So – that’s it then. Brexit. The UK will be leaving the European Union at some point in the next 2 to 3 years. New treaties and trade deals will be struck; a new leader will be elected for the Conservative Party and, (by the looks of things), Jeremy Corbyn will be ousted from his role as leader of the Labour Party. At the moment, things look bleak. The pound has lost ground against the Euro and the Dollar. The FTSE 100 has fallen by 5%. There are dire warnings about the implications of the decision to leave on jobs, economic growth, pensions, the NHS, higher education, and national security. On the plus side, from the Brexiteers’ perspective, the UK has regained control of the country, and can now move to sort out immigration.
At least, that’s the narrative that ran throughout the campaign. ‘Project Fear’ pointed to economic disaster if Brexit succeeded. Vote Leave raised the spectre of unlimited immigration and even more European interference in UK affairs if the vote was to remain.
In reality, it’s unlikely that either of these domesday scenarios has any real basis in fact. There will be a short-term shock to the economy, but the Bank of England and most responsible financial institutions had already made provision for that. There will be an impact on research and development, and capital investment decisions in the private sector; and whoever is Chancellor of the Exchequer by this time next week will probably need to increase public capital expenditure to take up that slack. The rate of immigration to the UK will decline as some non-UK citizens decide that they no longer want to stay; and others decide against coming here in the first place. There will be skills shortages and higher job vacancy rates as a result. Unemployment (already at or around near historically low rates) will not be effected to any great degree. And immigration will return to something near current levels as the reality dawns that in fact we need people to do the work that generates the revenues that the country depends on.
The rash promises of the Leave campaign (£350m a week saved; remove VAT on domestic fuel; maintain farm subsidies at current levels; reduce immigration below 100,000 a year; and so on) will be slowly diluted or abandoned altogether. By enlarge, it’s very likely that in a couple of years, things will be pretty much the same as they are now.
The problem, of course, is that because things will be the same, the anger, the sense of powerlessness, the disillusionment with the political class, the belief shared by at least 51% of the voting public that they are not being served by the current system, will remain. And the big question then will be : so what happens next?
That’s the challenge for post-Brexit politics. How can whatever emerges from the train-wrecks that are the current Conservative and Labour parties re-engage with people in a way that makes the political process real and meaningful again. It won’t be easy.