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Brexit Part II

Brexit Part II

So… last time I set the stage. Let’s get to what happened.

Why the vote?

All my adult life, “Europe” has been an open sore in British politics. Since the 1980s, all main parties have been officially committed to staying in the European Union. But a significant minority of Brits are what you might describe as “Eurosceptics”, and wanted a minimalist Europe. Free trade within Europe, sure. Include some pan-European regulation if you must, to avoid countries shutting out competition by tailoring local rules. Free movement of EU nationals across EU member states seemed fair. But ever closer political union? Not interested.

Frankly, that’s where I placed myself, along with millions of others. Hardly extreme views – only the hard cases were actively lobbying to leave. Also, you’d find people with these views in all the main political parties.

But it caused more trauma in the currently-ruling Conservative party. Arguments over Europe between the Eurosceptic Margaret Thatcher and her senior ministers played a big role in her downfall. And her successor, John Major, was often frustrated by the “bastards” (his word, caught unscripted) who abused his thin parliamentary majority to vent their anti-Europe views and stage protest votes. The closest North American equivalent is probably the “Tea Party” movement within the US Republican Party.

Of course, you don’t hold referenda every day – even on fairly big-ticket questions. So why did David Cameron promise (in the 2015 election campaign) to hold a referendum on EU membership, if re-elected?

Well, you’d have to ask him. But there are a few theories: As a young advisor, he’d worked in John Major’s treasury – and he didn’t want that sort of feuding to happen on his watch. Plus, in recent years, the UK Independence Party – explicitly anti-EU – had emerged. Not likely to ever form a government, but threatening to drain votes from the Conservatives and threaten their chances in an election.

So, promising a referendum seemed a plausible strategy. Give the people their say, and that puts an end to the argument. No need to vote for the UKIPpers. Plus, at the time, all respectable polls gave the “Leavers” no chance of winning. So not much risk involved, apparently.

Bit of a misjudgment, then.

Clearly. How did the then-PM make such a huge miscalculation?

Again, there’s been a lot of ink spilt on this. Don’t forget how close it was – only 52/48. It could easily have gone the other way. That might be why several million Britons seemed to have a bad case of buyer’s remorse the day after the vote.

A lot of things combined to work in the “Brexiteers” favour. It’s worth noting that all the mass-media papers were shouting “Leave”, and that the normally pro-European Labour Party was (still is) going through an internal civil war, and was notably absent from the debate. And the ongoing dramas over the Euro, Greece’s economy and millions of refugees from Syria don’t make Europe look very attractive, particularly when the UK’s economy is on an uptick.

Plus, the national debate – frankly – sucked. To quote my grandmother again: “Don’t confuse me with facts”. It got very nasty, and was almost entirely dominated by half-truths, distortions and irrelevancies. Both sides were guilty, but the Brexiteers more so.

Arguments for staying?

Seemed a no-brainer to me. Just look at a map of the world. Where does Britain sit?

Of course there’s more to it than that. Personally I’ve always been fairly international (hey, I’m a New Canadian) and I didn’t see anything wrong with being able to work, travel, do business or trade anywhere across the continent.

Plus, I’d rather be an influential voice at one of the world’s bigger tables, rather than a lone voice crying out in the wilderness. Yes, you have to pool your sovereignty and accept things won’t always go the way you want, so you make compromises. It’s called “acting like a grown-up”.

And…. I couldn’t see any way in which leaving would help Britain’s economy. Not quite the same, but it would be like Canadians voting to leave NAFTA. You would lose your guaranteed access to your biggest markets. Sure, if you left, you may be able to negotiate something. Hopefully. But it’s not the same as being at the table when decisions are made. And businesses want to be based in a country that’s going to be in this trading block. Montreal’s financial centre in the 1970s is a good case study.

Almost every credible economist, business leader, financier and global leader said the same thing:
You’d be nuts to leave.” Including President Obama on his most recent UK visit, although he didn’t use quite those words.

So what the….?

It’s interesting to look at the demographics of who voted to stay and who voted to leave. There are three very obvious splits:

  • If you were over 50, you probably voted to leave. If under 50, you probably voted to stay.
  • Rural and industrial England voted to leave. Big cities, Scotland and Ireland voted to stay.
  • If you’re more highly educated, you voted stay. Less so, you wanted to leave.

My mother is a good case in point. She enjoys her European vacations and drives a German car. She’s a highly intelligent, well-educated lady, aged over 50, and lives in semi-rural England. She voted to leave. To keep the peace, we’ve agreed to disagree.

As I see it – with the benefit of hind-sight –a couple of big themes influenced a lot of people.

Why can’t we just keep things like they were?

Most British people are inherently conservative (small “C”) – meaning that they don’t like change. There has been a lot of change in the past couple of decades, most of which is attributed (fairly or otherwise) to “Europe”.

By the far the biggest of these was immigration. Mainly because lots of Europeans speak English, and because the British economy is doing fairly well, Britain has seen millions of immigrants, often from former Eastern Europe. The “Polish plumber” has become a national stereotype. Even though ethnically similar, it has changed the national make-up.


Also, at least partly because of this immigration, the population of Britain has grown from about 50m (when I was a kid) to about 70m now. And this on an island that is only 17 times the size of Algonquin Provincial Park. It’s hard to explain how much this affects you, if you’ve never lived it.

Plus…. Over time, as European nations have become more integrated, there has definitely been a transfer of power and rule-setting to Europe. If done in a minimalist way, there are strong arguments for making some decisions at an EU-wide level. But…. many people believe that it has gone too far. Time to take back our sovereignty. Including control over our borders.

What did Europe ever do for me anyway?

This mirrors the argument about globalization that is currently raging in the US. High level, trade and integration will normally enrich nations. But it also creates winners and losers within nations.

If you’re reading this blog, frankly, you probably fit the profile of a winner. You welcome the chance to travel, work or trade in many places. You appreciate things being (mostly) cheaper than they would be otherwise. Particularly the fact that your Polish plumber does the same job for 30% less than the English guy you used to hire.

But many millions of people haven’t benefitted this way. For example, your former plumber is losing work to foreign competitors or immigrants. He reads about how much of his hard-earned taxes goes to Brussels and doesn’t come back home. His kids’ schools and their local hospital are swamped by all these immigrants. And he’s unlikely to up and move to another country, or start plumbing in Germany.

What about all those experts telling him we should stay in Europe? Well, aren’t they exactly the sort of people for who Europe works out? So….. they would say that, wouldn’t they? And does he care if some London bankers lose their jobs?

Even if it’s good for the nation – what’s Europe done for me anyway?

Now what?

Well, that’s the interesting one.

Under the various Treaties, you withdraw from the EU by invoking “Article 50”. This starts the clock on a 2-year negotiating marathon in which the UK sits on one side of the table and 27 other European nations sit on the other. By the end of 24 months, you are no longer an EU member.

Nobody’s ever done this before, so we have no idea what shape this divorce will take. It could be amicable – with close working relationships maintained – or it could be a furniture-throwing, name-calling dispute that leaves everybody worse off.

I hope it will be amicable. But the early signs aren’t good. Several European leaders have stated – fairly explicitly – that it’s important that Britain gets a bad deal, so as not to set an example that might encourage others who might consider leaving.

And – honestly – anybody who believed the promises of a Brave New World the Brexiteers were peddling was deluding themselves. If you want to keep access to the market where 50% of your exports go, you need to agree some sort of access deal. And – at the same time – you want to close your borders to the free movement of European citizens, and to make your own rules about things like health and safety, common standards and security? Dream on.

The Brexiteers pointed to a few other models. For example, Norway is a member of the EU’s free-trade area but not an EU member. Well, guess what. Norway has to follow European rules, and also pay just as much into the European budget. Can you have your cake and eat it too?

Some of the more lunatic-fringe are convinced that Britain can cut itself off from the European continent, and reboot the old Empire or Commonwealth, without any loss or damage. Yeah, right….

Buckingham Palace

So…. It is going to be messy. Theresa May, the new British PM, is going to have several really tough years. Hard negotiations with Europe – and all the newspapers will scream “Betrayal” at each compromise that falls short of what the Brexiteers promised.

Oh, and Scotland was strongly in favour of remaining in Europe. So we can expect another referendum on Scottish independence – which may be successful. And pity poor Ireland, an EU member trapped on the far side of the UK.

Even the best case scenarios bring years of uncertainty. There is no upside to this outcome.

Like I said: Worst. Vote. Ever.