A Downbeat Dawn
My partner is from Stoke-on-Trent. I know Stoke as the birth place of the greatest sportsman in the world, Phil ‘The Power’ Taylor. For those unforgivably innocent of Darts, you might instead know it as the world capital of ceramics. Born myself in East Bergholt, where many as hour is spent saying ‘crikey, that Suffolk Punch is a big horse’, I’d argue back and forth with my Stokie love over word pronunciations and the origins of the oatcake. Brexit slaughters this innocence. The day after a hefty 69.4% Leave vote, the BBC unleashes its reporters on Stoke to repetitively patronise the locals: ‘what were you thinking?’. Perfect examples of bloody-minded ignorance are paraded before our eyes. A daily ritual of two pronged ‘asymmetric information’ tutting follows. It begins with a reference to ‘moral hazard’, with the poor Stokie victim of ‘£350 million bus slogan’ fibbing. It then shifts to an ‘adverse selection’ variation. How can we know the impact of Brexit? It is through the wisdom provided by samurai economics. Armed with a trade theory katana and a predictive wakizashi, the BBC economic correspondent can whip out the book of truth. The average Stokie, in comparison, is martial art untrained and shies away from the sharp edges. It’s a poor metaphor, but a poor one fits. Rather than arguing over how to pronounce book or nook, my partner and I instead spend our time in unfamiliar territory: agreeing with each other. It is lazy to blame the Stokie. It is wrong to argue that it is a simple reflection of knowledge deficiency. Instead, we deliver a two-stage scoff of the policy-maker. First, we map out how policies naturally engineer rational Leave preferences. Second, we accuse our Brexit negotiators of making a dog’s dinner of their simple task. It is because of their unwavering economic naivety that we are on a one-way journey towards Brexit calamity.
Stage 1: Burslem Brexiteer
Rewind back to 1979 and the election of Maggie Thatcher. I like to think of this as a marmite era of economics. You may love the supply-side economics, with deregulation and privatisation curing 1970s economic malaise. You instead may hate the artificially created monetarist catastrophe, with the manufacturing slump rivalling the Great Depression. It is this deindustrialisation which is key; a phenomenon which amplifies under New Labour. Between 1990 and 2016 manufacturing’s share of national output halves. Over 2 million jobs are lost. It isn’t all doom and gloom. Between 2009 and 2013 it is estimated that Stoke’s economy grows by 21%. However, it is but a blip. It is the cities which are transformed into service-driven economic hubs who soar. Regional inequalities become horror reading. London’s Gross Value Added per head in 2017 is more than double that of Stoke; £48,857 versus £20,908. The hero calls for regional policy. Our policy-makers ignore her and instead deliver austerity. The poorest cities bear the brunt. The Centre for Cities report a 24% reduction in Stoke local council spending.
Is it a stretch to ponder that the Stokie Leave voter reflects on such regional inequalities? Why vote for the status quo if the beneficiaries are largely shopping down Chelsea’s King’s Road?
Stage 2: Nincompoop Negotiator
Its 2016 and I’m having a dandy dream. The Conservative and Labour Parties are contemplating over how to implement the referendum result. They’re a cunning bunch. They decide to lay out all voters along a ‘Mohs Scale’ hardness line. The line starts with those wanting to leave Brexit no matter what. They cheer a No Deal Brexit outcome. It ends with those already demanding a new referendum to deliver the vote they desperately crave. The two parties, in a bid to alienate the fewest voters, ignore these extremes. They recognise the vote is close, 52-48. They look for the fellow in the middle of the line. That’s me. I’m Leave, but it’s a soft Leave. I want to stay in the Customs Union and I’m also sympathetic to the Single Market. I’m their voter of choice. They both agree that we should deliver ‘Norway Plus’. Parliament falls into line. The EU rubber stamps, having no basis to deny the consensus. Roll forward to August 2019 and, because of the cheer of the median voter, there is no economic uncertainty. A sovereign Britain still gets to determine its future, shifting either back towards European integration or further away. That’s for tomorrow’s dream mind you.
The dog barks and I wake up. The truth is a slap in the face. Theresa May ignores my median views. Conservative negotiators instead are pretending that the secret of success is a ‘Brexit means Brexit’ incantation. The Brexit Game kicks off. The Institute of Economic Affairs confirm that it’s not looking positive. The EU must not appear as a soft touch. The UK is desperate to avoid No Deal. The result is a punitive deal that goes down like a lead balloon. Polarisation of opinion explodes; it is increasingly Hard Brexiteer versus Remainer Ultra. There is no longer a median voter sweet spot. Further negotiations are needed. A clever civil servant assists by reading up on more complex game theory analysis. Lessons abound. Delay. Waste time. It will put pressure on Europe who are desperate to avoid the foolishness of No Deal. It will encourage concession. Moreover, appear irrational. The EU will be less likely to take risk; British bargaining power will surge. But it’s far too late. A new Boris Johnson government is forced on us. Polarisation of attitude only intensifies.
A Shimmering Sunset
What’s my point? I sound driven to a pro-Stoke conclusion. Given the in-laws, that does deliver a rather jolly externality. No, there’s even greater positivity to be had here. It doesn’t matter your position- Leave, Remain or Disillusioned- you have been severely let down by politicians who have consistently ignored economic reality. So, what can we expect Post-Brexit? Surely, as they realise the consequences of their naivety, performance can only improve? With an optimist’s heart, I’ll go with two words: ‘lesson learnt’
Love your Brexit blog, perfectly balanced debate.
Think BBC Newsnight should invite you to discuss realism and Brexit.
The Brexit North Englanders just blamed the wrong people and system. The real cause of the economic troubles for families around the country has little to do with the EU and everything to do with the choice of the Conservative/Lib Dem coalition of chaos to impose austerity on them whilst assisting the kings road shopping elitists to become richer.
There is plenty of money available for wage rises and public infrastructure its just that most of it is in the wrong hands.
I see a lot of merit in that post. Indeed, the original title of this blog was ‘the blame game’. But perhaps we need now to find a way to glide away from that perspective? I notice, borrowing the binary language so preferred by the standard media narrative, that both Brexiteers and Remainers are united in seeking a rational economic solution. That particularly rings true in terms of the need to avoid the irrationality of a ‘no deal’ outcome. While I find cheer in that, the worry is that the ‘wrong hands’ do actually benefit from continuing chaos. Within a heterodox perspective, and with neo-liberalism increasingly under the spotlight, it could be seen as a fine-tuning of ‘divide and conquer’…