European Union

Easing that sinking feeling

UK has lessons to learn if it is to weather the storm, writes Stella Creasy

Scientists describe the feeling you get on rollercoasters as ‘air time’. The body is composed of many loosely connected parts which normally have gravity to hold them together. When the rollercoaster begins to plunge, ‘air time’ refers to the moment when this common bond is removed and each body part is essentially weightless. Lay people would call this phenomenon a ‘sinking feeling’.

It is probably the best way to describe the UK following the vote for Brexit. Even among those who supported the Leave campaign, the sensation of plummeting dread as to what will happen next is pervasive.

This is rooted in three factors. First, the referendum has exposed damaging social divisions in Britain along geographical, generation and income lines.

Secondly, the lack of detail as to what Brexit entails and the absence of preparation for a Leave victory means widespread uncertainty as to what will happen next. Competing claims from the Leave campaigners about what should happen now – whether to those non-UK European  Union citizens in Britain or to public services – only compound this confusion. Finally, the chaos following the vote within mainstream political parties has perpetuated the sense that politics is broken and so no one is capable of taking charge of the situation. David Cameron resigned, calls were made for Jeremy Corbyn to follow suit and people within both parties turned on each other. Any one of these factors would have been challenging; the combination of all three led many around the world to look at Britain aghast.

Thankfully initial calls for Article 50 –the formal exit timetable – to be triggered straightaway have been rightly dismissed. Cooler heads acknowledge the merit in beginning negotiations with European counterparts well before firing the starting gun to leave.

‘As many businesses warn staff that their jobs may move to European Union nations, the challenge is to retain industries and also to offer a distinctive benefit to remaining in Britain at all’

Yet the honest truth is that despite the superficially attractive slogan used by the Leave campaigners of ‘Take Back Control’, what happens next is largely outside the hands of the British people.

This could have been predicted – after all, the EU exit provisions are designed to make it unattractive to leave.

They provide for the remaining EU member states to negotiate between themselves the terms that will be offered to any exiting state. These are then offered, and only after that is there any room for talks.

Any changes require agreement by the member states and the European Parliament itself. There can be little doubt getting enough ‘yes’ votes will be as easy as herding cats. For all the bluster coming from newly appointed government ministers, the terms of Brexit are unlikely to be set in Westminster but rather in 27 other capitals around Europe.

While the installation of a new prime minister at relatively short notice may calm some nerves, that ‘sinking feeling’ is only likely to deepen as the details of Brexit begin to emerge.

In part this instability is an outcome of the disconnection between the British public and its political institutions. Brexit offered voters with little sense of anything to lose an opportunity to air a grievance free of any identifiable consequences.

It is a sign of the poor condition of British politics that there was scant surprise that pledges of what could be funded by leaving the EU were quickly dropped after the referendum – whether money for health services, funding for tax cuts or for cheaper energy. Leave also promised that the UK could retain full access to the single market but crack down on immigration, despite free movement of people being one of the founding principles of the single market.

However frustrating for remain campaigners, in this aftermath it is the responsibility of all to try to make sense of what is not just possible, but also desirable.

Whether free movement – on which so many British jobs depend – or the rights in the workplace only open to British citizens because of the EU, the policy debates on what Brexit means have only just begun. So too have the questions about knock on effects – from the future of Scotland within the UK to London’s status as an international capital. Little of this offers relief to the millions of citizens, businesses and employees now facing months, if not years, of uncertainty.

Many are trying to talk down the height of the rollercoaster to come - from the Governor of the Bank of England to Theresa May pledging no early exit. Yet no one is pretending Britain faces an easy ride. In their own post-Brexit briefing the Bank of England admitted that while a majority of firms did not expect a near-term effect on their investment or staff hiring plans, around a third thought there would be some negative impact on those plans over the next 12 months.

News that the UK unemployment rate had fallen below 5 per cent in May, its lowest rate since 2005, was met with warnings that this positive trend ‘won’t last’. Financial Times commentator Martin Wolf, labelled Brexit probably the ‘single worst event in British post-war history’.

Globalization, for all its long-term,national benefits, creates gaps that can swallow communities and individuals. Britain’s vote for Brexit was in part driven by this being ignored for too long.

That means our response must address those who need help minding the gaps. Britain will need to not only reinvent its relationship with the rest of Europe, but its very modus operandi.

As many businesses warn staff that their jobs may move to EU nations, the challenge is not only to retain industries, but also offer a distinctive benefit to remaining in Britain at all. Our underlying productivity gap must now be the priority. With an end to preferential access to European markets on the cards, our future depends on making British workers the most skilled, confident and adaptable employees in the world and British cities the best place to do business.

In particular, given how much the UK relies on trade in services within Europe, finding ways to support those in these sectors as well as diversify our economy with a revised industrial strategy is critical. This is about promoting activity both at home and abroad – technology to help grow trade opportunities in markets further afield, infrastructure investment to help make doing business within Britain more attractive.

Its not just our economy that will need a radical rethink – our already unequal society faces some hard knocks too. These will come not just in slowing employment or financial difficulties as consumers face higher prices and job insecurity. Pensions experts estimate  that it could take a decade for companies to fix the damage Brexit has done to occupational final salary schemes in the private sector, let alone the extra cost to the taxpayer of the public sector.

Without preventative action, debt and insecurity is likely to spread further in our communities – and those already vulnerable on low incomes will face deepening inequality and misery as a result.

All of these challenges would be tough to get right as it is; without partnerships with neighbouring nations they become doubly difficult. Whether trying to tackle poverty, reform our economy and public services or taking on challenges such as terrorism or climate change, history has shown the folly of going it alone.

To avoid repeating these mistakes, Britain will have to show a willingness to adapt new ways of working that it has so far been resistant to try. Will Britain recover and adjust? Only time will tell. Will Britaindemand to ride the rollercoaster of referendums again? Unlikely.