PETER JONES: THIS MOTHER OF ALL CRISES WILL GO ON FOR YEARS

PETER JONES

Mess doesn’t even begin to describe the pickle that we find ourselves in now. We have demanded a major constitutional change with no manifesto or even vague consensus on what comes after that Brexit change.

We want things – continued free trade with EU countries, but no free access for EU citizens – that are completely incompatible.

We have put highly divisive political issues – Scottish independence, Irish unification – back on the agenda. We have set the young – who voted Remain – against the old – who voted Leave.

And we don’t have any political leaders who remotely look capable of sorting it out.

Crisis? You bet it’s a crisis, the mother of all crises. And it is going to go on for years.

There are plenty of theories about how it will all work out. Among the most plausible is that after two years of negotiations, in which the EU has played hardball in order to discourage Nexit, Czexit, Frexit, Swexit, etc., a deal emerges which looks pretty awful from this side of the Channel.

Then there will be a groundswell of opinion led by lots of this-ain’t-what-we-voted-for opinion and, if whatever party is in opposition is smart enough, a general election is engineered with the opposition promising to put the bad deal to EUref2, which overturns it and everything reverts back to where we were.

In other words, this will just be a two- or three-year nightmare and then we will all wake up, drained and sweaty.

Perhaps this is why George Osborne and Boris Johnson have been issuing pleas to keep calm and carry on as though nothing has happened.

George thinks that nothing will eventually change and Boris will be happy because the only real change he wanted – Dave ousted and himself installed – will have happened.

Well, no. Even if political events do take us down broadly that track, I suspect that EUref2 will just endorse Brexit. That’s because for the rest of us, of course, the next two or three years will not just be a nightmare, but a horrible reality.

Even just on a superficial trawl of the media and my own contacts, I can see a recession on the way. Business investment put on hold until the outcome is being cancelled. Inward investment is drying up.

Once there is a flurry of such news speaking of lost jobs and incomes, consumers, the main drivers of recent economic recovery, will pull in their horns. Bounce back is about to take on a different meaning.

The effect on popular thinking – the thinking that led to Brexit – will not be what people imagine it to be. People will not think that they got it wrong – how many people do you know who cheerfully admit to having been wrong?

No, it will be other people’s fault. The establishment, the politicians, the big banks, the International Whatsit, the World thingummy – they will be the ones who got it wrong.

And to an extent, they will be right to think that. Most folk quite rightly do not blame themselves for the financial crisis, or the Great Recession, or the need for austerity, and yet they are the ones who have paid for it through lost jobs, reduced incomes, higher taxes, poorer public services. The EU became a convenient whipping boy for all that anger.

So, if anyone wants to turn round the Brexit vote, they will need to turn round the economy, cause real incomes to rise, reduce inequality, restore quality public services, and make the multi-nationals and other tax-evaders pay their damn tax bills. And that, thanks to the bloody Brexit vote, just isn’t going to happen.

 

Peter Jones is a freelance business and economics journalist based near Edinburgh and writing principally for The Times and The Economist.

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