The die is cast; the United Kingdom is leaving the European Union at the end of January 2020 after 45 years of membership of the various guises of the union. The transition period during which negotiations for a new trade deal will take place will not go beyond December 2020, according to the UK government, but the EU seems to think differently; it will take longer than that to negotiate a deal that would be acceptable to both sides.

Publisher – London

On 23rd June 2016 the UK went to the polls to vote on a referendum that gave the electorate the choice to remain in the EU or to leave the EU. Overall there was, to everyone’s surprise, a small majority that voted to leave – 52% to leave and 48% to remain. The home countries were evenly divided; England voted to leave although London had a big majority to remain, Scotland voted overwhelmingly to remain as well as Northern Ireland (a small majority), Wales voted to leave. The irony of the situation is that the parts of the UK that benefited the most from EU subsidies voted to leave; the North-East, the North-West and Wales that are the most deprived areas of the UK and received the most money voted overwhelmingly to leave. It is puzzling as the EU has been pouring money into the deprived areas of the union, and one would expect that people in those areas would acknowledge that the EU is a force for good. So how do we explain this?

Before going further into the Brexit campaign, it might be best to look at the factors that gave rise to the movement for the exit. There have been many attempts looking at the reasons why the British people voted to come out of the union but most of them have offered piecemeal explanations, just looking at the symptoms rather than the historical causes. Some people think that Britain has lost its sovereignty and its power to control its border and its money, and that the country is subservient to the EU, especially to the European Court of Justice in terms of legal decisions. Also as the free movement of labour is one of the pillars of EU membership, immigration from the EU countries is uncontrolled and that brings about a certain resentment among the local population. In short the UK is seen to be under the thumb of Brussels. Others are deemed to be harking back to the days of Empire when Britain ruled the waves. But one has to make it clear that this is not a matter of right versus left. Both Labour and Conservative are internally divided on the issue although the Liberal Democrats and the Scottish National Party are strong remainers.

To try and get a proper analysis, one has to cast the net wider. We have witnessed in the world, but mostly in the West, the rise of what some analysts call populism, itself a loose definition. We have witnessed the rise of the Front National in France, AfD in Germany, UKIP and the Brexit Party in the UK, and various similar small groupings in other European countries. We also have the Justice Party in Poland, Matteo Salvini in Italy, Victor Orban in Hungary, Donald Trump in the USA – the latter are all in power in those countries. There are various reasons as to the rise of those movements in the respective countries. Of course all countries have similarities and differences, and there are specific factors that bring about certain outcomes. One strong element runs through all of them – xenophobia, which has been used by the various groups in their quest for political power. We’ll come back to that.

Some people think that Western democracy is going through an existential crisis. Again they only look at the symptoms and not the causes. Ordinary people in Europe and the USA (and indeed all over the world) feel disenfranchised and they do not think they have a stake in society. There is a feeling of helplessness, resignation and betrayal. Traditional political allegiances are being questioned.   Communities have had their soul ripped out as industries shrink and factories close down and there is no longer any job security. There might be many reasons for that. At the end of the 1980s we published a 2-volume book entitled ‘Transforming China’s Economy in the 1980s’ which deals with how China was getting ready to launch itself on the world market to become the workshop of the world, just as Britain was in the 18th and 19th centuries. In Europe and the USA warehouses replace factories and skilled jobs give way to semi-skilled and non-skilled ones, bringing about a decrease in wages and standards of living. On the other hand the factory owners who have outsourced production to countries with low wages are increasing their profits and getting richer. Tax receipts for governments are decreasing and it is the public services, like health and education, that bear the brunt of the cuts. Whatever social progress was made in the 1960s and 1970s is being rolled back. Of course the Thatcher-Reagan era had witnessed the beginning of the onslaught. In one word insecurity was rife.

That situation is exacerbated by the incoming of immigrants into Europe and the USA. Although in formal terms colonies have been freed, the consequences of colonialism are still being felt. As all production in the former colonies was geared towards the metropolitan countries, after independence there were not enough jobs for the population, and coinciding with post-war reconstruction in Europe and the demand for labour (skilled and non-skilled), immigration into Europe gathered pace and the situation has not changed. Even countries that did not have any colonies, like Sweden, Denmark and some Eastern European ones, have been experiencing immigration on a relatively large scale. To add to the complexity of the situation, the mode of production has changed in its nature – it has gone through mercantilism, industrial capitalism, financial capitalism (in various guises). Of course that class has fragmented and has expressed its varied interests sometimes in unison and sometimes in opposition to one another, depending on what is at issue. Economically and politically the terrain is uncertain and unstable, but ordinary people who exercised their suffrage once every 4 or 5 years are being pushed aside.

Legal immigration which has been restricted over the years gives way to illegal immigration. The influx is the result of what is happening in the South as well. Whereas before the 1980s most southern economies were insulated from competition with goods produced in the West, and that protected nascent and existing industries, with structural adjustment all barriers were removed. Southern economies were forced by the IMF to open their doors and in many cases their markets were flooded with cheaper imported goods that were subsidised by the EU or the US governments. There is the example of how the poultry industry in South Africa was decimated by the import of cheap chicken from the USA. Add to that the wars that caused more disruption and destruction. It certainly was the recipe for more instability and uncertainty, which spurred on the movement to Europe and the USA. That added to the xenophobic feelings of the native populations and that was used by extreme right-wing parties.

In the UK, the scene is set. The mining areas have been decimated by Thatcher and unemployment there was rife, both among the older workers and the younger ones. It was a desert and desperation. The Blair government did not help either.   So the vote every 4/5 years is just a ritual that is meaningless for those people. On the other hand de-industrialisation is taking place on a big scale as most production was outsourced to China, India and other countries. There has also been a proliferation of zero-hour contracts that does not offer regular employment, and what people call the ‘gig economy’ becomes widespread. In short although there has been a decrease in unemployment, working people have to get 2 jobs to make ends meet. After the financial crisis of 2008 and after the election of the coalition government of Conservatives and Liberal Democrats, an era of severe austerity began. There were huge cuts in public services, which affected employment in the North-East and North-West which depend on those services for employment. There again warehouses replace factories and wages suffer, which is why people have to get 2 jobs to make ends meet. Ordinary working people felt betrayed by the Labour Party of Tony Blair and they started questioning their own loyalties to the party.   While the majority still remain faithful, some desert to right-wing parties that use the discontent for their own agenda.

Their great opportunity is still to come. When Prime Minister Cameron, to allay malcontents in his party, decided to give the electorate a referendum on EU membership, the people in those deprived areas turned up en masse and gave their verdict. It was a great surprise on the night that still reverberates and that created a very divided society and country.

In the next article we will deal with the campaign and look at the issues that were uppermost in the mind of the voters.