NIRAJ SRIVASTAVA | 8 JULY, 2016
Brexit: Why And What Next?
The June 23 referendum on “Brexit” was a defining event in British and European history precipitating, as it did, Britain’s deepest political crisis since the second World War. Its outcome has been variously interpreted as anti-establishment, anti-globalization, anti-capitalism, anti-immigration, anti-austerity, anti-Eurocrat and anti-market. It is perhaps all of these and more.
It would be erroneous to view the victory for the “Leave” camp as merely a “revolt by the working class,” as some people are tempted to do. True, a higher percentage of the working class voted for Leave—64% or 7 million—than the middle and upper classes. But the turnout of the latter was much higher than the former—90% versus 52%—resulting in around 10 million (46%) middle and upper-class votes for Leave. Therefore, Brexit was supported by the whole spectrum of the British people, from the Left to the Far Right, including affluent Conservatives. The “Leavers” won by a margin of about 4%, or 1.3 million votes.
There were many issues involved in the referendum—economy, sovereignty, immigration, the welfare state, etc.—but, in retrospect, it is clear that it was immigration which turned out to be the most crucial of them all. In particular, immigration into Britain from other EU countries, which is around 300,000 per year, and which Britain can do nothing to stop or control, seems to have triggered the greatest concern amongst the voters. To that were added concerns about immigration of refugees from the Middle East and Turkey, if that country becomes a member of the EU.
The EU is a customs union founded in 1993 that permits the free movement of capital, goods, services, and people amongst its members. It has a market of around 508 million people. It benefited greatly from globalisation, at least till 2008, when it was hit hard by the global financial crisis caused by Wall Street operators. Since then several EU members, including Britain, have faced serious economic problems, including a recession, job losses, and falling incomes. These problems have caused social tensions and xenophobia in the form of growing resentment against immigrants, who were seen as taking away jobs from the natives, and imposing demands on public goods and services provided by the state.
During the last thirty years, there has been a gradual but steady erosion of the “welfare state” in Britain. It was begun by Mrs Thatcher when she became Prime Minister in 1979. Public goods and services earlier provided by the state at subsidised prices, such as railways, electricity, water, health, education, phone, and housing, were progressively privatised, making them much more expensive, thereby putting them beyond the reach of the working class. The welfare state was replaced by the “market state,” in which the market determined the price of public goods and services. The working class could not afford them in times of economic distress.
Moreover, the gains of globalisation were not distributed equitably. The wealthy benefited much more than the poor, significantly exacerbating inequality in the society. This, too, caused resentment amongst the low-income groups, which also bore the brunt of the austerity measures implemented the Cameron government since 2010. These groups saw themselves as globalisation’s losers.
The process of dismantling the welfare state begun by Mrs Thatcher was continued by Tony Blair in the form of “public-private partnerships” for another ten years. After Blair, whatever was left was almost wiped out by the austerity-oriented policies of David Cameron. Real wages fell, job security eroded, and the social safety net frayed even more. The anger caused amongst the working class by these developments was directed against the immigrants instead of Thatcherism and the market-state, which were the real culprits. The working class and the financially disadvantaged felt that they had been left behind by the economic transformation of Britain that globalisation had produced. No wonder support for Brexit was strongest amongst them. The UKIP led by Nigel Farage capitalised on this sentiment.
On the other hand, some members of the upper class saw the steady influx of east Europeans into Britain as a threat to the “English way of life”. They included people like Nigel Lawson, William Hague, Gordon Brown, Ed Miliband, David Owen, and Boris Johnson. Some of them demanded “British jobs for British workers” and “Take back Control,” the slogan that won the Brexit vote. They argued that it was for Britain to decide who could come to work and live in the country, not the Eurocrats in Brussels. They made it clear that they did not want to become a part of the “United States of Europe,” in which Britain would lose its distinctive identity. They argued that Britain’s withdrawal from the EU was necessary to control the number of European immigrants entering the country. Taking a swipe at Brussels, Boris Johnson declared that the EU was “becoming more centralising, interfering, and anti-democratic”. Nigel Lawson said that there was a “democratic deficit” in the EU, which was “addicted to more and more regulation”.
Interestingly, even some serving members of Cameron’s cabinet, such as Defence Secretary Penny Mordaunt and Justice Secretary Michael Gove, also spoke in favour of Brexit. Mordaunt said that thousands of criminals could come to the UK when Turkey, Serbia, Albania, Montenegro, and Macedonia join the EU. She said it was “very likely” that Turkey will join the EU within the next eight years. She suggested that the only way to prevent millions of Middle Eastern migrants from entering Britain was to leave the EU. Gove said that staying in the EU will overwhelm public services because of migrants from Turkey. Not surprisingly, these statements caused alarm and gained support for Brexit.
UKIP leader Nigel Farage also raised the spectre of refugees from the Middle East flooding Britain and said the country was reaching a “breaking point.” He claimed that the post-war social fabric of the country was being destroyed due to immigration from EU countries. The UK was being “overwhelmed” by East European migrants. Britain needed to “take control of its borders”. Again, this argument resonated with both the Left and the Right. Farage succeeded in fusing the EU with immigration.
The Brexit campaign was also helped by the large number of Syrian refugees landing in Greece and Italy from Turkey and Libya. More than a million people sought refuge in Europe in 2015 alone, and hundreds of thousand more entered the continent in 2016. Some Brexit supporters used images of these refugees to whip-up support for their agenda. It worked.
In the end, it was opposition to immigration into Britain that led to Brexit. The immigrants became the target of the angst, alienation, and resentment felt by large sections of the British people. The real reasons behind their feelings were perhaps different—the decline of the welfare state, economic hardship, job losses, austerity, etc., as explained above. But these feelings found expression in anti-immigrant votes. The dominant sentiment in the referendum was that withdrawal from the EU was necessary to reduce the number of European immigrants entering Britain. These immigrants were taking away British jobs, eroding the “ English way of life,” and putting an unbearable strain on the country’s health, educational, housing, and other infrastructure.
What next? The people who rule Britain are in a state of shock. Almost everyone, starting with David Cameron, seems to be taking the easy way out by resigning. Discussions are being held behind closed doors about what to do next. There is an air of uncertainty which is not conducive to economic activity, or to anything else, for that matter. It is not clear when Britain will invoke Article 50 of the Lisbon Treaty, which will begin the process of its separation from the EU. In fact, it is not clear if it will invoke Article 50 at all. Many hope that Britain will find a way to stay on in the EU.
The geopolitical implications of Brexit, if it happens, could be extensive and profound. Scotland and Northern Ireland could go their own ways. Anti-EU sentiment is running high in Greece, Italy, Netherlands, France, and Spain. The contagion of separatism could spread further, unravelling the entire EU project. The long-festering problems of the Eurozone could exacerbate the difficulties the EU is facing, and vice-versa.
If Britain leaves the EU, there will be negative consequences for NATO and the US. Britain has often played the role of a US Trojan Horse in Europe and NATO. No wonder Obama advised the British people to stay on in the EU. The US and many British politicians will try hard to prevent a British exit from the EU. The question is, will they succeed?
That remains to be seen. The rest of the world can do little more than wait and watch. For how long? Nobody knows.