Outcome of the European Union Referendum

Lord Howarth of Newport Excerpts

Tuesday 5th July 2016 Lords Chamber

[Lord Howarth of Newport (Lab)]

My Lords, the fractures in the United Kingdom by region, education, class, age and race that have been so searingly exposed by the referendum are paralleled across the European Union. The referendum precipitated a crisis in Britain which has been long in the making. Identical pressures have also been building across the EU. The EU is blighted by the socially polarising effects of market forces, compounded by the deflationary effects of the single currency and the democratic deficit in its governing institutions. The EU cannot last as it is, but there is no prospect of fundamental reform. The far right is on the rise across Europe. The EU is not a safe haven. We are right to leave and to take full responsibility for ourselves.

The remain campaign urged the British people to vote for the status quo. It should not have been a surprise that a majority refused to do so. In the years since we joined the EU, people in former industrial communities have seen the destruction of their way of life. Jobs for life have been replaced for many by intermittent, precarious employment. Unskilled migrants have depressed wages. Training opportunities have been withdrawn. Homes for many have become unaffordable, while unearned wealth has piled up for others fortunate enough already to own assets. Steeply tapering benefits have blocked the way out of poverty. Those reliant on social security—social solidarity—have been jeered at as skivers and scroungers. The public realm—social services, libraries, parks—has withered. People now struggle to get an appointment to see their doctor. Mental health services have collapsed. The Resolution Foundation tells us that 11 million households have seen their living standards stagnate since 2002. In his powerful speech, the most reverend Primate spoke of the shocking extent of child poverty. Approaching a million 16-24 year-olds are not in employment, education or training. Many fear that their children and grandchildren will be worse off than they are.

This is not all, of course, the fault of the EU; we have made damaging policy choices in Britain. But the EU is inextricably associated with the ravages of market forces and globalisation, which have been among the deeper causes, along with the disruptions of the digital economy. The slogan “take back control” was profoundly appealing to people who feel victims of forces they are powerless against and that the politicians who should look after them have done too little to control. The referendum was a vote of no confidence in the powers that be—in the major political parties as well as Brussels.

What should we learn from the referendum? What are the implications for British politics? The neoliberal orthodoxy that has prevailed since the mid-1970s, in Britain and in the EU, has run its course economically and politically. Weakly regulated and greedy bankers led us deeply into debt, both private and public, wrecked the public finances and the Government’s capacity to ameliorate social conditions, and left the people to pick up the tab. The extreme inequalities and excessive rewards for the few generated by global capitalism have weakened consumption and investment. The centre-right may try to persist with this toxic orthodoxy, though even the Chancellor seems to be in retreat. The centre-left must now reinvent social democracy, as the SNP, subsidised by English taxpayers, has done with political success in Scotland. This will be difficult to do with the overhang of debt, but the lesson of the referendum is that we must share wealth and opportunity more equitably. We must rebalance the economy away from financial services and away from London. Policy must sustain demand and investment where the market shies away. An interventionist state must provide security, addressing the sources of poverty. The damaging dichotomy between public and private must be put behind us.

New politics as well as new policies are needed. The campaigns on both sides were ruthless and angry. Many found in the referendum that their sense of personal identity was inseparable from their sense of national or European identity. The result was anguish for the losers. Some of them have lashed out in demeaning, snobbish contempt for those they see as ignorant, bigoted, selfish leavers. It also produced vicious racism from some of the winners. There was a moment, however, during the campaign, after the murder of Jo Cox, when everyone paused and people realised that crude antagonism, abuse and threats will not do. We need to nurture that recognition. The challenge for the new political leadership is to appeal to our better nature, abate the politics of anger, reconcile our people and heal our national psyche.

We have to start by demonstrating respect for those with whom we disagree. Like it or not, the decision to leave the EU was an expression of sovereignty by the people to whom Parliament had referred back this great constitutional issue, and it must be accepted without demur. Any other course would disastrously intensify disaffection from Parliament, deepen the gulfs in our society and stir up street and mob politics.

After the parties have resolved their leadership issues, and after we have held a thorough debate about the options for establishing new relationships with Europe and the world, there should be an early general election. A new Parliament is needed, predicated on the new reality. A new Government need to be equipped with a mandate for the negotiation.

At the election, the parties should also explain how they plan to renew our politics, to rehabilitate democracy across the UK. We must fund politics differently, so that the parties are not seen to be beholden to sectional and remote interests and the aura of corruption is removed from Westminster. Real decentralisation of power and resources is needed throughout Britain. The Scots can be won back for the union. Opinion is far from monolithic in Scotland and the economic prospects for an independent Scotland would be dire.

This is a critical turning point. We must build confidence among both remainers and leavers in our future outside the EU. We must remake our politics and democracy. We must find ways to uphold democratic values and authority in a global economy so that markets are servants, not masters. We must recreate our international friendships and trading partnerships and cherish our cultural links with Europe and the world. We must attract investment and talent, raise skills and transform our productivity. We must convince people who are fearful and pessimistic that politics will work for them and that prosperity will be fairly shared. We must support vulnerable communities and instil confidence within them that immigration is not to be feared; and, among minorities, that they are welcome fellow citizens. We must find shared principles and ideals. Britain can be liberal and kindly, purged of xenophobia and hate crime. With leadership, all these things are possible. If politicians, spiritual leaders, community leaders, social activists, journalists, opinion formers and citizens fail in this, we will see the debilitation of parliamentary government, insurgent fascisms of the left and the right, a crumbling of our society and a disintegration of the United Kingdom.