Last week, Britain voted to leave the European Union. A shock vote that is expected to change the face of the UK and Europe for years to come. For the UK, Fitch said the outcome of the referendum would hit investment because of the uncertainty on three issues: the future of the UK’s trading relationship with the EU; the regulatory backdrop; and political uncertainty, including a possible referendum in Scotland. Of all the crises the EU has faced in recent years, the UK vote to leave the EU may well be its greatest challenge. Brexit is pushing the EU into a period of introspection that will pervade virtually everything the EU does in the coming weeks, months and even years ahead. The UK has experienced a rise in hate crimes after the vote, which reflects the momentum gained by right wing parties such as UKIP. Nigel Farage’s party, which is hostile to immigrants established a base of voters that is difficult to ignore anymore.
I am not an expert in UK politics but I am very interested in the development of affairs on the island. I believe I was lucky enough to get the chance to complete both my undergraduate and postgraduate degrees in the United Kingdom. I spent four years in Southampton, from which Titanic shipped to the new World and one year in Manchester, the cradle of the industrial revolution and currently home to the most affluent and celebrated football clubs in the world. I cannot deny I have always been fascinated by Britain. Perhaps this might be due to trivial reasons like my obsession with Manchester United or the fact that I was heavily influenced by my mum who lived in Hertfordshire in the South of England for almost 20 years.
My love and respect for Britain was further amplified during my stay in Southampton and Manchester. I was utterly captivated by the inclusiveness of the country’s institutions. I was overwhelmed by how the University absorbs thousands of international students and eases their integration with the local culture. It was quiet remarkable to me that there was a mosque on campus in Southampton. I can safely conclude that over the 5 years I spent there I neither felt discriminated against nor encountered an incident of racial abuse due to my background or color.
I had many British flatmates and I was also part of the University football team whose players were predominantly English. Despite the UK being an international hub, my main observation was that the majority of Brits at Uni were reluctant to open up to foreign students and establish friendships. They were more inclined to confine themselves in their comfort zones and stay within English circles. Up to this moment, I am not entirely sure if this had to do with the rather reserved nature of Brits or more with some general hostility towards foreigners at large. From my experience, I cannot state that I was discriminated against in a direct manner but what I can reveal is that I never felt that the majority of British students were so keen to open up to other cultures. I remember I often used to go out with my football team where they would get pissed and loosen up a bit (because they probably forgot that I am a foreigner, just kidding) and when I saw them the next morning in the library they would avoid eye contact. I experienced the same attitude with my British flatmates. I also noticed that many young Brits who came from small and medium English towns knew so little about other cultures. Currently, I work in the UAE and it is also not so difficult to see the Brits clustering in their own circles. It would neither be fair or objective, however, to attribute Brexit to a sort of innate isolationist tendencies of the Brits. Also, attributing Brexit solely to xenophobia or racism does not in my opinion elucidate the bigger picture, in spite of the surge in hate crimes against foreigners after the referendum.
During my University years, I observed stark differences between London, the affluent south and the less privileged North. London, the capital of the world, is the home of culture and diversity. London embodies everything beautiful and attractive about a city. I have visited London countless times before moving to the UK in 2008 (the year of the financial crisis) and I frankly never expected the disparities between London and the rest of the UK to be so remarkable. One could straight away feel the concentration of wealth in London. Ask young Brits, they will tell you that they dream of securing a job in London, the city of opportunities.
I have been to so many British cities namely: Southampton, Manchester, Stoke, Brighton, Bournemouth, Dundee, Glasgow among others and it is evident that there are large socio-economic disparities between the capital and the rest of the country. In those cities it is quiet common to encounter drunk Brits filling pubs during the day. The number of homeless people in a country as affluent as the UK left me puzzled. When I compare the state of affairs in the UK with its Western European neighbours such as the Netherlands, Germany, Austria and Switzerland among others, I can safely affirm that the UK is lagging behind on multiple fronts. I remember going from Manchester to Munich and it just struck me how the socio-economic gap became so wide between two cities that are very similar in size and importance.
As an Egyptian, a country characterised by socio-economic inequalities, I want to look at Brexit through the lens of social justice. British deindustrialisation and the dominance of southern England did start with Thatcher’s election in 1979. Global changes in trade and manufacturing that continue to this day – the export supremacy of Germany, the outsourcing of factory work to Asia – had been excavating out northern Britain for years. Thatcher’s political philosophy and economic policies emphasised deregulation (particularly of the financial sector), flexible labour markets, the privatisation of state-owned companies, and reducing the power and influence of trade unions. Those Thatcherist policies have significantly contributed to the impoverishment of the working class in the North of England and concentrated wealth within the service and financial sector of the city.
It was very clear that Brexit found substantial support in the North of England whereas London voted strongly for Remain. It is early to draw final conclusions from this but the outcome gives us a signal. London is a great beneficiary of openness and integration with the EU. Free trade, financialisation of the economy and the fruits of growth have largely trickled down to London. Hence, it is understandable for Londoners to demonstrate great support for staying in the EU. Yet, this was not necessarily the case outside the capital, which strongly voted to leave the EU. Martyn Sorrell, the head of Hermes Investment Management says that ‘’the pay gap is growing and growing and it is comparable to the situation in north-east and east England where people feel out of touch and not represented”.
Additionally, despite the repetitive warnings of the IMF, OECD, prominent economists and world leaders such as President Obama about the potential economic hit that UK would have to face in the case of Brexit, voters largely ignored such calls and stun the world with a vote to leave the EU. One of the leading Brexit campaigners and a potential candidate for PM Michael Gove said “people in this country have had enough of experts”. A pre-referendum YouGov opinion poll tells why: “Leave” voters had no trust whatsoever in the advice-givers. They did not want their judgment to rely on politicians, academics, journalists, international organizations, or think tanks. One explanation is that many voters attach little value to the opinions of those who failed to warn them about the risk of a financial crisis in 2008. Another explanation is that there is a widening gap between economists/scientists and the general public. Academic work and policy papers do not in many cases reflect realities on the ground. Many people also feel that ‘’experts’’ have neither understood their daily struggles nor their declining living standards. Most importantly, they have never contributed to the betterment of their lives. In Egypt we went through a similar experience when prior the 2011 uprising World Bank and IMF reports were indicating that Egypt is on the right economic path. Yet, the masses never tasted the fruits of growth, which only translated into glamorous gated communities for the tiny elite.
Brexit is also a rejection of globalisation, which promised prosperity and better societies. The age of globalisation began on the day the Berlin Wall came down. From that moment in 1989, the trends evident in the late 1970s and throughout the 1980s accelerated: the free movement of capital, people and goods; trickle-down economics; a much diminished role for nation states; and a belief that market forces, now unleashed, were unstoppable. Brexit, in my opinion, was more than an objection against the career opportunities that never materialised and the affordable homes that never got built. It was a protest against the economic model that has been in place for the past three decades that left millions behind relying on food banks and zero-hour contracts.
It is too early to forestall the socio-economic consequences of Brexit. Though, it is a strong signal that people reject the status quo. In the age of neo-liberalism, widening inequalities and the harsh austerity measures imposed on people, far right movements find the fertile ground to nurture xenophobia and racism. I fear Britain surrenders to the regressive forces and abandons its tolerance after the referendum that left the country divided.
Egyptianomics 