Friday, June 24, 2016

Is it a rejection of Brussels or a rebellion against the elite?

Britain has just voted to leave the European Union. Within the UK there is a strong divide with England and Wales voting Leave and London, probably because of vast numbers of immigrants, Scotland and Northern Ireland voting Remain. What was this referendum all about? Already there is speculation about who wins and who loses but it may not be that simple. Prime Minister David Cameron called the referendum in 2014 because he wanted to unite his party, the Conservatives, for general elections in 2015. He also wanted to blunt the challenge of the UK Independence Party and its leader Nigel Farage who wanted the UK to leave the EU. In 2014 there was a referendum on independence in Scotland which was defeated because the Scots were told that an independent Scotland would have to renegotiate its membership of the EU. In 2015 the Conservatives won absolute majority in general election by scaring English voters that a coalition between Labour and the Scottish National Party would give the Scots veto power over the English despite being a smaller country. Having given his word Cameron decided to hold the referendum on 23 June, probably sure that the British will vote to remain a part of the EU. Well, they have voted to leave. Now what? Markets all over the world are falling, the pound has fallen to 1985 level and the Euro has dropped sharply, as traders seek safety in the dollar. Markets do not like uncertainty so volatility will persist for a while but will stabilise once politicians start working out the detailed steps of the break up. There will be unintended consequences. Having won an election by promising the referendum Cameron will probably have to resign, Nigel Farage will find his support disappearing as the reason for his party becomes moot, and the Scots will want independence from Britain to stay as member of the EU. A Sinn Fein leader has already called for a united Ireland, because his party had campaigned for Remain. Britain is a country where political correctness has reached such an extreme level that children as young as 4 years of age were given a choice of genders that they would like to belong to. So, was it racism that made people vote to leave the European Union? It was probably economics. The working class have not recovered from the crash of 2008. They see migrants flooding into Europe and are afraid that migrants will take their jobs. Also they do not trust their politicians. The irony is that the champions of the working class, both Boris Johnson and Michael Gove are educated in Oxford which is apparent in their English pronounciation. Will Brexit improve the fortunes of the poor? We shall see. It is a bold experiment.

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