Brexit: Is it Worth the Price?

London could stage 14 Olympic Games for the cost of Brexit to the public finances

Brexit is going to cost the British people at least 58 billion pounds, says Chancellor of the Exchequer Philip Hammond. Taking figures provided by the Office for Budget Responsibility, Hammond also announced that government borrowing will have to rise as a result of Brexit, by 64 billion pounds.

The final figure, when all is done and dusted, is likely to be very different, however. Given that experts tend to err on the side of caution with their projections, the real cost will probably be higher than the 122 billion pounds calculated thus far.

It’s difficult to comprehend, or imagine, the meaning of huge numbers such as these. Looking at those figures, is Brexit going to be an expense too far, or is it cheap as chips and worth the gamble? 58.7 billion sounds like a lot of money, but, given what Britain spends on infrastructure or public services, or on the EU, is it really?

During the Brexit referendum campaign we heard from the Leave side what they thought the EU cost Britain and how much we as a country might benefit from leaving. They said Britain could benefit to the tune of 350 million pounds a week, and suggested we should spend that money on the NHS – a worthy goal indeed. However, they abandoned that idea shortly after the referendum result was known.

To their discredit, the Remain side didn’t come up with a convincing counter to Leave’s very persuasive meme. All Remain did was argue over how much EU membership really costs. But, looking only at the figures themselves, who can really understand the difference between 16 or 10 billion, for example? So the Remain argument got lost in picky arguments over the details, and they appeared pedantic, negative, and boring. Leave were able to capture the high ground by making the more positive general point.

So, just as Leave were able to make the money we spend on EU membership 'real',and to introduce a bit of balance, I'm going to visualise what Brexit is going to cost the British people with this handy little guide. The figures below are calculated simply by dividing 122 billion by the actual cost of various public ‘goods’, and rounding up or down as appropriate to the nearest sensible number. It’s a fun method of understanding the cost of Brexit more clearly, and a slightly serious contribution to rebalancing the continuing argument over whether, or how, the UK should remain a partner in the European Union.

What could Britain get for the cost of Brexit to the public finances?

So, do you still think Brexit is worth the price?

Trump and Brexit: Or Be Careful What You Wish For - You Might Just Get It!

It is tempting to excuse away the result of yesterday's presidential election and say that racism, misogyny, lies and ignorance won in the United States on 8 November 2016. Granted, some voters may have been emboldened to vote for Trump for those reasons, but I don’t think that’s what happened. Most Americans don't vote out of sheer prejudice; they're far too sensible for that. So why did people vote for Donald Trump?

From the perspective of being a privileged middle-aged white British male in the top quartile of income earners in the UK, it might seem surprising that many women and people from ethnic and other minorities voted for Trump. But I think to stop at surprise, or dismiss it as prejudice, would be to miss the central message that this election delivers, and which found voice earlier this year in the UK too, with the vote to leave the European Union. Indeed, thinking more deeply through these issues may be the key to solving the puzzle of why so many people who should not have voted for Trump or Brexit, against their own rational judgements, did in fact end up doing so. And, in so doing, we might begin to develop a coherent understanding on which to build a new political order fit for the demands of the 21st century.

So what happened yesterday?

Yesterday the American people, like the British who voted for Brexit in June, delivered an enormous kick to the nether regions of their respective countries' established elites, and the conclusion is rather simple – and potentially optimistic – I believe.

Few except Trump and Farage saw it coming, in fact. The media was consistently wrong in its predictions and expectations, clearly biased in favour of the Clinton and Remain campaigns. Pollsters yet again failed to account for so-called ‘shy’ voters. And rationality failed once more to persuade those guided by their feelings and instincts.

In the run-up to the election on 8 November, Hillary Clinton didn’t promise anything substantive to change current living conditions for ordinary Americans. All she promised was more of the same; and what precisely did that mean? Well, to large numbers of ordinary Americans it meant falling living standards and a further widening of wealth inequalities in favour of a tiny fraction of the population. I doubt many Americans were very encouraged by that message, even if their lives have started to improve in recent months.

Yet, in 2008 Barack Obama had offered change. That was why millions of Americans voted for him. He overcame entrenched prejudice because he offered hope and change. But in the intervening period he didn’t change America enough. He had eight years to do so, but throughout six of those he was frustrated by an exceptionally obstructive Republican Congress. Wealth and income inequalities widened and, despite his achievements in health care and preventing a much worse recession occurring as a result of the economic crash, Obama leaves the Presidency without having done the one thing that he promised most of all to do, which was to restore hope for a better future in ordinary people’s lives.

Tens of millions of voters in the USA (the UK too) are disappointed, angry, bitter, and crying out for positive changes in their lives. They feel like they've been left behind by globalisation and, indeed, when one compares their life chances and experiences with those of the one percenters, they certainly have been. And they are still, more than eight years later, desperate to rediscover some hope that their and their families’ lives would improve if they work hard and play by the rules. Clinton didn’t offer them any hope beyond what they already have – which is hardly any at all.

Just as in the UK, in the USA the liberal media was complicit with the political and economic establishment in ignoring the voices of its readers and listeners and preferring the status quo. This is no surprise, given that media owners and executives have themselves benefitted handsomely from global deregulation of ownership. Why would they want to change that? Many have become billionaires because of it. Perversely, though, both Brexit and Trump have shown the media that there are limits to their ability to influence and cajole the electorate in their favour, and that in itself may be to the long term good.

Hence, for the majority of American voters, what a Clinton presidency promised was four more years of a status quo dedicated to more globalisation and deregulation, the maintenance of a corrupt and fractured political system, and the American working and middle classes falling further behind - with the American Dream becoming not just an unattainable mirage, but a sick joke being played on ordinary Americans by the billionaire class.

It's fair to ask, therefore, what have globalisation and deregulation delivered for most ordinary working and middle classed Americans? Well, longer working hours, ever greater work intensity, reduced stability and security, and falling real wages and living standards; while a tiny fraction of the population is given reign to indulge itself in a wealth grab of epic proportions. The result has been a widening of economic inequality and political division such that a series of unbridgeable chasms now separate Americans from one another: men and women; black, Hispanic and white; young and old; college and non-college educated; rural and urban; Christian, Jewish, Muslim, and atheist; and most glaring of all, the fabulously rich and everyone else. It is consequently no exaggeration to suggest that America is now in a pre-revolutionary state.

Like Britain, for example, the American economic and political capitals are inaccessible to most of the rest of the country except as tourists. Few people can afford to live in the centre of London or New York; ordinary people have no effective access to political decision-making any more. The majority of ordinary people feel cut off from the opportunities and means of achieving them that they were once led to expect a democratic and fair society would provide. Is it any wonder that they seek to restore those opportunities by trying to get rid of the people that stand in the way? Clinton didn't stand a chance; though most of us had no more than the vaguest inkling of what was coming. This morning, perhaps thankfully, the situation is a lot clearer.

What did Trump offer instead?

Well, not much of substance. But what he does promise in spades is change, and in the current circumstances that Americans appear to find themselves in, that promise was enough to win the Presidency. After all, it is what Barack Obama offered but could only partially deliver on.

What I think most of Trump’s voters did yesterday was to hold their noses against the stench of his racist and misogynistic remarks, against his bullying and lies, and vote for him anyway; despite those aspects of his character and behaviour – and because for them the alternative was even worse. That’s why so many women and Hispanics voted for him. They didn’t vote for him because he hates women and is racist. They voted for Trump because, despite his bigotry and ignorance, he promises change and Clinton did not – and voters are desperate for change. Horrible though he is, he is the last ditch alternative to a candidate that represents a system of political-economy that is broken and bankrupt. That is what happened yesterday.

Why the optimism?

I am a green socialist. I don’t believe that Donald Trump will make a good President or that he will fulfil even a small fraction of the torrent of vacuous promises he made on the campaign trail. If he manages to drain the political swamp in Washington DC then he will have at least done something. But I think (is it hope?) he will end up being a one term President. He will not improve the economy and is unlikely to reduce inequality substantively. Moreover, what he does promise to do is revive the rust belt states’ fossil fuel and heavy industries in the name of jobs and community. If he does that, then say goodbye to climate change mitigation for the next four years, folks.

Nevertheless, Trump’s election has been a political earthquake for America and the wider world, and for the progressive Left. Ever since Bill Clinton and Tony Blair ascended to command the politics of the western world, the Left has stopped listening to the people that it wishes most of all to represent: the working classes, the vulnerable, and the downtrodden. The Left forgot its Base. In so doing it created a vacuum to be filled by Trump, Farage and Le Pen.

The Left has now an opportunity to rethink and become properly representative and inclusive of the wishes and needs of both ordinary working people and the middle classes who, after decades of declining or stagnant living standards now share a common purpose. That is where the political majority now lies.

And as for ‘big’ ideas to undergird rational policy decisions that produce fair and just outcomes, we now know that globalisation and deregulation do not mean the same thing. It is not only possible to regulate against unfair, discriminatory, and exploitative practices and still be an open and tolerant society – it’s a fundamental requirement.

Donald Trump is not the man to do these things for Americans, and neither is Farage in the UK. Trump is, after all a member of the billionaire class himself, even as he thumbs his nose at his own kind; and Farage was educated at public (private) school and is a former commodities trader in the City. Both are one issue protest candidates whose economic compasses point in the wrong direction for working people over the longer term. Lower taxes will not suddenly make trickle-down economics work, when it hasn’t for the last 40 years. Less business regulation will not suddenly make employers pay their workers higher wages or give them more stable lives, or encourage industry to invest in green and clean technologies. Selective health and education will not suddenly deliver equality of opportunity for all. Governments need to intervene, regulate, and organise to direct public and business decisions in directions that support equality, fairness, stability, opportunity, and prosperity for the majority. To step back from this task has been vividly shown to produce perverse and harmful outcomes on a massive scale. Trump and Brexit are the prima facie evidence for that.

Be careful what you wish for – you might just get it!

And that is the contradiction at the heart of these extraordinary few months that have seen the UK vote to reject membership of the EU, and now the USA to vote for the worst presidential candidate in living memory. In seeking to avoid the status quo Americans really had only one alternative, as did the British when asked whether they wanted to remain in the EU. On both occasions the two sets of voters chose change, because the status quo was too awful to contemplate. However, neither Donald Trump nor Nigel Farage are able or willing to produce the kind of change that voters are so desperate for. Which begs the final question.

If American and British people voted for Trump and Brexit because they want an improvement in their lives, then I think they may be disappointed in the short term. For the long term there are glimmers that the political classes now understand that they face angry and desperate voters, and that deregulation and globalisation, at least in their present guises, are dead concepts. Vast chasms of inequality and division can no longer be tolerated. If the political system as a whole has woken sufficiently to that realisation this morning, and goes on to put in place a social contract and economic structure that delivers progressive and sustainable opportunity for all, then Brexit and the election of Trump may have been worth it.

Why Did I Vote for Britain to Remain in the EU? - Immigration

This morning at 8.45 I voted for Britain to remain in the EU. I've considered many issues and had lots of discussions. I've been involved in plenty of arguments, and even laughed at some jokes and absurdities generated by this once in a generation event. But the main reason that I voted 'Remain' was to do with immigration. Here's why.

In 2001 I returned to the UK to settle down, having spent nine of the previous fourteen years in Japan, culminating in completing the writing up of my PhD at Doshisha University and beginning my first post-PhD academic job teaching at Niigata University. I love living in Japan, but Britain is my home, so I wanted to build my career here, for personal as well as professional reasons. But something extraordinary happened to make things quite complicated; in a nice way.

I fell in love with a wonderful woman from Germany. Indeed, I was fortunate enough that she decided to come to Britain to make a life with me and we got married. We went backwards and forwards to Japan and we had a baby girl who is now my 7 year old cheeky daughter. We're divorced now, but I feel very privileged because I now have the most amazing daughter whom I am so proud of.

Let's take ourselves back and imagine what might have happened if the UK in 2001 had not been a member of the EU, and visa restrictions applying to non-UK non-EU nationals had been similar at that time to the restrictions in place today. It is very likely that my daughter would never have been born, because under those conditions her mother would not have been allowed to settle in the UK. And I am doubly lucky because now I am able to see my daughter whenever I like because her mother lives just ten minutes walk away from me in Sheffield, and remains in the UK partly because of EU regulations on the free movement and settlement of EU nationals within EU space.

I know of many people that have found happiness in their relationships and had children as a result of the free movement of people across borders within the EU. There is a substantial community of international marriages between EU nationals in Sheffield, and I am sure this is matched by other cities in the UK. For me this is the most important issue helping me to decide to vote for Britain to remain at the heart of the EU. You have to understand that I grew up in a society where, just 30 years or so after the end of World War Two, it was routine for people to openly express hatred of German people without embarrassment. Many British people at that time had lived through the war themselves, including my own father and mother, and memories of that tumultuous conflict were still raw. The EU has contributed enormously to changing that atmosphere for the better.

A dense network of personal relationships, and the children that come from them, is the best foundation for creating lasting peace and friendship between nations. More than anything else it is this that prevents countries from harming each other. This was and is the underlying principle of the Treaty of Rome in 1957 and the subsequent development of the EU. It is much more important than trade. In facilitating the free movement of people for this purpose the EU has succeeded spectacularly well. I am proud to say that I have been able to benefit personally, in a very substantial way. I don't exaggerate when I say that, had Britain not been in the EU in 2001, and had present day restrictions on spousal movement been in place at that time, then I would probably not be a father today.

I have many friends who are currently enduring stress and difficulty due to Britain's draconian spousal visa restrictions. I sympathise very greatly and, personally speaking, I think those restrictions are shameful. They are a black mark against Britain's international reputation as a tolerant, civilised and liberal country. However, those restrictions are Made in London, not Brussels; the EU does not require Britain to put those measures in place. No other EU country that I know of has equivalent visa regulations. If Britain leaves the EU when voting in the referendum concludes at 10pm tonight, the restrictions placed on the movement of partners and spouses of British citizens will in all likelihood be made more draconian, not less, as a post-Brexit government puts yet more energy into reducing numbers of migrants.

That is why this morning I voted for Britain to remain in the European Union.

Let's Discuss Austerity and Inequality, not Immigration: Or Why Does the Conservative Remain Campaign not Tell the British People What We Need to Know?

The topic dominating the 23 June EU referendum in the UK has been immigration, and it is threatening to deliver a victory for the Brexit campaign. What saddens and frustrates me is how the Brexit campaign have misled the British public over this issue in particular, and how the Conservative Remain campaign has been so lacklustre such that Britain is drifting towards Brexit.

Brexit are campaigning mainly on the basis of regaining control of Britain's borders and significantly reducing migration, and they are winning support on this issue in particular. However, they don't present the public with a credible case, once we start to look at the data. As I outlined in an earlier blog post, even if a Brexit Britain was able to reduce EU migration by a quarter and non-EU migration did not increase to fill the gap in labour supply, a very BIG IF, population growth rates would only go from 0.7% annually at present to 0.6%. There would no impact on that feeling of Britain being too full of people and unable to cope.

The current feeling among predominantly working class people, who are big supporters of Brexit, of Britain being full is actually due to the impacts of a combination of six years of austerity and steadily widening economic inequality under a neo-liberal economic policy that favours elites. Both of these issues are Made in London, not Brussels. However, the Conservative Remainers are ignoring them and delivering a weak campaign for Remain. Why?

Even as Britain's population grows and the labour force expands, the government is taking active steps to reduce investment in public infrastructure and services in the service of austerity, causing increasing competition for public resources among ordinary people. The OECD recently called for a reversal of this policy, but thus far the government has refused to veer from its flagship policy. Of course, everyone except the very rich living in Britain right now knows that there is less to go around per person, but that is the result of a deliberate policy by the current government to shrink the state and starve the country of public resources. Britain's population has grown more rapidly in the past and we coped with it at that time, why not today?

Added to this is the feeling that the cost of private resources is increasingly out of reach as the rich and professional classes (double professional income households especially) become more wealthy and the gap between them and ordinary people widens. House prices, for example, rise with affordability, pricing out those on lower incomes. Again, this is the outcome of a deliberate and planned policy Made in London to reduce taxes on the rich to encourage mobile capital to come to London. It's worked. There are lots more Russian and Chinese billionaires in London today, but these are not the immigrants that the Brexit campaigners complain about. Their naively hoped for 'trickle down economics' has not occurred as homes and a decent life are increasingly out of reach for ordinary people. This is being driven in part by structural changes in the distribution of wealth and income inequality, particularly in the Southeast of England and in London.

A crucial point once more not being made by the Remain camp is the following. The public finances are in deficit, which means that on average everyone in the UK is taking out more than they put in. But, EU migrants as a group are contributing more than they take out. Which means that British people are even more in the red than the headline figures might indicate. For example, EU migrants don't incur childhood costs as they migrate here as adults etc., they tend to depend less on welfare benefits than British people, and they tend to pay more into the system in income taxes and other contributions. So, simple arithmetic shows that British resident nationals and non-EU migrants are costing the state more than they contribute, and it is EU migrants that are keeping public finances from falling further into the red. These are the people that the Brexit camp would like to prevent coming to the UK.

Ultimately, a much more effective and just method of reducing immigration would be instead to increase investment in British people's skills to fill labour shortages in the NHS etc. and reduce reliance on people born and trained in developing countries. EU migrants are in a small minority in the NHS etc., where most migrants are from former colonies such as India, Pakistan, S Africa etc. These countries have huge public health problems of their own, and could do with not losing their investments in public health training to the UK. In addition, most EU migrants work in the private sector and have a higher rate of entrepreneurial activity than British people, meaning that many are wealth generators, and future employers of British workers.

If a Brexit government were to successfully cut EU migration, we would see UK public finances go deeper into deficit, and see government investment drop and the economy shrink. Any gains from not paying EU dues will be wiped out and then some. It is disingenuous at best, therefore, to claim that Brexit will improve public finances and we will have all this extra money to pay for the gap that withdrawal from EU funding would create. We would all be worse off, it appears, and any UK government controlled by libertarian Brexiteers would be even less inclined to welcome new migrants.

So why doesn't the Conservative Remain camp tell us this?

It's easy, really. The EU Referendum in Britain was a bad idea right from the start, especially for Prime Minister David Cameron and Chancellor of the Exchequer George Osborne, as it turns out, who are leading the Conservative Party's Remain campaign. Cameron and Osborne can't campaign against Brexit using the argument that the main reasons for ordinary people feeling squeezed in their lives is not immigration, but austerity (lack of public investment), and widening inequality (unaffordable homes and summer holidays), since they would be admitting that the central plank of their own economic policy this past six years is the root cause of the deepest rift in British society and culture since at least the 1930s.

So, the big guns of the Remain camp have been spiked and we have a lacklustre campaign from their side, and a drift towards Brexit. Indeed, if Britain does Brexit, then it will be very much Cameron's and Osborne's responsibility because they made themselves hostage to their own economic and fiscal policy.

What we need instead is an honest debate about the impacts of austerity and inequality on British life and how to solve these. The party to lead this debate is, of course, Labour; but they've got their own problems. The result is that Britain doesn't have effective leadership on the Remain side in this referendum, and that may deliver a disastrous result for our country over the long term.

Should Britain Leave the EU to Regain Democratic Control of Our Lives?

Some people in Britain argue that the EU is undemocratic, or that it undermines democracy at the national level, and they use this as reason to want to leave the EU. Here's my take on this question.

The European Parliament has 733 members elected directly by the citizens of the member states. It legislates all EU laws. Importantly, the results of European elections, which take place every five years, are decided by proportional representation. The EU Commission is the executive branch of the EU. Commissioners are all appointed by the heads of governments of the member states. The President of the European Commission is elected by the European Parliament after negotiations between the elected heads of government of the member states. There are three other 'Presidents', who head up the European Parliament, the European Council and the Council of Europe, but the President of the Commission is the titular head and most powerful EU official. He answers to the heads of government of the EU member states. No EU representative has their job as a result of birthright.

The UK Parliament in Westminster is divided into two chambers. The House of Commons has 650 members elected directly by British citizens. Results are decided by a First Past the Post system, which means it is possible for the party with the most number of votes to win fewer seats than the eventual winning party. It also means that smaller parties may win large numbers of votes but gain few seats. The Prime Minister is the head of government and is appointed by the Queen, and is nearly always the leader of the party with the largest number of seats in the House of Commons. There is no direct election for the post of Prime Minister. The second chamber is the House of Lords. It shares the task of making and shaping laws as well as challenging the House of Commons. None of the members of the House of Lords are directly elected by the citizens of the UK. All are either hereditary peerages, or are appointees by the Queen on the recommendation of Prime Ministers past and present. The Queen, of course, is a hereditary monarch and is the Head of State of the UK. She was not elected by anyone.

An important issue is the role of unelected officials. The EU employs about 55,000 unelected officials to administer a population of 508 million people in 28 countries, and the UK government employs approximately 393,000 unelected officials - the Civil Service - to administer a population of 64 million in 1 country (or four countries if you take an alternative view). The EU's unelected officials are selected in a similar way that the UK Civil Service selects its employees; through open and fair competition administered by EPSO, the European Personnel Selection Office. These officials are answerable to the elected members of the European Parliament or the European Commissioners. Similarly, members of the Civil Service in the UK are answerable to Parliament and the government of the day.

So, what does all this mean? Well, my understanding is that the EU is not really less democratic than the UK, and there is validity in arguing that it might be more democratic. For example, the issue of heredity and birthright is not an issue in the EU. The EU administration is, nevertheless, more geographically distant from citizens than the government in Westminster, but I think that it fulfils a vital role in tacking difficulties that national governments would have trouble tackling as effectively. Pollution or climate change, for example, don't respect national borders and need effective international cooperation which the EU can provide.

Moreover, and this is the important issue for me, the great majority of British people consent to Civil Servants - unelected officials - making decisions about our lives every day of the week. I don't see much difference if EU officials are doing the same thing, about issues and problems that are important to us and are additional, or supplementary to what the British government and local authorities also provide on our behalf. In summary, therefore, I don't think remaining in the EU presents Britain and British people with a democratic deficit. If anything, I think it enhances our democracy and provides more in the way of political methods and opportunities for resolving our common concerns. But more on that another time.