Culture Clash – Why Inequality Led to Brexit

Social inequality and divisions between classes, generations and regions were key in fostering anti-European sentiments among many Britons in the recent EU referendum. British social policies are in dire need of reform. 

The British people’s decision – by a 51.8% majority in a referendum – to leave the European Union has sent shockwaves around the world. For the first time in living memory, the direction of European politics towards ever-more integration and internationalism has been formally reversed. In a context of rising nationalism and populism around the Western world, many who had thought the liberal postwar order secure are anxiously asking: Why?

As so often with referenda, disentangling the various motivations and causes which led to a particular vote is virtually impossible. Different, overlapping reasons appealed to “Brexit” voters: notably, discontent with sharing British sovereignty with a crisis-prone EU, discontent with the national political-media Establishment, and discontent with immigration.

Outgoing Prime Minister David Cameron took the decision to hold a referendum in part on a political calculation: prior to the 2015 parliamentary elections, the Conservative leader promised a referendum on Brexit in order to forestall the rise of the United Kingdom Independence Party (UKIP). UKIP for its part had become a steadily growing force, particularly among the white English working class, by campaigning against the EU and immigration.

Cameron’s strategy worked in the short term: his party won an absolute majority of seats in the elections, while UKIP, with over 12% of the vote, nonetheless received just one seat due to Britain’s peculiar first-past-the-post electoral system. The British people’s disaffection with politics and immigration was then channeled against the EU. But now Cameron has lost his referendum bid and is on his way out.

Ironically, membership in the EU was not the primary factor behind immigration to Britain. Certainly, Britain had to welcome many European citizens, particularly from Central Europe but also from France, Southern Europe, and elsewhere, who wished to make their home there. However, the fact is only one in the UK were from the EU. Two-thirds of immigration to the UK – which Cameron had pledged to reduce prior to his election – was then the responsibility of Westminster, not Brussels. Furthermore, there has been evidence that EU immigrants, tending to be more educated, paid more into the British treasury in taxes than they have cost in public services.

Furthermore, the British had secured themselves a unique position in the Union. Being neither part of the euro common currency area or the Schengen Area of free movement of people, Britain was able to largely isolate itself from the crises on the Continent.

A country of haves and have-nots

Britain has long been one of Europe’s most successful countries. The economy recovered from the financial crisis and jobs growth has been impressive, with unemployment reaching a low of just 5%. The government’s “austerity” has if anything been moderate, relying on soft money and loose deficits by European standards, although there have been some cuts to public services. However, employment growth has come at the price of job insecurity and a significant decline in real wages.

Competition for stagnant-to-declining wages and public services, in a context of relatively high immigration, appears to have motivated Brexit sentiment. As the Bertelsmann Stiftung’s forthcoming Sustainable Governance Indicators report on Britain notes:

Strains in social policy are evident, from the precariousness of many areas of the [National Health Service] and care systems to the uncertainty about whether the radical shift in the benefits system can be made to work as intended. In this regard immigration has contrasting effects. Migrants help significantly to fill jobs in social services, but part of the opposition to still more migration is that it puts acute pressures on many local public services.

The scale of immigration to the UK in recent years has been considerable. The foreign-born population makes up 13% of all residents, almost as high as in the United States of America. The number of immigrants in Britain has furthermore more than doubled over the past 25 years, from 3.7 million in 1990 to 8.5 million in 2015. There is evidence unskilled migration has led to a decrease in wages, albeit, according to the Bank of England, not a very large one.

Furthermore, Britain has also become a more unequal country over the years, a country of haves and have-nots:

[There is] the persistence of divisions around various social criteria in addition to class, such as geography or race. […] [Inequality] remains relatively high compared to other OECD countries, and the distribution of wealth has become more uneven.

Inequality has been aggravated in particular by a tax system incapable of reducing tax evasion and by the doubling and tripling of university fees to up to £9,000 per year.

These social factors appear to have combined with identity politics, particularly surrounding English identity. This was evident from both the Brexit voting results and polling data. In England and Wales a majority of people voted to leave the EU, with majorities for Remain in Scotland (boosting secessionist movements) and Northern Ireland. In one poll, 72% of people who identified as “English” said they supported exit, whereas no majority supported Leave among those identifying as “British,” “Welsh,” “Scottish,” or “Other.” Moreover an absolute majority of those polled believe immigration to Britain could be better controlled outside the EU.

There were also clear generational, regional, and class divides. Pensioners supported Leave more than three times as much as young people. The white English, rural, less educated, and working class tended to vote Leave. This bears all the hallmarks of a classic culture clash within the country, between elites (who, on the whole, tended to support Remain) and ‘ordinary’ people, urban and rural, educated and uneducated.

The benefits of Brexit for Britain are likely to be slight

After the initial shock, the practical results of the Brexit vote remain to be seen. Much depends on the actual deal (or lack thereof) the British government and European leaders and officials reach. In practice, not much might change at all, particularly if the EU demands the maintenance of free movement of people in exchange for access to the Single Market (and, one might add, in exchange for the right of British citizens to live and work in Continental Europe). The overwhelming majority of officials on both sides of the Channel wish for trade to continue undisturbed.

The UK will probably be able to have more flexibility in how it spends money (by repatriating at least a part of its EU budget contribution) and in securing trade deals with other countries. But the benefits of this, I suspect, will be slight. Britain, however, will have lost all official representation and voting powers within the European institutions, meaning a loss of regulatory influence over the country’s biggest export market, and possibly spelling trouble for the all-important financial sector in the City of London.

The outcome of Brexit then remains uncertain. What is clear however is the following: in a context of haves and have-nots, of growing inequality, of changing national identities, and of a growing culture clash between more internationally-minded elites and a large portion of the people, Brexit is unlikely to be the last manifestation of populist and nationalist politics.

Craig Willy is an EU affairs writer. He writes for the Bertelsmann Foundation’s SGI News and BTI Blog.

The forthcoming edition of the Sustainable Governance Indicators, SGI 2016, will be released at the end of July 2016.