We must stand up and be honest about the economic impact of leaving the European Union before it’s too late, writes Progress chair Alison McGovern
Having participated in public votes that produced unpredictable outcomes in 2016 and 2017, inevitably, there will be a tendency now for politicians to want to control the Brexit process. That is why jargon-laden conversations in Westminster are focused on procedure and Brexit technicalities. And while process matters, and members of parliament should use it to ensure proper scrutiny of one of the biggest decisions the country will make, it is essential that we remind ourselves what is really going on.
As progressives, we have a responsibility to explain what Brexit could mean in the long term. We need to be bold and look to the future. We must stand up to the Tories and say no to long-term economic decline and work that does not pay.
Leaving the European Union was never a good idea. Last month’s Brexit ‘non-forecasts’ from the Treasury and the Bank of England were sobering reminders of that. In the best-case scenario, there will be no fiscal benefit from leaving the EU, and real wages could be worse hit than gross domestic product. The government’s own analysis tells us the most we can hope for is no real increase in wages for many years in the future. On the other hand, we should be prepared that real wages will be 10 per cent lower than they otherwise would have been.
Again, inequality looks set to be bolstered by Brexit as prices rise and the people closest to poverty continue to feel its impact. According to the Office for National Statistics, basic groceries like milk, sugar and basic fruits and vegetables have all risen since the referendum result. The London School of Economics’ Centre for Economic Performance found that the fall in the value of the pound as a result of the Brexit vote has increased the cost of living for people in poverty by £400 per year. As the Brexit effect works its way through, food prices could spike again.
Worse still, the government admitted that regions that have seen serious economic decline in the last decade – the north east, the north west and Yorkshire and the Humber – are particularly at risk. This is because manufacturing could be hugely affected by the United Kingdom leaving the European single market, which has gone beyond any other international trade agreement by removing barriers to trade in goods and services. If Brexit happens, there will be no trade deal that makes up for what we lose.
Ultimately, the City of London and the banks will weather the storm. The economy of London is much more global, and less dependent on European trade. But Bank of England governor Mark Carney revealed more when he said many industries and infrastructure in Britain are not ready for what the future could hold. A vote for Theresa May’s ‘deal’ in parliament would be a vote for the continuation of slow economic decline in communities outside of London and the south east that can least afford it. No matter how seductive ‘sovereignty’ sounds, Brexit is robbing those with the fewest advantages in our country.
We need to be radical and think practically about what we want the future to hold. This will be a challenge, especially when many of us cannot see beyond next week.
With Parliament in deadlock, our only option may be to trust the British people to make a decision on the way forward. It seems the prime minister is almost convinced of this herself having embarked on a tour of Britain and the prospect of television debates just around the corner. It is clear the prime minister believes in the people of Britain to come to their own conclusions. She clearly values what they think – so why not have a public vote?
And on the Labour side, we promised to judge the Brexit proposal on its merits, we have done so and it is wanting. If a general election does not happen, our policy is clear: the public ought to give their verdict.
We can wait for the House of Commons to come to some sort of view, but it will always be an uncomfortable accommodation of disparate views: that is the nature of having a hung parliament. Or we could conclude that only the public can resolve this and craft a better democratic process than previous referenda. We could work out how to hold a deliberative process not just about our relationship with the EU, but also about the domestic causes of unhappiness that led to the Brexit vote.
We need a new social contract in Britain that does not accept that 30 per cent of all children in Britain live in poverty and almost 10 per cent of families where all adults work full-time live cannot make ends meet. Our institutions – of education and health as well as the welfare state – will be in tatters by the time the Tories are finished with them. As the public are turning away from Brexit, thinking that it is now a distraction, we need to stay focused on how much it could worsen those same public services, but also have a plan to get the country back on track.
All eyes will be on parliament in December. To those who say the power lies in parliamentary procedure, I would say this: it is what is outside of Westminster that should tell us where we go from here. It is not the parliamentary mathematics but the mathematics of inequality that should be our constant focus.
Alison McGovern MP is chair of Progress
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