Politicians must heal a fractured UK society

Political journalist Robert Peston has grave concerns over the future of Britain, seeing profound risks with or without Brexit

The UK is heading for a calamity “significantly worse” than the financial crisis, according to journalist Robert Peston. While the “mess we are in today” can be laid to some extent at the foot of the economic and financial shocks of the 2007–08 financial crisis – including the impact on living standards – he believes there is a more fundamental problem underlying the nation’s dithering over Brexit. 

“We have messed with the confidence people have in the way we run Britain, with judges and democratic institutions: this is Humpty Dumpty falling off the wall. You break confidence in the basic infrastructure of the country and it’s difficult to put it together again,” declared Peston in his keynote address to the conference.

For Peston, the “Brexit mess” is the result of underlying problems in the UK. The majority of economically underprivileged people, the unemployed and those living in social and council housing voted to leave the European Union, despite evidence they would be poorer by leaving. 

“These people saw the Brexit campaign as a proxy for all the bad things that had happened to them and a reaction to a country that was not being run in their interests,” he said. “We are living through the longest period of stagnating living standards and productivity since the early 19th century. We will not get back to the living standards before the financial crisis until well into the next decade.”

At the same time, the technological revolution is aggravating the perceived unfairness of the way the country is run. Online companies such as Google and Facebook have made their founders fortunes over a short period of time, but are perceived as not playing by the rules, by not paying taxes at a rate that most domestic institutions – and people – pay. 

Simultaneously, there is a feeling the UK is run in the best interests of those who are already wealthy. There is an absence of a credible fiscal policy with the government handing over responsibility to the Bank of England. The UK, however, is not alone in this tactic.

“We are at the end of the central banks’ ability to stimulate the economy with zero-bound rates. We have undermined the ability of banks to create stimulus,” said Peston, pointing to the deliberately inflated asset prices that have done little beyond widening the gap between rich and poor.

Despite the anxiety many feel about the possibility of a Labour government led by Jeremy Corbyn, that party has put its collective finger on what went wrong and has a plan on how to fix it, at least in part, suggested Peston. 

An analysis of the worst-served areas of the country, where basic social institutions such as community centres, libraries, youth clubs, swimming pools and basic transport have been undermined or closed, reveals that these areas almost completely match those that voted to leave the EU.

This near-correlation of Brexit support to places where communities feel the most abandoned is where the Labour party wants to concentrate efforts. Some of its ideas are strong enough to have cut through the Brexit rhetoric, advocating “perfectly rational policies” aimed at improving the worst-hit communities. 

The policies are nothing to do with being in or out of the EU. The country, according to the Labour party, needs schools that are fit for a world of robotics, not geared towards turning children into robots. It believes there is something fundamentally wrong when a great number of people in full-time employment find themselves forced to rely on food banks.

As Britain tears itself apart over when, how or even if it leaves the EU, the data shows conclusively that leaving will have negative economic effects. For example, the gap between what investment levels should be and what they actually are is widening at an accelerated pace. The trend began immediately after the vote to leave the EU.

The country is already poorer. The lack of investment is undermining the UK’s ability to create wealth and fix underlying social problems, driving the further fracturing of society. 

Together with the significant problems facing Britain – environmental concerns, an ageing population, the need to improve healthcare and pensions – is the propensity of social media to drive people apart. “To a large extent, social media is undermining our ability as a nation to forge a common purpose,” said Peston. 

He sees people arguing not on the basis of empirical evidence. Rather, they are saying evidence is serving some “elitist cause” and “alternative” truth is the norm. “This is dangerous stuff,”
he says.

Fuelling this social media backlash are leading politicians on both sides of the Atlantic. The UK prime minister Boris Johnson and US president Donald Trump are doing things differently from the way politicians have done things in the past, using Twitter and inflammatory language to stir up millions of discontented middle- and lower-income citizens. 

“The way [Johnson] is tapping into this discontent is dangerous. He is describing the institutions and individuals who people them as the ‘enemy’. They have been successful in driving a wedge between the people and democratic institutions,” he says. “This is an even more dangerous road to go down than Brexit, fracturing the very basic infrastructure of what makes Britain successful: confidence in the rule of law and democratic institutions. It is undermining in a damaging way our ability to prosper.” 

As an example of this technique, Peston uses the recent UK Supreme Court ruling that the prorogation (suspension) of parliament by the government for five weeks was illegal. Through his contacts, he has heard some people at the centre of government describing the 11 judges that made the unanimous ruling as elitist “remainers” trying to frustrate Brexit. 

“This is nuts,” declared Peston. The judges made a rational decision based on a sensible rational assessment of where the power in Britain’s political structure lies. While there was no precedent, the principle that sovereignty lies with parliament and not the executive was the basis of the judgment, explained Peston. 

But when politicians deliberately distort the truth and rational decisions, trouble will follow, he predicted. 

“Johnson is someone who admires much of what Trump has done in connecting with a particular audience, using language that most recoil from. In economic terms, he’s a trip back to the 1970s,when there were no fiscal constraints and rules, almost like the French president putting huge faith in infrastructure projects. He wants to be a big spender and is desperate to appeal to Labour working-class voters who went for Brexit. His priorities are spending on the health service, policing and schools.”

If, however, at the next election, Labour were to take control, it would preside over the “greatest transfer of power and income from capital to labour in history”, according to Peston. One of the most dangerous policies for the City of London and financial services in particular is the Labour party’s intention of imposing a financial transaction tax. That, believes Peston, would shift business away from London.

Whatever the final result of Brexit – and the next general election – Peston believes a “terrible anger” against established politicians will continue. This rage is doing significant damage to politics and the nation.

Many in Britain bought into Brexit on the basis that it would be a way to “take back control” and make the country stronger. “However, there is a genuine risk that Brexit will lead to the break-up of the UK. There is increasing pressure in Scotland to be independent and momentum for a vote to unify Northern Ireland with the Republic of Ireland. The stakes are incredibly high,” concluded Peston.

 

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