Don’t you think Brexit is fun, in a way? It’s such a perfect forecasting challenge. Everyone has passionate views, so there’s a real chance you can outsmart the other commentators by remaining rational. The field is wide open, Brexiters are certain that’s all going to be fine and Remainers frequently allude to the Titanic. Some smart people are going to be wrong. We should have preliminary results about 5 years – not that long.
I’m going to consider four Brexit scenarios and try and pick the most likely. In the spirit of being disinterested, I’ll start with a Brexit success scenario.
Brexit, and most people think it’s a success
Perceptions of Brexit will depend on two things: how well the UK fares, but also how badly wrong things go for the EU. If the EU does unexpectedly badly and the UK does unexpectedly well there is a scenario where Brexit will look like a good choice.
There will almost certainly be problems in the Eurozone as countries have to square the circle of monetary union without political union. Also in the mix are Catalonia, the migration crisis, and, of course, ‘black swan’ unforeseeable problems. Of these, the fundamental problems in the Eurozone seem the largest in scale and the most inevitable. Strains on the EU will almost certainly get worse, the question is how much.
What about the positive story for the UK? Here it is: a non-ideological, pragmatic politics take advantage of the UK’s new found freedom to legislate quickly without getting bogged down in EU bureaucracy. Remainers are won over when fisheries and farming – areas which have been badly legislated by the EU – become both more efficient, and, don’t worry Guardian readers, also greener. The UK works out how to legislate the gig economy equitably (another one for Guardianistas), and gets really nimble around tech legislation generally. Some EU migration is substituted for a more global approach, confounding accusations of xenophobia.
The shock of Brexit catalyses a new sense of purpose, including proactive and effective industrial policy. Questions of national unity galvanise genuine commitment to solving the north-south divide.
This picture is roughly what Philip Hammond thinks would be a good Brexit, according to his pre-budget interview with Andrew Marr. It’s also what Vote Leaves’ Dominic Cummings has in mind apparently (bit on science and education).
If this kind of Brexit happens, we might say something along the lines of: “I never believed in operation fear anyway, and look at the EU now. Isn’t Britain kind of exceptional in a pragmatic way? Look at all those philosophical French mired in youth unemployment.”
Brexit as a cautionary tale
The key to the worst Brexit outcome is that it shouldn’t be too bad too quickly. If it gets really bad, it will get called off (see the Remain scenario below). For maximum bad Brexit ill-tempered negotiations need to interminably zombie-shuffle towards an unknown destination. Other countries circle the moribund UK, waiting to take advantage of our desperate need for trade deals. Faith in UK institutions dwindles among investors. Borrowing to service the national debt gets more expensive, companies start building factories elsewhere. Unemployment ticks upwards, growth gets ever closer to zero.
At the 2022 election, in the context of another extension to the transition period, the UK has to choose between extremes. There’s Corbyn, with a stock-market crashing, bond-market titillating reversion to 70’s politics that promises to scare off the city and terrify big corporates.
Those who aren’t tempted by Labour can look to the conservatives. After 15 years of austerity, low wages and growing economic divergence between London and the rest of the country, the Tories will offer a free-market antidote: low wages, austerity and ever more emphasis on London as a city-state tax haven for the global super-rich. If the Tories win, Scotland may try for a go-around on landing a ‘yes’ to an independence vote. Negotiations with the EU would be even more difficult.
Of the two options, Cobyn is by far the most palatable. Tories called the referendum, possibly Labour would be in a better position to draw a line under it. Corbyn’s policies might alleviate people’s actual issues: housing, wages, geographic inequality. Any economic turbulence would probably be worth it, just to see the look on Nigel Farage’s face on election night.
The worst-case scenario for perceptions of Brexit needs a nice strong EU to make leaving look even more ridiculous. Here are some ideas. If the EU muddles through the Eurozone problems in some reasonable manner, it would not only be out of the woods, but it would acquire a reputation for virtual invincibility in the face of seemingly intractable problems. It would make the breakup of the EU, apparently possibly after 2008, seem inconceivable.
The migrant crisis is a difficult problem. It’s also an opportunity. The EU has already increased defence cooperation post-Brexit. What if migration crystalised the political will for the EU to intervene abroad? What if the EU’s fragmented national militaries worked together to take a lead in Syria or Libya, operating in the vacuum left by a less adventurous US? Might we feel that the traditionally interventionist UK had been usurped?
We’ll say: “Thank god my skills are transferable to other countries. Now I just need to learn German.” or “Not having electricity on Thursdays isn’t as bad as I thought.”
Breixt – what was the fuss about?
The two scenarios above are ends of the spectrum. In the middle is indifferent Brexit. There’s always existential angst around the EU, it’s unlikely that will completely stop. Meanwhile, the UK can have very difficult negotiations without a true crunch point coming. Is it likely that some post-ideological hyper-rational governance of the UK will emerge? Not really, but the current levels of polarisation might reduce in the face of practicalities.
We’ll say – “Remember when people knew the difference between the EEA and the single market? What were they again?”
Full remain seems improbable. But Brexit-In-Name-Only is on the cards. Over the next few years the reality of Brexit will become concretely apparent – the humungous bill, the impossibility of significantly reducing migration, the absence of any replacement trade deals, and stagnant living standards. At the same time, the UK will not have had a chance to do anything beneficial with its regulatory freedom. This is exactly the time period that Theresa May wanted to avoid having a general election in.
In this window, a disaster could tip the balance. No one can predict the economy – there could easily be a recession exactly at this critical juncture. The difference between weak growth and a small contraction is not directly that significant, but the news of negative growth could be disproportionately explosive. Another game changer would be any kind of violence in Northern Ireland. Or… that black swan again: war, May hit by a bus, other the things that are too out-there to even imagine.
I don’t know how the tabloids would back down from their Brexit-frenzy, but they might find a way. It could include a narrative of betrayal around David Davies, Borris, Gove, May, the BBC, Londoners, academics, cyclists, coffee-drinkers, vegetarians, heart disease or Maddie.
We’ll say: “Trump and Brexit? Did that really happen?”.
I think really good Brexit is unlikely – it requires two low probability events. Firstly, negotiating some ‘not too bad’ Brexit deal, secondly, not falling into the trap of a ‘Singapore’ style low tax, low regulation economy (which is nothing like Singapore). Such an outcome would be just as bad as a ‘no deal’ Brexit, addressing none of Britain’s underlying problems.
I think badly failed Brexit negotiations are unlikely because parliament would vote for a no-brexit / Brexit In Name Only option.
So my central prediction is for really quite bad Brexit followed by some flavour of political extremism. That comes with a side order of Remain-esque Brexit-in-name-only if the negotiations go badly enough quickly enough. The only thing that’s going to take the edge off either outcome is that the EU itself may well be looking a little less healthy than it is now.
A suitably un falsifiable prediction – let’s see how it looks in 2022.