unemployment in mid-2017 was 7.7 percent, which includes the 22 percent jobless rate in Greece. Today, unemployment is falling in France, Spain, and Portugal, and the two Iberian peninsular nations are posting growth rates in 2017 of 3 percent or more. The U.K. growth rate was just 0.2 percent in the first quarter of 2017 and estimated at 0.3 percent in the second quarter, which projects to an annualized growth rate of 1 percent. Such growth as there is according to the U.K. Office of National Statistics is due to government spending. Business investment is flat and productivity is falling. Growth would only fall further with Brexit.
In a July 2017 report, IMF economists identified the United Kingdom as having the largest trade deficit of 28 of the world’s biggest economies, running at 4.4 percent of GDP, in contrast to a surplus for Eurozone countries. U.K. government debt is 89 percent of GDP, more than double the level in 2007, the year when Tony Blair left office and the Tories took over. The British middle classes have not had a real wage rise in more than a decade and have only been able to maintain consumption by going massively into debt. The slightest rise in interest rates or the loss of a job will cause real problems.
For the United Kingdom, the economics of Brexit are almost entirely negative. Today, any firm based in Britain—British or foreign, from modern media creative firms to banks, to auto firms like Nissan, Honda, and Toyota, to universities or management consultants—can produce in Britain and sell into every corner of the world’s biggest market, the European Union. Britain runs an enduring trade deficit in goods but a surplus in services—notably the giant network of financial-sector services based in the City of London, the Wall Street of Europe. But EU leaders have made clear that automatic access to selling bonds, or pension, or trading euros is conditional on being in the European Union, or at least agreeing to abide by EU laws and regulations, much as a foreign bank or firm in the United States has to abide by American laws as well as federal and state ordinances. Prime Minister Theresa May insists that on March 29, 2019, Britain will walk out of all these economic arrangements to become what in trade parlance is called a “third” country, like Mexico or South Korea or Nigeria, seeking to export to the 27 nations in the EU. Each product’s access will have to be separately negotiated. Britain will be the loser.
BREXIT HAS ALREADY ALTERED British politics. The ruling Conservative Party suffered a major defeat in the June 2017 election, one that was abruptly and opportunistically called by Theresa May. In the first months of the year, she was credited with a 20-point lead over a Labour Party led by a scion of the 1968 generation of committed leftists—Jeremy Corbyn. But May lost her majority and has had to pay 1 billion pounds to an extreme, homophobic, and sectarian ultra-Protestant party in Northern Ireland to obtain the support of their ten members of parliament. The Democratic Unionist Party (DUP) combining with 316 Conservative MPs put the Tories just barely over the threshold of 325 seats—the number needed for a working majority in the 650-member House of Commons. The DUP are creationists who believe that God created the world 4,004 years before Christ was born. The party is riddled with incestuous financial and sexual histories.
Prime Minister Theresa May gives her keynote speech on the last day of the Conservative Party Conference in Manchester on October 4, 2017. During her speech, the letter "F" would fall from the slogan behind her.
The London political class likes to look down its nose at the erratic and financially dubious political practices elsewhere in Europe. But Britain has been plunged into five major national elections in three years (the 2014 European Parliament elections and the Scottish independence referendum, the 2015 general election, the 2016 EU referendum, and the 2017 general election). It has a ruling party without a majority, a prime minister cordially loathed by her own MPs, and a cabinet openly at war with itself, making the Trump White House look like an oasis of Eisenhower calm by comparison.
The opposition Labour Party has a leader who is a big fan of Fidel Castro and Hugo Chavez, supported Slobodan Milosevic, and is unwilling to purge his party of rank anti-Semites. Ignored or marginalized for most of his time in the Commons since 1983 as a home to endless lost causes, Corbyn, now 68, found that there was finally an audience for his reasoned denunciations of the shameful inequality and cruelty of austerity cuts on public services and indirect tax rises for the poor while the better-off get richer by the second.
Never in British political history has the country seen 12 months—June 2016 to June 2017—as dramatic as this. Prime Minister David Cameron thought he was sailing to an easy win in his referendum on the European Union. On the referendum day itself, his pollsters were telling him it would be a 55–45 win in favor of Europe. By the end of the count, Cameron was finished. If Lord North in British history books is the prime minister who lost America in the 1780s, David Cameron is the prime minister who lost Europe 230 years later.
The Brexit vote divided Britain in a way never seen before. London, Scotland, Northern Ireland, and the young all voted in favor of Europe. But an English nationalist vote outside London, consisting of the white middle and working classes who had been told for years that there were too many immigrants in Britain, carried the day.
It was assumed that one of the Tories who campaigned for Brexit, notably Boris Johnson, would inherit Downing Street. But revolutions devour their children, and the pro-Brexit Tories stabbed each other in the front, back, and all sides and lost the prize. As the sea of blood rose in front of 10 Downing Street, there appeared a small dinghy with a large woman in it floating gently into the cabinet room on the left of the Downing Street ground floor. Theresa May became Britain’s second woman prime minister.
But Margaret Thatcher she isn’t. The only child of a vicar, she has spent every waking minute since graduating in geography from Oxford working her way up the ranks of the Conservative Party. When she went as prime minister to the G20, it was the first time she had set foot in China. She doesn’t do America, unlike many of the Brexit Tories who dream of creating an Anglosphere and bringing back to life their imagined 1980s dream Reagan-Thatcher axis. Her favorite reading is cookery books, and she holidays walking in the Swiss Alps where everyone speaks English.
The Brexit vote was a narrow 52–48. Just 37 percent of the total electorate voted to leave Europe. In previous constitutional referendums, it was necessary to win at least 40 percent of all eligible votes for a decision to stand. The referendum was advisory, not binding, under law. Hundreds of thousands of 18- to 24-year-old voters were not listed to vote as David Cameron changed the electoral registration system to make it harder for younger voters—thought to be anti-Tory—to vote. In addition, large numbers of Brits who live on the continent did not vote because of the complexities in voting registration for British ex-pats.
Nonetheless, May interpreted the referendum vote as a mandate for an extreme Brexit. Since the late 1990s, when the Tories decided the only way they could attack Tony Blair was by branding him as a quasi-traitor ready to dissolve Britain into a European minestrone run by foreigners in Brussels, the Conservative Party has steadily become more Europhobic.
William Hague, the Tory leader after 1997, kept demanding referendums on minor, long-forgotten EU treaties agreed upon in Amsterdam and Nice. The demand for a plebiscite of the anti-European Tories like Hague grew in intensity in the Labour years. This denied the supremacy of representative parliamentary democratic tradition, which had been a bedrock of Tory political philosophy for centuries. Margaret Thatcher called referendums “a device of dictators and demagogues.” But Conservatives found themselves locked out of power for 13 years, 1997 to 2010, the longest period without the spoils of office in peacetime since the 19th century. Even when Labour was defeated in 2010, the Tories could govern only in coalition with Liberal Democrats, a party they despised.
Finally, Cameron won a majority in 2015. His first big decision was to hold the referendum on Europe the following year. His justification was that he needed to lance the anti-European boil that dominated right-wing politics in Britain. He himself however created the monster he now hoped a referendum might slay. He won the Tory leadership in 2005 as the most anti-European candidate. He and his shadow cabinet team never missed a chance to denigrate the European Union. They constantly presented the Labour prime ministers, Tony Blair until 2007 and Gordon Brown until 2010, as puppets of Brussels who were selling out British interests by supporting the enlargement of the EU to accept ex-communist countries and by allowing workers from those countries to come and work in Britain at jobs the sturdy British worker turned his nose up at.
Cameron refused to directly confront U.K. Independence Party’s (UKIP) xenophobia and anti-European hate language. Most mass-circulation papers, notably those owned offshore by men like Rupert Murdoch, who is not even a British citizen, and other anti-European financiers, denounced the European Union and the presence of Europeans in England. The Federation of Poles in Great Britain produced in 2008 a dossier of 50 hate headlines from one paper, the Daily Mail. Cameron even took the Conservative Party out of the Europe-wide federation of center-right parties such as those led by Germany’s Angela Merkel, Poland’s Donald Tusk, or Spain’s Mariano Rajoy. The federation, known as the European People’s Party, allows all the mainstream conservative parties to connect, debate, and network. It does not require allegiance to any line, but Cameron chose to leave it and set up a new political grouping with hardline nationalist parties, like Poland’s Law and Justice party (PiS) and more obscure populist-right parties, some with historic negatives on anti-Semitism.
Over decades, Britain has accepted millions of Irish immigrant workers and Asian immigrants from Pakistan, India, Bangladesh, and East Africa. Moreover, British banks, businesses, and football clubs were stuffed full of European “immigrants.” The father of the 2003–2005 Tory leader, Michael Howard, was a Romanian immigrant, and to his credit, Cameron promoted black and Asian Tory MPs to government positions. But on Europe, the Conservatives whipped up anti-immigrant populism so that when the referendum was called, it was largely a vote on whether or not Brits liked the level of immigrants in their country.
An English Defence League protest in Newcastle in 2010
The anti-Semitic, neo-fascist British National Party (BNP) won two seats in the European Parliament, and UKIP under its populist demagogue anti-immigrant leader, Nigel Farage, was also winning votes. Neither the BNP nor UKIP were ever able to win a seat in the House of Commons. Yet the BBC and the press treated Farage as a major mainstream political figure. In the manner of Senator Joe McCarthy, claiming communists were taking over America in the 1950s, or Donald Trump insisting the United States was swamped by Mexican and Muslim immigrants, Farage won a major profile with his claims that the European Union was taking over Britain and a tsunami of European “immigrants”—Polish, Italian, Spanish—were overwhelming English towns and public services. He claimed it was possible to travel through London without hearing English spoken and said, “This country, in a short space of time, has frankly become unrecognizable.” Trump invited Farage to visit him in Trump Tower soon after winning in November 2016 and tweeted: “Many people would like to see @Nigel_Farage represent Great Britain as their Ambassador to the United States. He would do a great job!” This ultimate fusion of Brexit and Trump has not come to pass, but in their appeal to xenophobic, anti-immigrant, anti-Muslim nationalism, the two men have much in common.
BREXIT HAS BEEN LIKE A political Ebola virus eating into the innards of traditional British politics and making parties lose coherence and shape. In conceding the main UKIP demand for a referendum, Cameron calculated that the pro-EU vote would easily win, UKIP would be finished, and anti-European Tory MPs would be marginalized. Rarely has a British prime minister gotten the internal politics of his own country so wrong.
But then May compounded the error. She treated the 48 percent pro-EU vote with contempt, and at her party conference in October 2016 and in subsequent speeches she spoke of the European Union using language that might have been written by Nigel Farage. She disparaged pro-Europeans in Britain, declaring, “If you believe you are a citizen of the world, you’re a citizen of nowhere,” evidently not knowing it was Socrates who said, “I am not a citizen of Athens or of Greece but a citizen of the world.”
In forming her cabinet, she promoted rabid anti-Europeans, including Boris Johnson into the prestigious post as foreign secretary. Johnson had a long record of falsifying news stories and indeed was fired from his first job at The Times for making up quotes. His reporting in the 1990s for The Daily Telegraph about Brussels was often sheer invention. In the Brexit referendum campaign, Johnson made outlandish claims that if voters backed Brexit there would be an extra 350 million pounds a week to spend on Britain’s National Health Service. Johnson also said Turkey was about to join the European Union so that 75 million Turks could come to live and work in Britain. Again, untrue, but for 25 years Johnson had been making Tory audiences laugh and jeer with his inventions about the EU. In his biography of Winston Churchill, Johnson wrote that a “Nazi European Union” was proposed in 1942 with “a single currency, a central bank, a common agricultural policy and other familiar ideas.” This is the man Theresa May made Her Majesty’s Principal Secretary of State.
Opinion polls have turned steadily against Brexit since the referendum, with most showing a desire to stay in the European Union free-trade single market and customs union. The June 2017 election was a major repudiation of May’s handling of Brexit. But Labour has not known what to do with this victory. Corbyn himself is no enthusiast for the European Union, though never a committed Brexiter.
I have examined all his interventions on Europe in the Commons since 2005, and while he urged the European Commission to take more action in support for his favored causes, he never called for withdrawal. He supports the rights of Europeans to live in the United Kingdom and, like any 1970s internationalist, he believes in open borders. He does like the European Union of free markets, rules-enforced competition, and bans on state subsidies to prop up money-losing industries. At times, he can use UKIP-sounding language about European workers driving down wages.
Labour had a golden opportunity to tear into May and pour salt on the open wounds of senior Tory politicians who disagreed on how to handle Brexit. Instead, Labour turned in on itself. Corbyn fired three shadow ministers who voted to support the United Kingdom staying in the single market, even though leaving the single market was UKIP and hardline-Tory Brexit policy. Labour spokespersons contradicted each other. Finally, late in August, Corbyn decided that being bracketed with May as favoring a hard Brexit was not smart, and Labour softened its position. The Party now argues there should be a long transition period after the United Kingdom formally leaves the European Union in spring 2019, and in that transition Britain would stay in the single market and customs union and accept all EU rules. In effect, Britain would stay an EU member, but with no voice over any EU decisions or policies. Labour is now the party of so-called “soft” Brexit, and there is at least a clear divide between Labour and the hardline anti-Europeans in May’s cabinet and the prime minister herself.
Brexit is just as bad for British capitalism. The City is seeing a slow hemorrhage of financial jobs to Frankfurt, Dublin, Luxembourg, Amsterdam, and even Paris as France’s new President Emmanuel Macron insists he wants to make Paris a European and global finance hub. As a former Rothschild banker, he knows of what he speaks. The City’s rise to preeminence on a par with Wall Street is entirely due to Europe. The Single European Act of 1986 provided that if a firm or bank is licensed to do business in one European country, it could do business in all EU member states. Nearly 350,000 so-called banking and financial-service “EU passports” have been issued to traders, dealers, and salespersons in the City.
The British financial industry employs 7.3 percent of the U.K.’s working population, totaling more than 2.2 million people. U.K. financial services constitute the country’s largest tax-paying sector, contributing 11.5 percent of the total. The industry is also the U.K.’s largest exporter, running a trade surplus of around 72 billion pounds. All of this has come about because Margaret Thatcher forced through a massive European-wide banking and financial-services liberalization revolution in the 1980s. Every bank and finance house in the United States, Japan, Switzerland, China, Russia, all of Asia, Latin America, and Africa came and opened up in London to get automatic, unfettered access to the European single market of 500 million middle-class consumers. The British specialty of trading and clearing euros is a $120 trillion–volume business which will now leave London as EU finance ministers and central bank governors have made clear that legal supervision for trading in the world’s second-biggest currency would have to take place under EU supervision.
British businesses, health-care services, tourism, catering, and many niche skilled jobs depend on European citizens—described routinely by the BBC and politicians using the value-loaded word “immigrants”—including half a million Irish citizens, the second-biggest category of EU workers in Britain after Poles. Immigrants from India, Pakistan, Bangladesh, and Sri Lanka far outnumber all the EU citizens in Britain, but do not face the same xenophobic political and media hate attacks from the right that Europeans encounter. If Britain starts to discriminate against European citizens by imposing immigration controls like travel, work, or residence visas on Europeans, then it will be impossible for Britain to stay in the single market.
An anti-Brexit demonstration in London on September 9, 2017
Leaving the EU customs union would have a dramatic impact in Ireland. The Northern Ireland peace agreement has written into it the obligation to accept common EU rules. Today, an Irish nationalist Catholic can live in Derry or anywhere in the six counties of British Ulster and feel as if they are living in one Ireland. They will have an Irish passport, watch the Irish broadcaster RTE, use euros, work or own property in Ireland, drive across the border as if driving from Virginia to Maryland, and no longer feel, like so many Irish felt living under Protestant Loyalist domination between 1920 and 1990, as if they were still colonized by the English.
All the milk in Bailey’s Irish Cream or in the hard cheddar cheese of British supermarkets comes from Ulster cows, but is shipped across the Northern Irish border to the efficient dairy multinationals in Ireland. In the European Union, there is just one Irish economy. Guinness is brewed in St. James, Dublin, and shipped in tankers to Belfast, then bottled or put in barrels and sent back to Dublin for export to anywhere a pint of the “dark stuff” is popular—without having to bother with customs or border formalities.
Outside the EU customs union, the border between the United Kingdom province in Northern Ireland and the Irish Republic becomes a crossing point between two sets of tariffs and duties, and will require border posts along the 200 or so roads that cross the 300-mile-long frontier. Once again, uniformed officers of the British state will have their buildings supervising what the Irish are up to. Since the 1920s, the favorite targets for any angry Irish nationalist have been border outposts representing the control of the British state in the northeast corner of Ireland.
If the Tories insist on leaving the EU customs union, then trouble in Northern Ireland is guaranteed, without looking at the endless queues of lorries, vans, and cars to be checked as they go from England to French ports and other harbors on the continental mainland.
Brexit also clearly threatens Britain’s standing as a geopolitical player. For centuries, Britain expended blood and treasure to ensure Europe was open for British commerce, that no dominant continental power, ideology, or faith took over, and that liberal, democratic, rule-of-law values dear to Britain spread across the continent.
In recent decades, Britain has had a seat, a vote, and a voice in all the big-ticket decisions on Europe’s direction of travel. British diplomats, other officials, stellar leaders like Margaret Thatcher and Tony Blair magnified their influence by cajoling, persuading, nudging the rest of Europe in a desired direction for Britain. This meant building alliances and accepting some pushbacks, but Britain has had more power and influence in Europe in the last few decades than at any previous time in history.
All this comes to a dead shuddering stop upon Brexit, irrespective of whether it is hard or soft. Under May’s proposal, in the spring of 2019, when the next European Parliament is elected, the next European Commission is chosen, and the new Council of Ministers meets, no Brit will be present. The United Kingdom reverts to bilateral diplomacy. Britain overnight becomes an international policy player that has to cool its heels in the waiting rooms of EU deciders from the Council of Ministers to the European Commission.
But Brexit has caught Britain as a small uncertain, confused animal in the headlight glare of nationalist xenophobic populism. The political class has never been so weak or badly led.
CAN THIS SITUATION REALLY stand? There is a passionate intensity among the ideologues in the Brexit camp who have invested political belief for two decades or more that the European Union was a monster to be slayed and island Britain should stand alone, as in 1940. As Ambrose Evans-Pritchard, the international business editor of the hardline pro-Brexit Daily Telegraph wrote in an exchange with Stephan Richter, the editor of The Globalist, there would be a “civil war” if any effort were made to reverse Brexit.
This is sheer hyperbole. The evidence suggests that there would be just a huge sigh of relief if politicians could rise to the challenge of avoiding a massive crisis over trade, investment, jobs, and the rights of the British to live, retire, or work across the Channel. There will be die-in-the-ditchers on the right, but the BNP has disappeared as a political force and UKIP got just 1.8 percent of the general election vote.
Business is the dog that is not barking on Brexit. Very few business leaders want to go out front and say with style and punch that Brexit is a disaster. They depend on May and her Brexit ministers for contracts or to become Sir or Lord Someone. Most are Tories who do not want to undermine the Conservative government and risk a hard left-wing Corbyn arriving in 10 Downing Street to create Venezuela on the Thames, as his rightist critics put it.
But Labour does not want to be seen as totally repudiating the decision of the people in the referendum. Labour lost many white working-class pro-Brexit votes in the June general election, and needs to get them back to have any hope of winning power.
There are three basic routes out of the Brexit trap. A prime minister would have to muster the courage to call a second referendum. Or the House of Commons could vote to overturn Brexit. Alternatively, Britain could negotiate an arrangement of affiliated status, much like that enjoyed by Norway or Switzerland. The problem is that neither May nor Corbyn is close to calling a second referendum. It’s not at all clear that even in a free vote, a majority of MPs would vote to reverse Brexit. And other EU leaders have no good reason to give Britain a Norway-style deal.
In Denmark in 1993 and Ireland in 2009, a second referendum was held to reverse an initial rejection of two EU treaties that expanded the powers of the European Union. But the Brexit referendum is rather more fundamental in saying no to the very idea of EU membership. The risk is that voters may feel patronized and decide to confirm their initial vote. What is certain is that in most of the recent national polls in Britain, whatever was assumed would happen did not.
Is it possible for Parliament to take charge and modify or reverse the referendum result, as the Swiss parliament did when it sidelined the 2014 referendum against immigration by EU citizens? This requires higher levels of confident political leadership in Britain than so far have been on display by party leaders.
Conservative MPs have a decidedly anti-European rank and file. They also have a prime minister who decided in August 2016 that she could only be secure if she interpreted and defined a vote to leave the European Union as a full amputational rupture.
Yet Brexit—full British exit from the EU—has not happened. The vote to leave has. But Brits are doubting Thomases. They don’t believe anything has happened or will happen until they can touch, feel it.
In principle, it is possible for Britain to stay in the EU customs union or indeed the single market, but outside the European Union. When the European Economic Community was set up in 1957 by France, Germany, Italy, Belgium, the Netherlands, and Luxembourg, Britain formed a rival European Free Trade Association (EFTA) to include Ireland, Switzerland, Norway, Iceland, and other countries. But EFTA members insisted on retaining national sovereign control on trade and people flows and rejected a common arbitration court like the European Court of Justice. When Britain and Ireland joined the European Community in 1973, EFTA withered on the vine. It survives as a small club. Its members, other than Switzerland, signed a treaty with the European Union in 1993 and with all EU member states. The combined EU/EFTA nations formed what is called the European Economic Area (EEA). EEA non-EU members like Norway accept EU laws and directives, accept the principle of the four freedoms of movement of capital, goods, services, and people across borders, pay contributions as if an EU member state, and abide by European Court of Justice rulings.
Boris Johnson during a press conference in London on October 12, 2017
There is an intense legal debate going on about whether the United Kingdom could continue as an EEA member. Government ministers are talking about a transition period as they desperately try to buy time and avoid a major economic and social crisis in March 2019. At that date, trade, flights, and the right to live and retire in Europe suddenly will be impaired, and many foreign firms will feel obliged to relocate out of the U.K. into the bigger EU market.
NOT MANY POLITICIANS KNOW how to admit that a catastrophic mistake has been made. As Friedrich Schiller wrote, “Against stupidity even the Gods contend in vain.”
There is also cold fury in Europe that Britain allowed the hate politics of xenophobic anti-Europeanism to become official policy of David Cameron and his predecessors, with Theresa May as Britain’s Bourbon prime minister who has learned nothing and forgotten nothing about Brexit. So even if the British wake up to their mistake and seek to stay partly in the European Union, there may be no appetite in the EU to allow this to happen on terms the British would want or could accept.
Today I am not sure if Britain can rise to the challenge of avoiding Brexit or at least mitigating its worst impact. Brexit is lose-lose for both Britain and Europe. If it is consummated, the long era of Euro-Atlantic economic integration, promotion of liberal values, and social development between 1945 and Donald Trump’s election will be over. Putin and Trump celebrated Brexit, as did Viktor Orban in Hungary and Jaroslaw Kaczynski in Poland. The aftershock of Brexit has already humiliated Prime Minister Theresa May.
The chief Brexit minister, David Davis, when attacking the Labour government in opposition, declared, “If a democracy cannot change its mind, it ceases to be a democracy.” Can British democracy change its mind? Or, like Venice, the Habsburg Empire, and other once-mighty commercial and political powers in Europe, is Brexit the moment when Britain begins to exit world history?
Britain’s Brexit drama intensified during the annual fall party political conferences. Theresa May was unable to stamp any authority on her party, as the Conservative conference became a show ground for the ambitions of Foreign Secretary Boris Johnson, who has been aching to be Tory Party leader and prime minister ever since he was at Eton with former Prime Minister David Cameron.
In a 4,000-word article for the pro-Brexit Daily Telegraph, Johnson reaffirmed his faith in a total Brexit. While paying nominal allegiance to the current prime minister, he made clear he was willing and waiting to take over.
May’s keynote speech to her Conservative Party faithful turned into a personal disaster. She kept coughing, and had to break off her speech for a glass of water and a throat lozenge. A prankster was able to get right up to the rostrum where she was speaking and handed her what’s called a P45—the legal notice given at work to those being fired.
Finally, a letter in the slogan on the backdrop began to slide down behind May. Her MPs, activists, and TV viewers at home watched in fascinated horror as she faithfully kept to her autocue text, oblivious to the symbolic disaster behind her back.
There were open challenges to May from former Tory ministers saying she should resign, and the general consensus was that never before in living memory had the party and the nation had such a weak prime minister.
Papers like The Times and Observer openly described Johnson as a “liar,” once an accusation that would have produced writs for defamation to shut up the papers. But May’s foreign secretary cannot go into court and hope to claim that he tells the truth.
But if not Johnson, who? The Conservatives keep looking over their shoulder in fear at Labour’s Jeremy Corbyn, who has made a connection in terms of authenticity and left-wing conviction that had been utterly forgotten in the years of New Labour Third Way hegemony under Tony Blair and kindred acolytes.
As with Bernie Sanders or other left parties and personalities in Europe, it remains to be seen whether the personality cult of Corbyn—with delegates at Labour’s annual congress wearing T-shirts with his photo, chanting “Oh, Jeremy Corbyn” like a chorus from Aida—will translate into an election victory.
The rest of Europe—both the 27 EU member states and the leadership teams in the European Commission and European Parliament in Brussels—looked on in bewilderment as London kept temporizing on proposing any real solution to key issues, like the United Kingdom’s financial obligations in the EU-U.K. divorce settlement. Yet May kept insisting that Britain would leave the single market and the customs union.
Brexit evangelists declared that the rest of the world was aching to sign free-trade deals with the United Kingdom, especially with Trump’s America. They seemed to think that NAFTA could be re-opened to incorporate an anti-EU Britain as NAFTA’s fourth member state after the United States, Mexico, and Canada. No one seemed to have the faintest knowledge of the divisions and demonstrations over NAFTA, or how—compared with the EU’s single market, with its extensive social protections, environmental rules, enforceable court rulings on global corporations not paying tax or creating monopolies—NAFTA is an extremely limited trade deal.
Meanwhile, Britain reeled as the Trump administration imposed $220 million worth of protectionist tariffs on a mid-sized plane, the Bombardier, which is made in Canada with wings made by 5,000 skilled British workers near Belfast. Neither Boeing nor any other U.S. firm had an equivalent product, and in Ireland there was fury that the United States could threaten such damage to the fragile Northern Irish labor market.
This added to the general woe as the U.K. economy slowed down, with every day bringing reports of banking and other financial-sector firms relocating part of their business to continental capitals. Farming incomes were reported to face cuts of 50 percent once the United Kingdom loses automatic access for its agricultural products to the giant EU market.
Howard Davies, the chair of one of the United Kingdom’s biggest banks, the Royal Bank of Scotland, said that there were only a few months left before the City of London would face an “exodus” of jobs as a result of Brexit. There is massive dissonance gap between what CEOs say in private seminars and in reports produced by consultancies and lawyers, and what they are prepared to say on the record.
The International Monetary Fund reported in October that Britain will trail behind Greece in terms of growth, and nearly all economic forecasts portray the U.K. becoming the weakest of the major EU and G7 economies.
New car sales dropped by 9.3 percent in September. In the five years before Brexit, household spending growth averaged 0.6 percent a quarter. In the four quarters since Brexit, household spending has risen by just 0.2 percent. Inflation at 2.9 percent outstrips pay increases of 2.1 percent. Most economic commentators expect an interest rate rise, especially if the Fed moves rates upward. All this bad economic news led Moody’s to downgrade Britain’s rating.
If any of this negative economic news had happened under a Labour government, the press and Tory MPs would be making this British economic decline a constant headline narrative. And all this has happened well before Brexit bites, as trade access and inward investment declines thanks to the sheer uncertainty of what the economic future of Britain will be if fully amputated from Europe.
But Brexit is a Tory problem, and so the silence of anti-Brexit Conservative MPs is deafening. There are 316 Tory MPs. In the cabinet, eight are as identified anti-European ideologues—like Johnson, Environment Secretary Michael Gove, or Transport Secretary Chris Grayling, who in previous positions had ordered a ban on books being sent to prisoners in prison and was ready to support small hotel and Airbnb owners who refused to let rooms to gay couples.
There are an estimated 40 to 60 Tory MPs who form a clear pro-Brexit pressure group. But even if one adds together all the identified pro-Brexit MPs, that still leaves well over 200 Tory MPs who have not declared their hand. Most Tory MPs voted against Brexit in the June 2016 plebiscite.
At what stage do they emerge and begin to discuss publicly the risks of the amputational Brexit urged upon May by hardline anti-Europeans in her party?
The reduced vote for Angela Merkel and the insistence by populist Catalan Nationalist secessionists on breaking up Spain are now major headaches for Europe. The European Union has no choice but to insist on the unity of its member states and not endorse or encourage secession and separatism. The clumsy handling of the Catalan question by Madrid has played into the hands of those who like to portray the EU as crushing national identity—in this case, Catalan separatism.
But as with the problem of Polish and Hungarian nationalist illiberalism, the European Union can ride the Catalan question for the time being, as both Castilians and Catalans on the Iberian Peninsula work out their differences.
Brexit is of a different order. There are calls for a second referendum or even a simple withdrawal of the United Kingdom’s policy of leaving Europe. But public opinion is not there yet, and Tory MPs are not ready to rise to the challenge of speaking for the 63 percent of British voters who either rejected Brexit or stayed at home and did not vote. Will this continue, or will British capitalism and its agents in the Conservative Party in Parliament find a way to avoid latter-day economic and geopolitical isolationism? Many hoped that after the September-October party conference season, there would be some clarity. This hasn’t happened. Britain is drifting rudderless toward a major recasting of its place in world affairs. —October 13, 2017