Britain and Brexit: the earthquake and its aftershocks

Six key issues reveal the early impact of the Brexit earthquake, but this is uncharted territory and more aftershocks will follow

Simon BulmerWhether you regard the referendum result with delight or dismay, what is already clear is that it has created an earthquake in British politics, with the tremors extending to mainland Europe as well. This outcome is the biggest challenge for British foreign policy since the 1956 Suez Crisis. It will require a fundamental rethink of policy and will lead to a changed, if not diminished, status for the UK in the world.  But it is the earthquake’s aftershocks in domestic politics that take us into uncharted territory.

First, the decision of David Cameron to resign in the aftermath of the referendum has left a power vacuum in the UK government. His resignation is understandable in light of the totally miscalculated gamble of his January 2013 pledge in the Bloomberg speech to craft a new relationship with the EU and put it to a referendum. The political goal of resolving divisions in his own party and outflanking UKIP has failed.  His ‘one nation’ Conservatism is in tatters, given the fissures that have been opened up.  The power vacuum of a wait until September for a new prime minister exposes the UK economy to incoming shockwaves from the financial markets.  Moreover, this situation arises from the actions of a politician who forged the coalition with the Lib Dems in May 2010 to avoid Greek-style chaos on the financial markets.

Second, the Labour Party has been plunged into a leadership crisis. The perception, particularly in the Shadow Cabinet, that Jeremy Corbyn’s campaign for Remain was lacklustre has resulted in a loss of confidence in his leadership.  There is a strong likelihood of a general election within the year.  Hence with strong electoral support for Leave in Labour’s former industrial heartlands, thus rejecting the party’s referendum position, there are fears of vulnerability to a political meltdown along the lines of Labour in Scotland.

Should it come to there being two leadership elections over the summer, the Leave voters will have exacted strong ‘revenge’ on political elites in Westminster.

Third, the lack of a clear plan on the part of the successful Brexit team was clear to many of the experts disparaged by Michael Gove during the campaign. However, the performance by leading figures in the Leave campaign in the immediate aftermath of the result has been very weak.  The SNP government was criticized in the 2014 independence referendum for the gaps in its planning but it had produced a White Paper that was over 600 pages. During this referendum campaign the quality of campaign information was lamentable.  As my colleague Matthew Flinders has argued, democracy was deceived and the public duped. It is to be hoped that the civil service has undertaken some contingency planning, although Iain Dale’s pre-referendum interview with George Osborne suggested the Treasury had done none!

Tony Blair presented an interesting analogy on The Sunday Politics on June 26th (the interview begins at 23 mins).  The situation, he argued, was like the British people having swapped their present house for a new one without having had a viewing (never mind having undertaken a structural survey).  It was a powerful image.  Over the coming weeks and months that structural survey is going to be undertaken, but only in earnest once there is a new prime minister.  This process will be interesting to watch unfold. Particularly interesting will be the reactions of younger voters, for instance the 73 per cent of 18-24 year olds who voted to Remain. The Brexit vote was a ‘revolution of the elders’. Similarly, the reaction of voters in London, the economic powerhouse of the UK, where there was also a clear majority for Remain.  The new London mayor, Sadiq Khan, presented a different Labour voice during the campaign and now has his work cut out in defending the interests of his city.

Fourth, in the north of England and other former industrial heartlands the vote for Leave was strong. However, as Owen Parker has pointed out, poorer working-class communities are quite likely to be seriously affected by the economic consequences of Brexit. Who will be standing up for these parts of England and parts of Wales in the Brexit negotiations?  The situation could be compounded further if George Osborne, who was invisible in the aftermath of the referendum result, departs the Treasury.  Civic leaders will have to fight to ensure that the devolution associated with the northern powerhouse is not a casualty.  They will have to fight hard for their interests in the Brexit negotiations, as they are represented weakly in the Conservative government and the Leave campaigns.  Scotland, Wales and Northern Ireland at least will be able to have their voices heard because of their stronger political and institutional underpinnings.

Fifth, the situation in Northern Ireland is particularly problematic. It is the part of the UK where EU aid has been most significant politically, in facilitating the peace process.  There the power-sharing executive was so divided that it offered little guidance to voters in the referendum campaign.  The unionist camp was divided, although the (much larger) Democratic Unionist Party adopted a position of Leave.  The nationalist camp has responded to the result by advocating a united Ireland referendum.  However, even the DUP MP Ian Paisley reportedly advocated that citizens of Northern Ireland should apply for Irish passports. Irish aftershocks could reverberate for some time.

Last but by no means least the question of a second independence referendum in Scotland is back on the agenda: the second of three predictions made by Colin Hay in his prescient blog for SPERI comment in January. First Minister Nicola Sturgeon has outlined her initial plans to defend Scotland’s interests.  ‘Indyref2’ is very much on the table.  The government wants to open negotiations with European partners; something that will challenge diplomatic protocol.  The SNP government has some strong cards to play, not least clear leadership in Edinburgh in contrast to the vacuum in Downing Street.  Nicola Sturgeon is smoothing the way to welcome converts to the cause of independence from those favouring the two unions—the UK and the EU—in the 2014 referendum.

Of course, the economic plan for independence in 2014 rested on an oil price level that has subsequently collapsed. However, by pressing the case for Scotland to remain in the EU when the rest of the UK leaves, the Scottish government could open up new options.  If it could gain converts from among economic interests north of the border, interest might then be attracted from companies south of the border to consider relocating to Scotland as part of momentum to ‘indyref2’.  Might some of the financial services sector in London be attracted by a Scotland that remains in the EU rather than relocating to the continent?  This is speculative, of course, and a lot will depend on whether Scotland can succeed in overtures to EU partners.

The aftermath of the EU referendum has unleashed the greatest political turmoil in my lifetime. The Leave campaign sought inter alia to restore parliamentary sovereignty to Westminster.  According to Boris Johnson parliamentary democracy is the most precious thing we have given the continent. Yet some three-quarters of MPs, our elected representatives in parliament, favoured Remain.  Further, the voters were protesting about a multitude of things beyond the EU: their lack of voice in governance, the consequences of globalization and the financial crisis and dislike of bankers.

David Cameron’s unleashing of popular sovereignty has proved to be a bigger political earthquake than many can have imagined. While the political atmosphere continues to be febrile, the aftershocks for the economy will rumble on into the future.