THREAD: As Johnson heads to Brussels, let's remind ourselves of why the scourge of Britain - Brexit - even exists.
1. Racism, bigotry and fraud all have a role to play in Brexit.But frankly, we have our own government’s flawed economic models to thank for the reason why people felt desperate enough to opt for the unknown and vote leave in the referendum.
2. As a passionate advocate of the European project, I simply cannot ignore the fact that, despite Remain being the official position of the British state and the two major parties, the people said ‘no’. We have to ask ourselves ‘why’?
3. There is not doubting the Leave campaign conducted itself in a frankly a mendacious and borderline illegal manner, but still, there is no escaping that the Leave vote just scraped through.
4. But, while this thread evaluates the impact of a failed economic policy on the Brexit vote, the resulting events of the referendum vote reaffirms that xenophobia also has a major part to play.
5. Ethnic minorities in Britain are facing rising and increasingly overt racism, with levels of discrimination and abuse continuing to grow in the wake of the Brexit referendum, nationwide research reveals.
6. Indeed, an Opinium Survey shows 71% of people from ethnic minorities faced discrimination, up from 58% demonstrating that there is a rising incidence of hate, fuelled by the use of immigration as a scapegoat for anti-EU sentiment.
Back to economics, George Osborne and David Cameron approached the EU Referendum campaign from the wrong angle. They believed that economics- the belief that Brexit would make us poorer would actually trump the case that leaving would give us more control over the UK as a nation.
7. Ultimately, they did not realise that for many who had essentially lost their identity through the burden of crippling austerity and spending, national self-determination would be a far more appealing notion to voters.
8. Despite being a complete lie, Cameron and Osborne also had no real respone to the Leave campaign’s spurious argument that Brexit could save our NHS with an injection of an extra £350 million a week.
9. To many, it may seem as though those who are worse off have just made their economic wellbeing a whole lot worse: less job opportunities, less foreign direct investment and an extension of austerity.
10. But this is the crux. Many of the people who voted Leave were ‘not wrong’ in the sense they didn’t know what they wanted. For them, the referendum was the best chance they had to send a message to the establishment that would not accept further oppression.
11. This illuminates a more widespread reality: that the UK and most of the western world is based upon a deceptive and unsustainable economic prospectus.
12. The Tories (and even Labour) have always argued that they govern for the nation as a whole. Clearly they were governing for those who work in the City and the service section in London and the southeast.
Take Reading and Mansfield, for example, of Britain’s 63 cities Mansfield voted to Leave by 71% while Reading voted 58% by contrast. Why, you ask?
14. Mansfield has has been trying to reinvent itself after its dependence on mining and textiles. With no university and only a tiny private sector, average wages are 19% below the national average.
15. Reading by comparison is highly linked to London, Heathrow and affluent Thames Valley. Wages are 18% above the national average and welfare payments around £1100 per individual. So why challenge this?
16. For a while in the UK, a system of liberal capitalism that favoured the richest did, in the short term, favour us all. Between 1992 and 2008, Britain’s economy grew faster than at any time since the nineteenth century. The rich became richer.
17. But this ‘golden’ age was an illusion. We now know that much of the growth was generated by dangerous risks taken by banks and other institutions. Blair and Brown ignored the unbalanced and unsustainable structure of our economy - too reliant on the city.
18. Even in these years of ‘boom’, millions of poorer citizens only saw very modest improvements in living standards. Even before the 2008 crash, output per worker - which underscores living standards - was not converging fast enough with much high levels of our EU partners
19. Perhaps one of the biggest ies was that austerity by the coalition govt in 2010 would distribute the economic burden equally between rich and poor. Wrong. What we are seeing now- e.g the crisis in social care is a direct result of the decisions of Cameron, Clegg and Osborne
20. It was left to the Bank of England to restore and maintain some semblance of economic momentum.
21. But even then, this had a disproportionate impact. Because by slashing interest rates and creating £435bn of new money, it disproportionately helped the rich. Why? Cutting the price of money inflate the price of assets such as houses, property, shares and government bonds.
22. The poor are very unlikely to own houses or significant assets. So, in a terrible display of counter-intuition, the very measures taken to reduce the affects of the banking crisis actually widened the wealth gap. The Bank worsened endemic inequality.
23. So what on earth were poor families in the deprived North-East and North-West (Struggling to make ends meet) to think when they saw the government and Bank of England essentially shape economic policy to help those in the south?
24. So we should not be surprised that the immobile, unemployed and insecure northern cities did not need to think twice in hitting back at the elite in the EU referendum. It was the chance of the unprivileged to give the establishment the lesson it needed.
25. Economic inequality in modern Britain is stark. 7 of the poorest 10 regions in Northern Europe are in England. ALL had substantial Brexit majorities.
26. Studies have found that areas that supported Leave had an overall weaker economic structure, with lower levels of income and life satisfaction, fewer high status-jobs, an aging demographic, and lower levels of educational attainment.
warwick.ac.uk/fac/soc/econom…
warwick.ac.uk/fac/soc/econom…
27. In a recent paper, forthcoming in the American Economic Review, these “left-behind” parts of the UK were particularly reliant on the welfare state – and hence, particularly vulnerable to welfare cuts. wrap.warwick.ac.uk/106313/
28. The vast benefit cuts starting in 2010 predominantly hit already struggling regional economies that were recovering very slowly from the global financial crisis. Millions of working families were left worse off. ig.ft.com/austerity-map/
29. Aggregate figures suggest that overall government spending for social welfare and protection, such as unemployment, housing, tax credits and disability-related benefits contracted by 16% in real per capita terms, reaching levels last seen in the early 2000s.
30. And the Office of Budget Responsibility estimates a total of £45.4 billion will have been cut from the welfare budget from 2010 to 2021. By 2020, relative to 2010, day to day real government spending per capita will be 15% lower.
31. So this is what I conclude, Britain's Brexit voters are right. They have been neglected. But the answer it not to leave the EU- it is to change Britain, to improve the lives shut out from economic prosperity.
