October 10, 2016
I’m sitting opposite the “Spitfire” Meeting Room in Southampton airport. The echoes of “their finest hour” are everywhere on the south coast of England, not surprisingly. Southampton, one of the main ports for British trade with Europe, voted overwhelmingly for Brexit, proving that there’s no end to the self-harm that certain parts of England will endure in the name of sovereignty.
But sovereignty is what it’s all about here. Despite the fact that most workers in the airport appear to be foreign – or maybe because of it – the mood down here in deepest Hampshire is strangely anti-foreigner.
Britain has been a land of immigrants for a long time now, not least for the six million British people who have at least one Irish grandparent. But the Irish are not foreigners here and never have been seen as such.
While there may have been casual racism against us from some quarters, there is no real sense that the Irish are regarded as foreigners by most. Different yes, but foreigners, no.
What is strange is the anti-immigrant shift in British political discourse. I’m flying to Belfast City airport in East Belfast, another constituency that voted to leave the EU. In East Belfast, the issue wasn’t foreigners – because let’s face it, there’s hardly a queue of immigrants bashing down the doors of the Lower Newtownards Road. In East Belfast, Brexit wasn’t anti-foreigner; it was anti the other lot across the Lagan.
However, both votes are linked by nationalism. In Hampshire, it is English nationalism. In East Belfast, it is British nationalism. Interestingly, English nationalism may eventually undermine British nationalism, leaving unionists high and dry. In fact, if you gave the English a say, it’s highly likely that the English would vote for the unionists and indeed the Scottish Nationalists to take a hike.
Over the course of my few days here, which involved a short speech in the non-EU Channel Islands, the sense of English nationalism has been more palpable than at any other time that I’ve spent out here in the Shires. This tone was echoed at the Tory Party conference and British business people – at least the ones I have been speaking to – do not like what they are hearing from Theresa May.
The Tories have always been the party of business. And this means open borders, free trade and of course, immigration. If the Tories veer off in a protectionist direction, who will speak for British business?
What was the Home Secretary doing speaking of ‘flushing out’ companies that employed foreigners? What about the call for the NHS to be populated by British staff? Anyone who has ever been in a British hospital knows that the entire system is held together by immigrants. What would the NHS be without Jamaican nurses, Polish porters or Indian doctors?
However, the mood has shifted profoundly. There will be a hard Brexit. From here, Britain’s economic and social policy will look and feel like the 1970s. There will be much more government spending on public services.
There will be a significant increase in state aids to bolster British industry. This is due, in part, to address the fact that although all of England voted for Brexit, the Midlands and the North’s industrial decline needs to be arrested. This means re-industrialisation with the help of subsidies.
The message the Tories want to put out is they are a “One Nation” party and they are the party of government for all England.
This means that the Tories, ever opportunistic, are going to drive home the advantage Brexit gives them, even though the party actually campaigned to Remain! This has been conveniently overlooked. The main imperative now for the Tories is to destroy the wounded Labour Party. Labour’s self-inflicted immolation under Jeremy Corbyn is a huge opportunity for the Tories and they intend to be the party of all things for everyone, everywhere in England.
This means Britain’s budget deficit will rise substantially. Interest rates will rise too, maybe not substantially, but any rise will be psychologically significant given that they have been at zero for some time. Any moves to kick out foreign workers means wages have to rise in Britain because immigrants keep wages down. The Bank of England will keep an eye on this and also it will be on alert to look tough in reaction to the criticism Theresa May doled out in Threadneedle Street’s direction in the past few days.
In short, it’s all change across the water. The Brexiters have been emboldened by the fact that in June, 71 per cent of City economists said Britain would experience a recession this year if Brexit was voted for. Brexit was voted for and what happened, the economy didn’t fall off a cliff; in fact, it expanded. The IMF now says Britain will be the fastest growing large economy in the world next year! The experts got it totally wrong.
The rapid fall in sterling has given exporters a massive shot in the arm. The fall in sterling has also led to a massive increase in mergers and investment as foreign investors pick up UK assets cheaply.
Here in Belfast you can really feel the value. Things are so much cheaper than in Dublin, it is surprising that anyone shops in the Republic anymore. I expect Christmas shopping in the North will go through the roof this year. The Irish economy has to deal with this.
The euro has always been an impossibly inconsistent currency for us. The punt was just fine, and now our euro commitment, which has been a total disaster for Ireland with a massive currency-related boom followed by a massive debt-related bust, will come under scrutiny again.
However, the long-term outlook for sterling has to be that it rebounds against the euro. So the bargains are there to be picked up now.
Ireland has to deal with Brexit. There are many opportunities for us. However, it is now becoming rapidly evident that the Brexit has changed Britain, changed it utterly.