Bless the Brits! Even at the height of their lunacy they retain the wit to laugh at themselves. Two newspaper headlines the morning after the vote to leave the European Union were a hoot: ‘What have you done, Grandma?’ and ‘What the devil do we do now?’
Unfortunately, behind the humour is an inescapable truth. Britain has got itself into a frightful mess. Brexiteers sought to control immigration from Europe whilst retaining access to its single market. They’re about to discover they’ve got the first at the cost of losing the second.
Now here’s why this is a dreadful outcome, one that Britain cannot end up with. For if Britain ceases to be part of the single market it will suffer three serious economic consequences. First, its terms of trade could turn adverse and given that exports to Europe matter much more to Britain than exports to Britain matter to the EU this could inflict not inconsiderable costs.
Second, investment into Britain could be badly affected. Countries like China, India and Japan view Britain as the gateway to Europe. If that’s no longer the case their investments could reduce, cease or, even, start pulling out.
Most importantly, the City of London may suffer damaging consequences. If banks based in Britain lose permission to operate in Europe, as the governor of the Bank of France has threatened, many will retrench staff and set up new operations on the continent. When the City shrinks so too will Britain’s foreign exchange earnings whilst unemployment will, inevitably, grow.
So, not surprisingly, Brexiteers are desperate to remain part of the single market. The problem is that to do so they’ll have to accept free movement of people, i.e. immigration. The Norwegian model, which some believe is a solution, commits Oslo to accept immigration and all EU regulations whilst also contributing financially to the EU.
Now, if Britain were to accept this why did it opt out in the first place? Worse, it would have to accept EU regulations without any say in their making. Surely that would be worse than the situation they faced inside the EU?
Unfortunately, the economic consequences are not the only ones Britain has to confront. The political costs could be worse. The threat of a second Scottish independence referendum is real and the new prime minister’s power to refuse could provoke rather than resolve the problem. Britain’s only hope is that Europe will think hard about admitting Scotland for fear that could encourage the Catalans. But that’s thin foundation on which to build future hopes. And where Scotland goes Northern Ireland could easily follow!
Alas, Britain is more than just regionally divided. It’s also internally fractured. The Brexit vote divided urban and rural, rich and poor, young and old, the educated and not so well-educated. And, remember, all the King’s horses and all the King’s men couldn’t put Humpty-Dumpty together again!
In these circumstances are you surprised Britain is delaying triggering Article 50 to start the formal process of separation from Europe? The internet petition for a second referendum is unlikely to succeed but don’t be surprised if this issue is raised in an autumn election. The Liberals are committed to it. Labour could be too. And now there are Tory voices in support.
The question is: Can Britain pull itself back from the brink? Or will it slowly but unstoppably topple over? Undoing what you’ve wilfully done is not easy but what other choice do the Brits have?
The views expressed are personal