The dream has crumbled, replaced by the Nightmare on Threadneedle Street.
Britain’s decision to leave the European Union immediately placed the City under siege, and it could fall, with consequences disastrous for the economy. From his central keep, the Governor of the Bank of England is marshalling his forces to repel a market assault that is already underway. The pound is battered, crushed not only by the dollar, but by the euro – the euro! Europe’s bankers, sequestered in their high towers, are perusing real estate prices in Paris and Frankfurt. Car manufacturers, all of them foreign-owned, are already debating how to “balance” future investment between Britain and Europe. Scotland, no longer a reliable friend, is set to abandon England and seek fresh allies, to be followed in time by the Irish, reducing the United Kingdom to an area of land bounded by the River Tweed and the White Cliffs of Dover.
But are we downhearted? Nigel Farage isn’t. The Ukip leader is elated. His deeply flawed vision of Britain’s glorious future – the politics of fools’ gold– has been realised, elevating him from jester to kingmaker. Boris Johnson, the Falstaff of the Right, will be licking his chops, waiting for the nation’s call. Michael Gove, whom fear of mis-speaking prevents me from describing as England’s gauleiter, is already, in his head, organising a “triumph” from the Justice Ministry to either Downing Street, as Chancellor, or King Charles Street, as Foreign Secretary, ready to take charge of treating with Brussels.
David Cameron, who within an hour of the result, took the honourable course of announcing he would stand down in October, must feel crushed as he contemplates his revised place in the history books. Not since Anthony Eden sent the British Army into Egypt to reclaim the Suez Canal has a British Prime Minister made so calamitous a miscalculation. George Osborne, his faithful number two, is obviously finished. There was general agreement that the Chancellor, even more than his leader, could expect to meet the headsman. But everyone in high office on the Remain side is likely to be living on borrowed time, looking ahead to a future, at best, as whipped curs. At Labour HQ, the mood is scarcely more positive. Jeremy Corbyn, as party leader, proved himself an irrelevance during an inconsequential campaign. But he was not alone. His senior colleagues were, as Denis Thatcher might have put it, about as much use as a one-legged man at an arse-kicking party.
As far as the rest of us are concerned, as the excitement wanes, and the shock fades, a certain measure of seller’s remorse is bound to emerge. Can we really have given up our place at the top table of the world’s largest trading block? Must we expect to exchange our euro-passports for the old blue-black version and take our place in the “others” line in Europe’s arrivals halls? Do we honestly believe that the £350 million we allegedly pay each week to the EU will now be reallocated to the NHS and national defence and schools and Uncle John Cobley and all?
Most of all, do we truly believe that the immigration issue has been resolved and that 12 months or two years from now most East European immigrants will be gone and that the controls we conspicuously failed to apply to arrivals from non-EU countries will in future be imposed, even at the cost of our admission to the Single Market?
In answer, I refer readers to the views of Farage, Johnson and Gove, who have admitted that most East European migrants can be expected to stay on, including those who arrive legally during the two years of negotiations with Brussels about to get underway. Thus, by “Independence Day,” we can expect to carry on living alongside some three million Poles, Lithuanians, Slovaks, Romanians and others, whose presence was the principal cause of the Referendum.
Was it for this that we threw our European destiny aside?
No one should imagine that Britain can have its Euro-cake and eat it, too. Forget talk of the Swiss, Norwegian or Icelandic models. Britain is not only much larger than any of these fringe nations, it is also, on the Leave side, dead-set against any long-term acceptance of the free movement of labour. And if we don’t accept the right of other Europeans to come and live and work in the UK, then we face not only tariffs, but a future in which we are obliged to meet European standards without having any say on how the rules are made.
In time, of course, an accommodation will be reached. Low growth, higher interest rates and more expensive mortages (all on the immediate horizon) will not last for ever. Europe and the UK are not about to declare a trade war, still less mobilise their armed forces. Five years on, new regimes will be in place, meaning that our neighbours across the Channel regard us (and we them) not as friends and partners, but as competitors, with all that that implies. We will live with them and they will live with us.
Trade with the rest of the world is equally fraught. The Leave side insists that we can quickly cut deals with China, India, the U.S., Australia and the rest of the 186 countries that are not members of the European Union. No doubt this is true. But an enormous army of negotiators will be required, half to unstich our arrangments with the EU, the rest to work via the World Trade Organisation over the next decade to allow our exporters to sell their goods in a way that up to now, has apparently been impossible. In this context, I remind readers that the Germans currently sell five times as much to China as we do. If they could expand global sales within an EU framework, why couldn’t we? The question, like so many others, hangs in the fetid air.
What, though, of our soon-to-be former partners in the EU? Their concern today is not the future of Britain, but the continued existence of the Union. They know that unless they show a united front, Brexit could prove the beginning of the end for the European Project. So once they get over their shock and sense of hurt, what will they do? Germany, France and the European Commission have warned over and over again that Out means out and that the remaining members of the bloc will be negotiating in their own interests, not ours. We would be wise to take them at their word.
The French government will waste no time in setting out the welcome mat to bankers and others who wish to move from London to Paris. City advocates will point out that London has a unique set of skills and is at the very heart of European financial trading. They should reckon with the fact that the French already have a fifth column – the 100,000 of their citizens currently working in the Square Mile – who have assiduously been learning their trade and are perfectly poised to move back to their home country.
Germany, too, will do everything it takes to gain advantage. The Berlin bourse will move to enhance its position as Europe’s leading stock exchange, and the Bundesbank, allying itself to the Bank of France, will press the European Central Bank to codify the rules on euro-trading in a way that pushes London to the margins.
Again, London will recover. The genius of the City is not about to expire. But the idea that we can hope to be the Singapore of Europe is surely fanciful. it may just be the case that we shrink to our true size. Expect to see a number of big banks downsizing their London headquarters and shifting their focus to Europe. Expect, too, to see sterling struggle to preserve its status as any kind of global currency.
What we can be sure of is that yesterday’s vote has changed everything. The people have spoken. The problem is that they spoke with two distinct, dissonant voices, and bringing those voices together again in anything approaching harmony will be the work not just of what is left of the present Tory government, but of the next government as well, and possibly the one after that.
To be clear, the EU referendum was never about what it was about. The Remain side wished Britain to stay inside the European Union and fight for reform. There were those – a minority – who were genuinely enthusiastic about the prospect, and others, larger in number, who felt that the risk of leaving was simply too great and better the Devil we know than the one they suspected lay down the ever-narrowing independence path.
On the Brexit side, there were some who honestly believed that the EU was an institutional encumbrance, an administrative straitjacket, a yoke placed over the shoulders of the British people by those in Brussels who sought to steer us towards the United States of Europe. But these were only the front-men. In reality, Leave was always about one thing: immigration. Up and down the country, but overwhelmingly in England, ordinary people had only one end in mind.
They didn’t care about the unaccountability of the European Commission; they didn’t give a stuff about the supremacy of the European Court of Justice; they couldn’t care less about the European Arrest Warrant. No. They Wanted Their Country Back. True, they also fancied cutting off the £350 million a week they were told the EU charges us just to keep the show on the road. But most of them knew this was a con. First and foremost, what they wanted – what they demanded – was an end to the commuter trains of Babel, an end to high streets with shop signs written in languages they couldn’t even put a name to, an end to beggars, and, crucially, an end to the overcrowding, claustrophobia and confusion of the modern-day NHS.
The battle was, in effect, waged between the pragmatists – generally better-educated and better-informed (and all-too-often arrogant and unaffected by demographic change) – and the working people of England, who feel themselves oppressed and ignored, and the only question was, would fear of the unknown trump fear of foreigners?
Well, now we know. The Brexiteers have had their way. The old have triumphed over the young. Little England is about to become a reality. In politics, we are about to enter the gaudy territory of Game of Thrones. Meanwhile, the world will move on. As Robert Walpole famously observed when Britain, against his urging, instigated a trade war with Spain aimed at increasing our grip on the Caribbean and expanding the slave trade, “They may ring their bells now, before long they will be wringing their hands.”
