Why the UK cannot see that Brexit is utterly, utterly stupid

If you talk to almost anyone overseas, except those at the right wing extreme (like Trump) or part of a tiny minority of the left, their reaction to Brexit is similar to the former Prime Minister of Finland. What the UK is doing is utterly, utterly stupid. An act of self harm with no point, no upside. Now sometimes outside opinion is based on incomplete or biased information and should be discounted, but on Brexit it is spot on. So why are so many people in the UK unable to see what outsiders can see quite clearly.

The days when Leavers were talking about the sunlit uplands are over. Liam Fox has not even managed to replicate the scores of trade deals the UK will lose when we leave the EU. As to independence, Leavers just cannot name any laws that the EU imposed on the UK they do not like. Since the referendum even public attitudes to immigration have become much more favourable.

Instead there has emerged one justification for reducing real wages, for allowing our economy to lose over 2% of its GDP, to allow firms to make plans and enact plans to leave the UK: the 2016 referendum. People voted for it so it has to be done. It is described as the will of the people. Yet few bother to note that almost half the people voted the other way, with those that would be most affected not even having a vote, and that this victory was won by illegal means. All that is brushed aside.

But what is really remarkable is the way what this vote was for has gradually mutated over time. Just before the vote, the Leave campaign talked of many ways of leaving, with Norway (which is in the EEA) as one option. They did this for a simple reason: every time Leavers came up with a feasible way of leaving other Leavers did not like it. Yet within little more than a year Leavers were declaring that the vote was obviously to leave both the Customs Union and Single Market. During the referendum campaign the Leave side talked about the great deal they would get from the EU, but within two years many of the same people were seriously pretending that voters really wanted No Deal. A vote for the ‘easiest’ deal in history has become a vote for no deal at all, apparently.

In much the same way, as Alex Andreou notes, what was once described as Project Fear transforms in time into ‘the people knew they were voting for that’. Claims there will be no short term hit to living standards made before the referendum has now become people knew there would be a short term cost. (Remember Rees-Mogg told us that short term means 50 years.)

Meanwhile warnings from important UK businesses become an excuse to talk about WWII, yet again. What people from outside the UK can see that too many inside cannot is how the case for Leaving has become little more than xenophobia and nationalism. What people overseas can also see but we seem unable to is that there is a world of difference between a vote to Leave the EU in an unspecified way and a real, practical plan. Which means that the first referendum, particularly as it was narrowly won, needs to be followed by a second referendum over an actual, realistic way of leaving. In other words a People’s Vote. When Jonathan Freedland says “the notion that a 52% vote for a hypothetical, pain-free Brexit translates into an unbreakable mandate for an actually existing Brexit is shaky at best” he is wrong: the notion is simply wrong.

Some of the arguments against this are so dumb, yet are allowed to pass as serious. ‘Why not the best of three’: there is no reason for a third referendum. ‘The first referendum was an unconditional vote to leave’: of course it could never be. [1] Suppose we found out that everyone would lose half their income under any specific way of leaving - would you still argue that in 2016 voters voted for that? Or that a second referendum means that ‘politicians have failed the people’. Most politicians voted to Remain because they knew that any realistic way of leaving would be bad for people. They have been proved right and a majority of the electorate might well agree.

But by far the worst excuse not to hold a People’s Vote is that a second referendum would be undemocratic. Orwell must be turning in his grave when he hears politicians say in all seriousness that a second referendum would undermine faith in democracy. This is the language of dictators and fascists, but few seem to mind. Given the difference between the final deal and the promises of the Leave campaign the case for a second referendum is overwhelming, but you would not know that from the UK public debate. There is only one way to make sense of the ‘People’s Vote = undemocratic’ equation, or the ‘will of the people’, and that is that the first referendum effectively disenfranchised Remain voters. [2]

That is exactly what happened after the 2016 vote. Those wanting to Remain to all intents and purposes ceased to exist. If we are just talking about Leave voters, then of course most will be disappointed by a second vote. Is this why Labour MPs just worry about Leave voters in their constituencies, because Remain voters no longer matter? It is why we get endless Vox pops from Leave constituencies, and no mention from EU citizens who have lived here for years who are worried sick because the computer might say you have to leave.

How did Remain voters get effectively disenfranchised? Why is the lunacy of what this country is doing only apparent to foreigners? Answering this question is not hard for anyone who has read my book ‘The Lies We Were Told’. What we have that foreigners do not is a public discourse shaped by a handful of newspaper proprietors who just happen [3] to be intensely hostile to the EU. Partly through intimidation by that same press and their political allies, the BBC follows this discourse. This is where the ‘will of the people’ came from. It was this press that puts rebel Conservative MPs on their front pages, and that uses language like saboteurs and traitors. It is intimidating MPs in order to influence the democratic process, but of course few in the media call it that. 

As I discuss in my book, I have seen this before in a milder form at least twice in recent times. In the first the UK convinced itself that austerity was the only way forward, despite most academic economists saying otherwise. It was the media that promoted claims that governments were just like households, even though first years economics students are taught why this is not true. And then it was the media that pushed (or left unchallenged) the idea that austerity was the result of Labour profligacy: it was a straight lie but it played a critical part in the 2015 election.

If people have doubts about my argument that the media played a central role is misdirecting the public then (and many do), well Brexit should be a test case. And so far Brexit has gone exactly as these newspaper proprietors would have wished. Three coincidences is a row? The reason why those overseas can see that Brexit is utterly, utterly stupid while the UK stockpiles food and medicine, and the Prime Minister tries to blackmail MPs into supporting her deal, is because those overseas are not influenced by the UK media.

[1] As this one seems very popular, it is worth spelling out why it is rubbish. The 2016 referendum was not some kind of contract, where all those voting to leave committed to support any vote to leave for all time. It is highly likely that some people voted for a particular kind of Brexit and would prefer Remain to other types of Brexit, which is crucial given the narrow victory. (Which is also why claims that Remain cannot be on any second referendum ballot are also nonsense.) Some may have voted Leave to give more money to the NHS and to stop Turkish immigrants, in which case they may have changed their minds. It does not say "we should leave whatever the form of leave at whatever cost" on the ballot or the small print, because there is no small print.  

[2] There is a serious and quite compelling argument that referendums in a representative democracy are a bad idea, but this equation is about a referendum that has been necessitated by an ambiguous first referendum.

[3] Well maybe not ‘just happen’: see here

Can we trust Jeremy Corbyn over Europe?

I originally wrote this as a companion piece to a post on how Smith could win, but put it to one side as I thought I was writing too much on Labour’s election. However as similar points are now emerging elsewhere, perhaps publishing this will help convince some that this is not just another MSM smear.

When the vote of no confidence happened immediately after Brexit, I suspect the thoughts of most Labour Party members were similar to those of MP Liz McInnes: what a stupid and inappropriate time to have another election (as indeed it was). It seemed to fit into the narrative about a PLP obsessed with removing the membership’s democratic choice of leader. Surely we should give ‘the project’ some more time, and allow Jeremy Corbyn more time to see if he could grow into his role. And who was Owen Smith anyway? Journalists saw the support Corbyn has, and started assuming this was no contest.

On the face of it Owen Smith appears on many issues to be quite close to Jeremy Corbyn. A big difference is Trident, which many Labour party members think is a waste of money (and I agree). In addition there is the issue of trust. Owen Smith talks the talk now, but can members trust him not to backslide as Blairite MPs and a hostile media tell him he has to modify his radical programme? Jeremy Corbyn, on the other hand, seems to be integrity through and through.

But there is another key difference between Smith and Corbyn beside Trident, and that is over Europe. On the face of it the difference is about something that may never be allowed to happen anyway: a second referendum. Smith wants one, Corbyn does not. But for those party members who feel strongly about retaining as strong a link with Europe as we can, not just because of the economics but because Europe represents opportunity and is part of their identity, this difference may be the way they begin to unpick the issue of trust.

The vote of no confidence was the result of Brexit. You can tell yourself that was because the ‘plotters’ thought it would be to their advantage, but why would that be? Forget issues about effort and holidays. The crucial question is whether Corbyn’s heart was ever in the Remain campaign, and whether (perhaps as a result) his campaign was flawed, or perhaps even counterproductive. I do not know the answer to the heart question, except to say that a lot of the points Corbyn supporters make about Smith’s past could be used to suggest Corbyn was in truth more ambivalent than he says he was.

Of course if you are a true Corbyn believer you have to take him at his word. But the flawed campaign I have said something concrete about (quoting from here):

I have written right from the early stages of the Brexit campaign that I saw this as about the benefits that many people saw in being able to control EU migration, and weighing this against the economic cost in doing so by losing access to the single market. It was vital therefore to take seriously the warnings of economists that these costs could well be large. Jeremy Corbyn however seemed to suggest that when these warnings were repeated by the Chancellor they should not be believed because he could not be trusted. I doubt that was critical to the result, but it was nevertheless a serious economic, tactical and political error.

To put it bluntly: Corbyn appeared to be undermining the central part of the Remain campaign.

The context in which this was written is also important. I have recently said that I think John McDonnell’s Economic Advisory Council was an important innovation that he should be congratulated for both introducing and utilising it in formulating policy. Just because I think Owen Smith should win does not mean I do not give credit where it is due. But in our last meeting Brexit was discussed, and I think it was fairly clear what the general feeling was, reflecting the overall consensus among economists. I was not alone in being unhappy that this advice appeared to have been ignored, as the carefully worded statement from all five of us makes clear.

Of course this mistake could conceivably just reflect a speechwriter getting carried away at wanting to have a go at Cameron or Osborne. Speeches on economics should normally be checked by someone from the shadow Chancellor’s team, but then we know about the competence thing. But perhaps we should take Corbyn at his word, and that he did not agree with the almost unanimous view of economists. And then there was this unfortunate howler about triggering Article 50 straight away - again an obvious mistake quickly retracted.

But I know if roles were reversed, and Owen Smith had done these things, Corbyn supporters would be declaring that they just KNEW that Corbyn really wanted us to Leave. Which suggests to me that if we are skeptical about Smith’s radicalism, we should also be at least as skeptical about Corbyn’s attitude to the future Brexit negotiations.

In fact it goes further than this. The 48% of people who voted to Remain, plus any more who voted Leave but are now beginning to wonder that maybe all those economists were not exaggerating about its impact, plus the majority of companies that want to Remain, plus all the overseas governments that want the UK to remain, will be looking to someone or some party to be their political representative over the next few years. Labour under Owen Smith could play that role for sure, but Labour under Jeremy Corbyn? A leader whose heart may not be in it and who has said the costs of Brexit are exaggerated and who only has 20% of MPs who have confidence in him and who isn’t very good at doing the parliamentary thing or the details about Brexit policy thing is hardly a good choice to champion this cause. And if Labour members feel that way, voters will feel the same, and can UK politics persist with the two major parties accepting Brexit and leaving the 48%+ unrepresented?

Just as the coup itself followed Brexit, it may be that members (like Alex Andreou) begin to realise that this event has changed the political landscape in a crucial way. 2016 is not like 2015. Yes there are plotters, but there are also MPs desperate for Labour to become an effective opposition again for whom Brexit was the last straw. For some members the project is everything, even if the project does not include Europe or winning elections anytime soon. I have debated with plenty of party members like that. But if there are others who do care about both winning elections and minimising the harm done by Brexit, we may see support for Smith growing. He will get his own momentum.

Brexit and the Left

There seem to be two strands of opinion which encourages people on the left to vote Leave. The first is an intense dislike of what has happened in the the Eurozone: see Larry Elliott for example. The second is a wish to take seriously working class concerns over immigration.

I share the intense dislike over what has happened in the Eurozone (EZ). You only need to read, for example, what I have written about Greece to see that. Yet I cannot see how UK exit from the EU will change for the good how the EZ works. Crucially why should it change the current politics of Germany that has been so important in many of the bad decisions the EZ has made. As we are not part of the EZ, it is difficult to see how UK exit will help its demise, if that is what you want.

As we will be leaving the EU and not the EZ, the message Brexit sends to Europe is not that the EZ is fundamentally flawed but rather that the UK is incapable of being part of any cooperative agreement among European countries. I am internationalist by nature so I do not want that. The idea that Brexit will shock the EZ into mending its ways, then thank us for showing them the light and invite us to rejoin whatever is left is pure fantasy.

There is one way the EZ crisis has impacted on the UK, and that is migration. It seems reasonable to assume that one reason immigration into the UK from the EU is currently high is because of considerable youth unemployment in many EZ countries. Which brings us to immigration concerns.

Take this from Kate Hoey for example. She seems to be arguing that free movement in the EU is a means of keeping down the wages of the low paid. The first point to make is if labour mobility keeps wages down in the destination country, it should increase wages and/or reduce unemployment in the country the migrant came from. As migrants move from lower to higher wage countries, then migration tends to equalise incomes. This should normally count as a plus from a left wing perspective.

But does migration have this effect on the receiving country? There are many reasons why it might not, and the evidence does not point to strong negative effects on wages. But I think the case for migration is stronger than that. A pretty robust finding is that migration at the kind of levels we are now seeing does not do any harm to GDP per head, and could improve it. Another robust finding is that current migration benefits the public finances. This is both important and pretty obvious..

Migrants tend to be young, healthy and working. They provide more in terms of resources than they take out by using public services. I remember having a conversation about this with someone who lived in Spain. He said if anyone should be angry about free movement it is Spain, in having to take lots non-productive British pensioners who will be a burden on Spain’s health service. This was also one reason why Merkel could be so open to refugees: Germany is really worried about the implications of their aging population. [1]

If migration falls following Brexit (a big if), and if we add in the other negative effects of Brexit, we will have a large increase in the government’s budget deficit even at full employment. Given government policy on how holes in the deficit are to be filled, this NIESR analysis suggests you are talking about large hits to the lower paid.

None of this is to deny real grievances about reduced public services and lower pay. Once again I do not think I and many others could be accused of keeping quiet about the stupidity of current austerity. But just as the grievances are real, it is also important to understand the real causes.

A consistent result in polls is that migration is a concern mainly in areas where there is little of it. In this poll only 19% of people say they believe immigration has had a negative effect on them personally. (More believe they have experienced positive effects.) Yet over 50% say it has had a negative impact on the NHS. In reality the NHS is in crisis because of government policy, not because of immigration. But to know that you need to talk to the experts and look at the figures. Instead most people will just have read the newspapers, many of which have taken every opportunity to play up the ‘threat’ of migration. As Paul Mason nicely puts it, you can tell this is a fake working class revolt from looking at those leading it.

This is part of a more general point on migration. Migration appears to be at worst neutral and probably beneficial for medium term UK prosperity, so if there are problems for some groups that can be fixed. At which point those on the left say that is naive because it will not happen. That is a reasonable point, but the same point applies in spades to the immediate aftermath of Brexit, which will amount to yet another shift to the right. The regulations that those running the Leave campaign want to ‘free’ us from are those protecting workers and the environment.

To make this clear, think of two realities (economists would call them states of the world). One (the status quo) involves those currently in charge remaining in charge. The second (left renaissance) involves left wing governments coming to power in the UK and elsewhere. It seems to me that if you stay in either one of these two realities, Brexit is clearly bad. (For a similar argument, see this by Alex Andreou.)

Under the status quo, the EU is currently a moderating influence on this right wing UK government. A post-Brexit Boris Johnson government would take away worker rights that the EU currently ensures and, as the deficit deteriorates, cut welfare benefits including tax credits. This alone will dwarf any benefit working people might get from less immigration. Under a left renaissance migration benefits the economy as a whole as well as those who migrate, and these gains could be fairly distributed. My feeling is that some Brexit supporters on the left move freely between these two realities in order to justify a vote for Brexit.

[1] One fair point made in comments on earlier posts is that migrants need to be housed, so resources are used to provide additional housing. (More generally new labour needs new capital of various kinds.) But housing also represents why migration can be beneficial to everyone. We need to build more houses anyway, but according to the industry we have an acute shortage of skilled construction workers. Of course this is an indictment of UK training programmes, but that cannot be turned around quickly. For those with construction skills, it is surely better to be building houses where they are really needed than being unemployed in places they are not.