Brexit Anxieties

Thomas Klikauer & Norman Simms

In 2016, the former British Prime Minister David Cameron’s l’idée fixe of a referendum on Brexit slowly became reality. The Tory’s faithful plan was that Brexit would make Britain a strong independent trading partner with other nations. The British people were told, that Brexit would strengthen the UK as global political player. The promise was and still is that the UK, as a single entity, would be in a much better position when trading with the EU, the USA and China.

Supported by the pro-Brexit media and the Murdoch Press, Boris Johnson’s infamous Brexit Painted-Bus proclaimed these lies and deceptions, what Chomsky once called the Spectacular Achievements of Propaganda, won the day.

In June 2016, 52% of the British people voted for Brexit. By 1 January 2021, the UK finally exited the EU. After forty-seven years of EU membership and seemingly never-ending Brexit negotiations, it happened but Brexit has not ended.

The final period of seemingly never-ending negotiations was eventually over. For the fifth time in a row, a British government carried through its rather illusive promise of the UK becoming a global Britain. So far none of the UK’s Tory governments fulfilled its many Brexit promises. Like many people on New Year morning, Brexit caused some very serious hangovers. Today Brexit looks still a bit untidy. Perhaps Brexit might even shrink the UK to a significantly smaller country, as Scotland seeks independence.

According to UK’s Ministry of Foreign Affairs, the transformation from EU member state to its l’idée fixe of a so far unseen economic bonanza, means that the British government will have to invest rather heavily into global relations. In the hallucinations of the UK’s conservatives, a post-Brexit rule-based international order will present Britain with an opportunity to present itself as open and confident on the world stage. Among the many promises is Prime Minister Boris Johnson’s delusion that the UK will flourish as a prosperous free trade nation on an almost unimaginable scale.

Apart from grandstanding announcements like these, not much has been achieved. Instead, many of Mr Johnson’s de Pfeffel’s promises for a great future for the UK stand in sharp contrast to the fact that his beloved United Kingdom has just given up a time-honoured access to the world’s largest free trade area – the European Union (GDP: €16.4 trillion). Anti-Brexiteers claim Brexit was completely unnecessarily. Undeterred, the British PM made a deal with the European Union tied up with a neat pink bow on Christmas Eve. The result: after 1 January 2021, the UK-EU trade became even more complicated for the British and the EU.

Every economist and many non-economists know that the UK’s dependence on the EU is much greater than the other way around. In this game, size matters. Put simply, the EU has size. The UK does not. Even during last few months with Brexit looming, Britain’s conservative government had been unable to produce any advantageous agreement with other industrialised nations. The much acclaimed free trade deal with – whom? – is still a mere mirage.

Yet Johnson’s UK remains in good condition – well, so far. The UK has retained some power to assert itself on the world stage. It is still the fifth largest economy in the world. It is still the core of a fifty-four nation encompassing Commonwealth. It is one of the five global nuclear powers even though in economic terms this counts for very little. And finally, the UK has a permanent seat on the UN Security Council. On the eve of Brexit, the UK was still in a privileged position. On the downside, it already had all these advantages while a member of the European Union.

Overall, then, UK’s current position is still based on historical advantages that were, if anything, strengthened through its EU membership. Brexit came with a certain magician’s puff of smoke and a silly romantisation on the part of Brexiteers. These pro-Brexit advocates made something seem to appear romantic that wasn’t romantic at all. Unsurprisingly, Brexit is a step into the unknown future – not into the glorious past. Britain will have to work out its future role in Europe and in the world.

In 2021, the British will get several opportunities for this. In the new year, the UK will assume the G7 presidency. It will lead an exclusive club of the largest democratic industrial nations. In this role, Britain can invite Australia, India and South Korea to take part. It can strengthen these democratic powers opposed to authoritarian economic powers – above all China. It is possible that Britain might be able to move the G7 to a G10.

Furthermore, the UK will be hosting yet another important diplomatic event. The UN Climate Change Conference known as COP26. This will take place in Glasgow in November 2021. As a city in Scotland, Glasgow’s people are not happy with Brexit. Polls show that the majority of Scotland’s population does not support Brexit.

During the last three months before Brexit came into effect, 39% of UK people said that the Brexit decision was right, while a strong 49% stated that Brexit was wrong. Beyond that, Britain remains divided over Brext. In a December 2020 poll, 34% were against re-joining the EU, 32% would back an application to re-join the EU and a whopping 34% said “I don’t know”. This is a very different in Scotland than five years ago. On the day of the 2016 referendum, a whopping 62% of Scots voted to stay in the EU (38% voted for Brexit). Brexit therefore might even lead towards Scottish independence.

Meanwhile, back in the UK and Boris Johnson’s promises to the contrary, Britain’s influence will be smaller in many areas. Again, size matters. In the future, the UK will have to align itself with larger economic powers to offset the EU. In Europe, the EU will set the tone – not the UK. In his EU negotiations, Boris Johnson already abandoned all ambitions not to adhere to the EU’s labour, social and environmental standards. The Tory plan to hit the English working class class hard, does not seem to be materialising. Mrs. Thatcher’s ghost is still rolling over in her grave. Things will be similar is other areas. In short, the negotiating power of Great Britain is much diminished.

Complicating further negotiations is the fact that the British conservative government has turned out to be a very unreliable partner. Negotiations with the EU since 2016 have shown as much. Instead of solid negotiations, the opposite happened. There were shifting ideas, reversals, omissions and untruths by the string of UK prime ministers. To the annoyance of EU negotiators, these flip-flops had became almost a routine. Internationally, this has been sending largely negative signals to any future trading partners.

Inside the UK, some British people might have already asked themselves three key questions:

+ After the 2016 decision to leave the EU, did London’s stock market go up or down?;

+ Did the value of the UK’s currency (£) decline or increase?; and finally,

+ Have house prices in London gone up or down?

An interesting Example in Boston

Undeterred, people in the northern city of Boston, voted to leave the EU. Located one-hundred miles north of London, Boston voted for Brexit by a margin of 76%. Yet now in 2021 in the first days after the end of Brexit’s transitional period there is no real joy – only worries in the pleasant little town.

In fact, on 1^st January 2021 what the overwhelming majority of Bostonians had voted for four a half years earlier came into force. Along wit the rest of the UK, Boston was withdrawn from the EU’s single market and customs union. Today, as many of the Brexit-voters walk through the half-empty winter streets of their city in Lincolnshire, they don’t feel as if a good dream has come true.

Instead many Bostonians feel the very opposite. We don’t think the UK-EU deal is good, many have said, while others in Boston have moaned, We don’t see how we will benefit from this. What’s more, many Bostonians now suspect – quite rightly – that Britain will continue to adhere to many EU rules in order to trade. A wholesome few speak rather clearly when it comes to Brexit expressing unhappiness with Britain’s Brexit politics. This is not the Brexit we voted for!

As if that weren’t enough, during the Corona pandemic, many Bostonians have lost jobs in local companies. These newly unemployed face a much diminished social welfare state after years of Thatcherite neoliberalism turbo-charged with austerity. As a consequence, many in England had been paid less and less. Wage stagnation and the consequent insecurities are taking their toll. Many worry whether their children will be working in insecure jobs, or any jobs at all; whether they will ever be able to afford a decent house or flat; and whether they will live a safe and healthy life.

Some people in Boston have already suffered greatly, more than their fair share. The blame has shifted toward migrants from EU countries settling in the UK. Quite a few native Bostonians have been made to believe that migrants have overloaded the local infrastructure and pushed down salaries.

Xenophobia, nationalism, and even racism turned the blame away from Neoliberalism and towards an external factor: the EU and its migrants. Propaganda obscures what neoliberalism does. It deliberately targets the only institution able to secure reasonable wages: trade unions – acknowledged even by the International Monetary Fund. Because of this, leaving the EU will not solve the problems of the British economy caused by neoliberalism and austerity. In fact, it will exacerbate them.

Yet the still picturesque medieval town of coastal Boston is considered a Brexit stronghold. A whopping 75% of its local residents voted to leave Europe in 2016 – more than anywhere else in the UK. Today, local conservatives desperately trying to explain away Brexit’s overwhelmingly negative consequences, claim, Too much has changed in the last twenty years, implying immigration. How much is too much?

In 2001 Boston’s residents were 98% white British. The next census ten years later showed that about 10% of the 64,600 Bostonians were born in Eastern Europe, 90% were white and British. Most of the migrants came from Poland, Latvia and Lithuania. Despite the city being 90% British, the l’idée fixe is that migrants are bad is a rather recent concept pushed by right-wing populism.

For years, migration has been seen as being good for the economy. The USA, Australia, Canada, etc. have proven this. The OECD, for example, believes that the overall impact of migration remains rather small. It argues, that an increase of 50% in net migration of the foreign-born generates less than one tenth of a percentage-point variation in productivity growth. Small but still positive. In other words, it is not migration but neoliberalism and austerity – home grown in the UK – that have contributed to wage stagnation and the rise of the precariat.

Yet, Boston needs every single migrant. In a local family business which grows flowers just outside of Boston, about forty local employees are from Eastern Europe. The company’s boss believes that he needs every single migrant. Without those migrants, there will be no flowers, no business and perhaps not even the food that ends up on the plates of the British people every day. As in many industrialised countries, it is migrants that do the harvesting.

Brexit is set to exasperate these problems. Post-Brexit, there will have to be a new migration system. It will apply in the UK from 1^st of January 2021. Under the new system, if people seek to work in the UK – whether they are EU citizens or not – they will need to earn points. Applicants need to demonstrate good English language skills and having a local job offer with a minimum salary of £20,480 per year in an industries with an acute labour shortage.

Local employers in Boston meanwhile, fear that many companies in the agriculture industry could go bankrupt if these rules are strictly applied. Local employees earned between £25,000 and £30,000 a year. But not with a 40-hour contract. They would have to work up to 55 hours a week. Local people who are willing to do this are very few. As a consequence, local employers hope that most of Eastern European employees will remain.

Indeed, many have already submitted applications for the right of residence. A government pilot project will allow seasonal workers to come to the UK for six months. Yet, local employers see a new danger rising. They fear an increased bureaucracy and negative currency exchanges – weakened by Brexit. This might make England rather unattractive for migrants in the long term.

On the shift from an EU bureaucracy towards increased home-made British – more forms to export goods, etc. – Johnson simply said, it is a tragic reality. He did not mention that this is something he has advocated for years and created himself.

It is all the more astonishing that some local employers and small business owners voted for Brexit in 2016. Rather mistakenly, they were let to believe that Brexit would end EU bureaucracy and the much feared red tape. Many also thought that Brexit was about Britain escaping the dictate of the EU – a common hallucination induced by the right-wing press and by right-wing populism. Even today, some in Boston would vote in the same way as they did in 2016 – that is, to leave the EU; although many small business owners in and around Boston are preparing for a stony path ahead. Local business people expect rough road to go least 12 to 18 months.

Most local business owners also know that they will not get immediate benefits from Johnson’s Brexit agreement. On the eve of the full impact of Brexit, some local products are still no more competitive on the domestic market than those imported into the UK. In general, many in the agricultural business are more concerned about competition from non-EU countries than from the EU.

Meanwhile, many Eastern Europeans working in Boston see Brexit in a rather relaxed way. Some believe that the UK is leaving the EU because they have been there for too long. Several non-UK workers have been living in Boston for years. However, for a long time, these workers did not believe that the final break would come and that Brexit would be carefully and gradually implemented. Now they are starting to feel consequences in a rising flood of xenophobia.

Others have secured the right of residence in the UK which is still a pre-Brexit arrangement. Eastern Europeans say they are friends with their English neighbours. Yet on New Year’s Eve, there were no public celebrations in the city of Boston, a small city with strict Coronavirus requirements. Even local Brexit voters and supporters have not celebrated the divorce from the EU. Some even believe that the UK should have left the EU four and a half years ago and astonishingly without an agreement.

However, locals are no longer irritated by Brussels. Now they are irritated by Prime Minister Boris Johnson. Some locals openly say, What a joker! Boris Johnson always wanted power, wrapping himself in a Churchillian rhetoric. Some locals in Boston believe, We bet people in Europe are laughing at him now. They have been laughing even before Johnson’s false Italian condom claim.