Thatcher and Brexit: voters sometimes get it wrong

Here’s an article not to miss: Larry Elliott in The Guardian on a study into the hollowing-out of manufacturing in Britain. From a peak of 8.9m jobs, industrial employment has fallen to 2.9m jobs over fifty years. That trend and, in particular, its harshest period in the 1980s, has cost the nation dear. Indeed, the authors maintain they can quantify the cost as between £20bn and £30bn a year.

A lot of the cost is in benefits being paid in communities where there is no longer a hope of a job, together with the corresponding loss in income tax revenue.

Back in March 2009, I wrote about the town of Conisbrough in South Yorkshire, where I had lived and taught for seven months in 1971. It was a mining village and, when I was there, it had a population of 16,000. By the time I came to write about it, the mine had closed and the population had fallen to 10,000. Within that population, close to 30% were either unemployed or classified as disabled or ill, often a way of veiling unemployment. A thriving community had been broken.

Cadeby Main, Conisbrough. Drew its last coal in 1987

So Larry Elliott’s article struck a chord for me. What I hadn’t realised was the extent of the harm the destruction of Britain’s industrial base had caused. That figure of £20-30bn represents about half of the government’s deficit. We have been through six years of devastating austerity policies that have generated mover poverty, ostensibly to reduce the deficit, and yet we could have avoided half of it just by not wrecking our industrial bedrock back in the 1980s.

Who was in government at that time? When the worst damage was done? When mining was effectively ended? Why, the sainted Margaret Thatcher. The woman still revered today, and certainly supported by a sufficient numbers then to give her healthy majorities in parliament at election after election. That fixation among voters has left a legacy of deep economic damage and, as a result, far more acute suffering now as we struggle to recover from the crash of 2007–8.

It seems that the electorate doesn’t always get things right.

That’s why I smile wryly when people tell me that we who oppose Brexit have to go with the will of the people expressed in the referendum of 23 June. My view is that Brexit too is going to have devastating economic consequences.

Many are saying that the catastrophe forecast by the Remain campaign in the runup to the vote hasn’t materialised. But those forecasts were always nonsense. They were propaganda weapons used by ministers, in particular David Cameron and his Chancellor of the Exchequer George Osborne, who lacked the energy or the intellectual horsepower to make a cogent case for remaining in the EU. Instead, they resorted to fear tactics, and failed.

Economic damage doesn’t manifest itself in a few weeks or months. It can take years. Inflation hasn’t taken off yet but we can already see the upward pressure caused by a falling pound. Unemployment has barely moved but we can see a big increase in businesses delaying investment decisions. We don’t yet have to contend with the loss of trade that our actual departure from the EU will entail (let’s remember that we are still members for now) but we’re already seeing Narendra Modi, Indian PM, pressurising Theresa May to relax visa restrictions in return for new deals – Brexiter claims that Britain will be negotiating from a position of strength are due to be sorely disappointed.

Incidentally, there is a delicious irony in May offering concessions on visa regulations for India – a move I favour, incidentally – since many Brexiters claim that leaving the EU would allow the UK to strengthen border controls.

But the biggest point of all is that the damage to the economy will be similar to what we experienced when Thatcher wrecked our manufacturing base. It wasn’t immediately obvious how deep the harm would be, though many warned about it. Now, thirty years on, we’re living with the consequences and the study Larry Elliott talks about quantifies them for us.

In thirty years’ time Britain will be living with the consequences of Brexit on top of the legacy of Thatcher. The pain will be all the greater.

And you’re telling me I’m being anti-democratic to oppose going down that route because 52% of the population against 48% think we ought to?

Voters have a democratic right to make a mistake and I raise no objection to that. However, the Thatcher experience shows us that they sometimes get it disastrously wrong. Then we all have to pay the price, even if we were in the minority. In the Thatcher case, and I expect the Brexit case, even if weren’t born at the time. 

So why shouldn’t those of us who don’t agree keep saying No?

Greece and the EU: who's been betrayed by whom?

It seems that Jean-Claude Juncker, President of the European Commission, feels betrayed by the behaviour of the Greek government.

The purpose of a union is to create something that is greater than the sum of its parts. By pulling together, the nations of the European Union agree to work together, giving up some of their individual freedom of action, because they believe that in joint effort they can achieve more.

Within the Eurozone, the bonds are even closer, since the countries have given up control over their own currency, a major sacrifice when it comes to combatting financial difficulties.

Part of the bargain is that if any constituent of the Union gets into trouble, the Union as a whole rallies round to help. Now, following the financial crash of 2008, five EU nations, all within the Eurozone, were particularly harshly affected. These were the so-called PIIGS: Portugal, Italy, Ireland, Greece and Spain.

Several years on, all but Greece seem to have weathered the worst of the pressure. That’s not to say that they’re doing well. No one in the Eurozone is doing well. It’s stagnating as a whole,but that’s a not unexpected result of the austerity economics it has imposed on itself. Austerity cuts people’s spending power, so demand goes out of the economy and, as day follows night, the economy fails to grow.

Greece however is in a far worse state than the others. The EU, the International Monetary Fund and the European Central Bank, clubbed together to provide it with funding and to buy it some debt relief, but only at the cost of an even harsher austerity programme than the other nations underwent. As a result, unemployment rose to one in four of the workforce and, far from growing, the economy has shrunk by a quarter. A catastrophe.

Instead of banding together to help its weakest member out of the mud, the EU has inflicted on Greece policies that could only drive it far deeper still. While its membership of the Euro denies Greece the classic solution of devaluing its currency, as Larry Eliiott explains in The Guardian.

Guardian photograph from Athens:
graffiti expressing increasing anti-Euro feelings

So the EU has achieved precisely the opposite of what is intended in a Union.

The result is that it now looks increasingly as though Greece will, as long feared, have to leave the Euro, and perhaps the EU too, if only to have any chance of working its way out of the mess it’s in, with even a shred of dignity left to it.

Make no mistake about it. It would be extremely painful for Greece if it came to that. But it would be a disaster for the EU and the Eurozone. Greece is the first test of the capability of the Union to stand by a member that is in real trouble. They’re on the brink of failing that test. That inevitably raises the question “what is the EU for? If it can’t even rescue a relatively small member from penury…”

Angela Merkel enjoys a high and deserved reputation for her statesmanship. But it is she, and Germany more generally, that has led the campaign to inflict the harsh regime on Greece which it is now rejecting. If she can’t magic some solution out of the chasm in front of her at the moment, her legacy may be that of the leader of Europe who saw the experiment of union founder.

Larry Elliott’s article calls what we are facing now a “Sarajevo moment”. The assassination of the Austrian Archduke in Sarajevo in 1914 initially seemed to be a relatively minor event in a distant place. But within weeks it had engulfed the whole of Europe in the torment of the First World War.

The exit of Greece from the Union might be another minor event, but it will be a critical step in causing the EU project to start to unravel. The Eurozone will have shown that it is incapable of solving a problem within its membership. And the EU will have shown that it can’t look after its constituent nations.

Those of us in Britain who want the country to remain a member of the EU will find our arguments for staying in weakened in the run up to our promised referendum. And Eurosceptic movements in other European nations will also gain momentum. The impact on the Union could be lethal.

Someone has certainly betrayed the ideals of the European Union here. But, Mr Juncker, I’m not sure it’s Greece.