All Change Please

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Following the success of the “leave” vote David Cameron’s position was always going to be untenable. He took a huge gamble in calling the referendum and lost. So has George Osborne and he will be forced to resign too. Boris Johnson will have deeply upset his friends in the City of London for jeopardising the status of the City as the pre-eminent financial centre of Europe and will pay for that in the end.

Jeremy Corbin dithered on the sidelines and remains the most unelectable Labour leader since Michael Foot. Although Corbin’s party ostensibly stood for “Remain” it was clear that Corbin himself was pro-exit and that view transmitted itself to large numbers of Labour supporters in the northern working class heartlands who felt they were safe in exercising their anti-Europe anti-immigration traditional view. Had Corbin and Labour campaigned convincingly to remain the result could well have been different. Corbin was elected in large part due to the support garnered from young Labour voters who joined the Party in big numbers following the Labour defeat in 2015 and specifically to vote for him as leader. Corbin has let those young voters down and he needs to at the very least call a leadership contest to ensure that he still has the support of his Party and those young voters who elected him. I suspect he does not.

What this referendum shows is the deep divisions within the UK. Between the younger generation and the over 50’s, between the haves and have nots and the Scots against the English.

Nobody voted for regime change but that is what has happened. The referendum was  supposed to be about Europe. What we have is a change of government. From the more liberal Cameron and his supporters to the more extreme and right wing elements of the Conservative party, UKIP and other right wing elements.

Once the Tories have chosen their leader then a General Election needs to be called so that the electorate can express their views on the change of direction the new UK Government will have. Boris Johnson, Gove et al do not have the “mandate” to bring in right wing policies neither have they been elected to lead by the UK electorate. But regime change is probably what is needed.

The UK needs a new kind of politics. Political matters are grey not black and white. Britain’s confrontational system means that single issues dominate the agenda such as immigration or the economy and that means that the subtleties of the world are ignored. Politicians focus on those big sound bite issues in order to win a vote even though they know that by focusing solely on those single issues problems will arise in other areas which will need to be dealt with but will attract electoral opprobrium when political leaders are forced to confront them. “Leave” has given a major headache to any new Prime Ministerial incumbent. There needs to be a greater honesty from politicians as to the consequences of the decisions they and us make. There is a price to pay for “taking control” and to limiting immigration. There is no way that the UK will get access to the European Single Market on terms better than it had despite many saying Europe needs the UK more than we need Europe and the EU will have to make a deal on our terms. Europe will not and Europe cannot as the whole edifice of Europe will collapse. The best the UK can hope for are the terms that all the other countries accept which includes budget contribution and acceptance of free movement of people. We may even have to accept Schengen as a condition of entry. The latter can’t be accepted given the vote and so the UK is effectively locked out of the Single Market. Any trade deals will have to be worked out on a country by country basis and given the problems Europe has already it will be difficult to negotiate these with any degree of speed.

Given the position the UK is in what is required is a government that will invest in the economy and provide an environment where new business can flourish. It will need to provide more support for training and encourage exports in order to use the temporary benefit created by the plunge in the value of sterling. Funding for scientific research will need to be provided. Banks will need to lend more to business and repay the “debt” due to the country following the rescue of banking in 2008. The government will probably need to cut corporate taxes further in order to attract inward investment and retain the overseas companies that are here already. There will be a huge pressure on overseas manufacturers to relocate to other EU countries. What benefit can Honda, Nissan, and Toyota have to remain UK based when they can move production to Spain or Hungary? Government borrowing will inevitably need to increase and increase substantially. This means world capital markets need to be convinced that the UK has the ability to create an economy that is radically different than that which we have seen over the last 100 years. There can be no return to confrontation between workers and business even if that means workers giving up some of their rights which were granted as a result of EU legislation. Unfortunately the UK will need to do this at the same time as the rest of the world.

I am not convinced that the system and people that are in place at present can deliver such an outcome but unless as a nation we can find a solution then the next 10 years could be very difficult.