Saturday, 23 June 2018

Brexit Vote Revisited

One of the benefits of having my own blog is the opportunity to have a say on anything I like.  Of course most of the articles I write are on investments and personal finance related matters. A couple of years back I wanted to put down some of my thoughts on the Brexit debate and outcome. At times it seems like the country has spoken of little else since then and now at the second anniversary there will be more media debate and analysis so apologies in advance and if this subject is a real turn-off ...feel free to skip.

So, June 24th 2016 and I was very surprised at the outcome given all the dire warnings of immediate economic armageddon if we voted to leave from just about every establishment figure from George Osbourne (who?), Mark Carney, Christine Lagarde from the MFI, Barak Obama and a host of so called experts and economists.  Indeed we were told there would need to be an emergency budget the day after if we voted 'Leave'.

Here is my last post which summed up my thoughts on the matter shortly after the referendum.

The Treasury estimated that up to 820,000 jobs would disappear within two years of a vote to leave. Two years on and the reality is that more Brits are in work than at any time since records began. There are now over 1.5 million more jobs created since the referendum...currently ~32 million.

The Democratic Process

In years past, one way to resolve an issue would be an armed battle between two sides. I think we have moved on a little since then and most sensible people would agree that this method is a bit crude and unsophisticated and maybe the better solution is to debate the issues and then have a vote. Of course, the vote must be free and fair and everyone affected should take part. This is democracy and it only works if both sides agree beforehand to accept the outcome...if one side does not accept the outcome then we may well return to the old ways of doing things.

We have a general election every five years. There are some close results, sometimes within just one or two votes either way and there could be several recounts but it is traditional that one person is elected and the losers accept the decision of the voters. They can redouble their efforts next time round.

So, there was a debate in Parliament in June 2015 on whether to hold a referendum and after all the debates, the MPs overwhelmingly voted by 544 to 53 to hold a referendum on whether we should leave or remain in the EU. This was also supported by the House of Lords. It would be decided by a simple majority of 50% +1. There would be a simple question - "Should the UK remain a member of the EU or leave the EU?". Everyone aged 18 or over could vote.

The government sent out a leaflet before the referendum advocating a vote for 'Remain' with a promise that it would implement the decision of the electorate.

What is more, everyone's vote counted unlike a general election when voting is on a constituency level and many votes are 'wasted'. In the referendum, every vote for and against in every part of the UK counted and when every vote had been counted the final figure was 'Remain' 16.1 million (48.1%) and for 'Leave' 17.4 million (51.9%). The turnout on the 23rd June was very high at over 72%. If the majority of 1.3 million people were to stand finger tip to finger tip, the line would stretch from the UK to the football World Cup in Russia. Here's the BBC results breakdown

The Aftermath

Like most people in the country, I was surprised by the outcome. I voted to leave but really did not expect the majority would vote to leave. I thought it may be close but I was of the opinion that it would be 55% remain similar to the referendum in Scotland in 2014.

I would have been disappointed but I would have accepted the outcome like a good democrat and moved on.

A year later and we had another general election which placed Brexit firmly at the top of the agenda. There was not much difference between Labour and Conservative.

"As we leave the EU, we will no longer be members of the single market or customs union" Conservative Manifesto 2017

Immediately after the election, John McDonnell said “I think people will interpret membership of the single market as not respecting that referendum.” This was consistent with Labour’s manifesto, which promised to retain the “benefits or the single market and the customs union” without being a member of either.

The Liberal Democrats offered an alternative to the main parties with their pledge of a second EU referendum on the Brexit deal.

The Tories increased their share of the vote to 42.4% but lost 13 seats and their majority, Labour narrowed the gap increasing their share to 40% and gained 30 seats and Lib Dems managed just 7.4% of the vote and a gain of 4 seats. The big losers were the SNP who lost 21 seats and UKIP who lost their only MP and managed just 1.8% of the vote compared to 13% in 2015.

Of course there has been much analysis and discussion post the referendum. I have seen articles which suggested 'leave' voters were too stupid to realise what they were voting for. I think what has caused most disappointment/sadness on a personal level is the refusal on the part of a hardcore of remain voters to accept the outcome. I can understand their disappointment and maybe shock/disbelief but surely the very essence of out democracy is that we accept the decision of the majority.

For sure those 33 million people who cast a vote cannot possibly have understood all the implications of the vote. For me, I guess mostly it was a 'gut feel' like so many other decisions in life which defy precise logical analysis. Yes I read the papers and listened to the TV debated in the lead up. I discussed with friends and relatives and researched online but at some point, maybe a month or so beforehand, I had more or less made my decision. I will not know until maybe 10 years after we have left (if we actually leave) whether it was a good decision or completely bonkers. If I had to vote again tomorrow, it would be exactly the same.

I am very much of the same opinion as MSE's Martin Lewis who made the point "The principle of our democratic process far outweighs any benefits from remaining in the EU" (Question Time 3/5/18)

There have been challenges in the courts, calls for the referendum to be run again, objections from the SNP who think the result should not apply to them because Scotland voted remain - even though a year earlier they lost their own referendum as Scotland voted to remain as a part of the UK.

There have been anti Brexit rallies in London, Oxford, Bristol and elsewhere and now we have a campaign from the usual suspects...Chuka Umunna, Anna Soubury, Lord Adonis, the Lib Dems/Greens for a 'people's vote' on the final deal organised by remainers whose motives I mistrust as I believe they really don't accept the decision of 2016 and don't want our elected MPs in Parliament (all elected after the referendum) to have the final say on whatever deal is agreed with the EU after 2 years of intense negotiations.

It is not surprising these anti-Brexit rallies are in London and university town as the clever people tended to vote remain. I noted at the time that 29 out of 30 areas with the most graduates voted 'Remain' whilst 28 out of 30 areas with the fewest graduates voted 'Leave'. I have seen figures which suggest as many as 80% of under 40s with a degree voted remain. However, when it comes to democracy, everyone's vote carries equal weight. Having a degree does not mean their vote is worth more and believing you know more than others does not confer a right to override the decision of the majority. 

The fact these people are persisting in their efforts to undermine the referendum reflects their misplaced sense of superiority and demonstrates how out of touch they are with ordinary people. Whilst purporting to promote liberal values, social mobility and inclusion these clever people hold in contempt the poorer working-class people from the North who despite all the warnings of dire consequences voted leave and refused to bow down to the so-called experts.

For me, a referendum on the final deal is a non-starter. It would undermine the 2016 referendum. If the Brexit vote was about anything, it was about sovereignty and returning power from the EU to our Parliament. Therefore it should be our elected MPs in the Commons who have the last word on the final deal when the negotiations are concluded.

I can accept that these people are not happy with the decision to leave. I can accept they genuinely believe that leaving the EU will be a disaster for our economy and jobs but it seems to me that just as I cannot possibly know how things will turn out after we leave, neither can the may not be so good but also it may work out better than they fear. The most legitimate course in my humble opinion, would be to wait a reasonable time after we actually leave to see how things settle down and how our economy performs and if not happy after say 5 years, THEN start a campaign to rejoin the EU.

Of course, no one can predict the longer term consequences of leaving but so far it has been business as usual but then again we have not yet left. Of course there is no shortage of clever people who 'know' this will be a huge mistake and want to save us from a dire future. They are driven by fear of the unknown and prejudice which is understandable as they probably have more to lose than some other less educated people however for all their further education, in reality, they have no more insight into how things will turn out than the rest of us.

In..Out..Shake It All About..

I really believe that neither side will be served by an final outcome which is half in, half out...that would be the worst outcome for the UK. Many want us to remain as part of a customs union but that would mean we could not independently strike our own trade deals with other countries and therefore severely compromise our freedom as a sovereign country which I think was at the heart of what those voting for leave actually wanted. We therefore need to find a solution which results in independence and the UK becoming free to make our way and, of course, free to make mistakes just as it was before 1974.

At the end of the day, I believe the real division is not between those who voted one way or the other. I believe it is between those who respect democracy and those who persistently refuse to accept the outcome and are doing anything they can to delay, reverse, obstruct and generally undermine. This is not good for our country and for those involved in the negotiations with the EU. It is negative and I strongly believe with just 9 months to go, we need more people to look at the positives which could come out of all this if we approach things with confidence and optimism.

If the final outcome is a UK which is little different from how things were as members of the EU then we will all end up the poorer. Brexit must happen, democracy demands that the wishes of the 17.4 million people is respected...I do not like to think about the consequences if the relatively small but influential group of clever people get their way and we do not get what we voted for.

So, where are you with all this? Did you vote leave or remain? Did you know what you were voting for? Do you accept the outcome or are you not yet reconciled to leave? Have your say in the comments below...we still have freedom of speech, it's a democracy!


  1. Very well said. The constant barrage of scare mongering was tiring pre ref, but still they try. Airbus and BMW being the latest to jump on the project fear bandwagon. I voted Leave, but thought we could maybe have a bespoke deal with the EU (after all, all deals are bespoke). But with their display of utter contempt for a friendly allied nation exercising their democratic right to leave their club, I now would prefer to see a full hard Brexit.

    And you know what, if we have a full fat Brexit and it all goes tits up, well so be it, we took the risk, and we made the mistake, and I truly think the risk is greater staying the the EU. Respecting the democratic process outweighs a couple of % points GDP, although you would think some Remainers would sell their grannies for a 0.1% growth forecast upgrade from the divine EU.

  2. A nice summary of the shitstorm that Brexit has become. As a teacher I am mainly concerned about there being too much focus on the battle of brexit by the media/government/establishment and not enough focus on the run down of our healthcare and education systems. These two things just seem to be being ignored whilst everyone focusses on the EU

  3. The small but influential group of clever people who voted to remain were 16.1 m people

    Plus another 1.4 m UK citizens who live in the EU who never got a vote

    Obviously their views don't count because they don't agree with you

    Democracy doesn't "demand" anything from the referendum, you would just prefer to get what you want and shove it down the throat of anyone who would rather stay in the EU

  4. A thoughtful post DIY Investor. I'll steer clear of 'the politics' as much as I can. You only need look at the Monevator comments section to see the carnage that can start.

    I'll focus on one thing in particular that troubles me. That is, I am disappointed that parliament did not vote through the 'Grieve Amendment' or something similar. Not because I want MPs to have a 'meaningful vote' (which I don't think the Amendment was actually giving them). But because I do not trust this Government or, for that matter, any Government to get the details of the legislation right.

    This Government has made continual 'Fur-Cups'. I am genuinely concerned that some 'loony' Brexiter may sneak something into the legislation. Or some 'smart-ass' remainer or the EU may insert a hidden poison pill in any agreement. Parliament is there to represent us. Their day job is to read, draft, review and scrutinise legislation. As well as to be a check on the Government (and previously the King) from running roughshod over the collective interests of us - Parliament is, as they say, supreme.

    I sure as hell want 650 extra sets of eyes reading and combing the exit agreement. Looking out for errors, unintended consequences or potential skulduggery. For MPs to shirk this responsibility is a let down for our country.

  5. While clearly wrong  this is a really good and rational post.
    I voted to remain mainly on an ‘it’s the economy stupid’ basis (probably one of two people in my county) it has to be recognised that is what the country voted for by quite a margin. I admit I was gutted, however, I recognise the irony that I was on holiday in Italy at the time which shows which side of the economy I am on….
    I doubt things will turn out as bad as I fear for the economy but generally I just cannot understand why people think there will be this huge queue to buy from the UK (not sure what as we manufacture little and leaving the EU will potentially damage financial services). Obviously if you point that out you are clearly some form of traitor.
    I can understand the theoretical calls for a second vote, as no one actually put forward a realistic platform as to how we would leave but what would that achieve? More chaos, hate and what if we voted no to a deal??
    Where I think you are missing the point is to my mind, the ‘leave’ politicians are basically a shambles and have not brought forward a coherent vision or plan for what next, two years on and we have government doesn’t really agree how the hell we are actually going to leave!!! It’s like a Brian Rix farce, but for the fact that politicians are messing up people lives and my children’s futures.
    In the end things will probably turn out ok they usually do, but I just see the country being divided forever on this, at some point in ten years or so we will probably vote to re-join on worse terms which will just leave the other half of the country disengaged – and remainers moaning about the price to re-join.

  6. Well said sir.
    Democracy. The end.

  7. 'Democracy. The end.' Interesting turn of phrase from the previous post. Democracy demands an acceptance of the majority decision, but it does not demand an acceptance of the majority opinion. It seems this distinciton is being lost in the desire to silence those who don't agree with the referendum result. We need to be careful here.

  8. I voted "Remain" but I accept that a majority of those who were both permitted to vote and did vote voted "Leave"; thus, our form of Democracy demands that we leave.

    But, what does "Leave" mean? Well, Brexit has been defined to mean Brexit - so very helpful. The real problem is that there was no definition of what was being voted for; it was just a slogan that people imbued with their own very diverse meanings, some of which were influenced by campaigners who, quite simply, lied about the likely economic outcome. Astonishingly, these liars remain in positions of power and influence, attempting to impose their own, extreme, interpretation of "Leave" upon the meaning of Brexit. Instead, they should be in the Tower; they are bad, bad people.

    {Comment: there is world of difference between economic data represented as a probability distribution function derived from a complex, best-effort, model of the economy and a simplistically (and ill)-derived one-off statement written on the side of a bus. I cry for all the people who accepted that lie as the truth.}

    Happily, nothing in our form of Democracy demands that a decision taken by the people cannot be overturned by another decision taken by the people; thus, there can be no reason why, after the meaning of Brexit becomes concrete, and before it is implemented, another vote can or should not be taken to decide whether that concrete meaning is equivalent with what those who previously voted thought they were voting for (or against).

    Thus, I advocate a second vote to accept, or reject, the concrete meaning of "Leave" before it is implemented.

    As things are going at the moment, we seem to be on course to committing the country, and our children, to a narrower, poorer future. There is also the consequential possibility of the dissolution of the UK - NI could well join Eire and Scotland could become independent.

    If we do end up not "leaving" then we need to send high quality people to the EU to help it to sort out its many and varied deficiencies, not stand on the side-lines and laugh when things go wrong or become difficult.

  9. I voted Remain. My huge concern now is the abdication of decision making by Members of Parliament, in effect the end of representative democracy. We are already on a slippery slope to a more authoritarian government by the executive. This blog sums up the current dangers facing all of us much better than I can express myself.

  10. Some people don't care for democracy, sovereignty, the culture they inherited and the freedoms they take for granted. Some do.

  11. Democracy cannot mean that decisions are irreversible. Nevertheless, it does look as though we are going to leave in some way or other. I think we just have to deal with that in a practical way. I am somewhat pessimistic about the economic effects but, in my view, the only worthwhile arguments for Brexit were political, not economic, in any case, and centered around the claim that the EU was undemocratic. Having done the minimum of research myself, I find that questionable. I respect your view and enjoy your blog, and I will continue to do so.

  12. I fear the outcome will be unsatisfactory for all. Interested to observe the initial carnage of a hard Brexit and the disappointment of those that voted for it, however 5-10 years down the road it might be the best choice if we rapidly sign free trade agreements with the USA/China/India and even Russia. Some bold thinking and action required. To limit the initial damage the govt will need to lower corporation tax and give tax relief for tariffs. I would also create an office that deals with EU customs paper work to take the burden off small companies. The other scenario would be to call it off on the condition that we have a bigger say in the EU and do something about freedom of movement to pacify the leave voters. The worst outcome is to leave but have to comply with all the rules without a say, which is where it is heading.

  13. As a further thought - if there are those who think that Brexit will be seriously detrimental to our country, they have a duty to speak out rather than to keep silent. That is also part of what it means to live in a democracy.

  14. Many thanks to all who have shared some thoughts on this. It is such a big subject which affects so many people, it is not surprising there are so many opinions.

    I do not envy the role of the politicians who are trying to find a way through but they say it is an art of the possible. I guess that means sidestepping what may be 'right' and as it's never going to be possible to get the best deal they will compromise on what can actually be achieved.

    Hopefully the government can agree on a common position on the central strategy in the coming week or so and it will be interesting to see what is said in the long awaited white paper which is promised for July.

    I remain optimistic for a reasonable outcome but sincerely hope it does not end up as BRINO or even worse, not leaving at all.

  15. Cant see the problem with the result, Gove, Boris and Rees Mogg all came out with a very coherent plan and strategy to take us out of the EU, all very well explained. I have complete faith, I'm sure they are writing it up now and everything will become much clearer . . . Boris may even put himself under a bulldozer in front of the EU commission, well we can trust what he says cant we . . .

  16. While I said above things will probably be ok in the end…….
    I do still retain my initial gut instinct that it has the potential to be a complete disaster. The only argument that made sense to me was one that said “well so what if we are worse off we will be sovereign” no one had the guts to say that though, same old promise the world.
    A hard Brexit is not credible, it takes years to negotiate trade deals, and we have no negotiators (although I believe some commonwealth countries have offered to help). There is the potential given the other knee jerker that in US we will exit to a world in trade war or slow down. Quite simply, especially after 2008, our economy could not cope with the shock (we are not Germany). We have spent forty years embedded within a trading block and to recommend a knee jerk exit, is just recklessly selling simple soltions. We are not talking 0.1% on GDP, I can remember our pre EU and they weren’t that great! Who will invest in the UK if we don’t have EU access?
    While I do sympathise with the hot potato the politicians have been handed, those who argued for the escapade simply have no coherent plan not even now. They are constantly manoeuvring for political gain, it is blatantly obvious that they will argue when things go badly “well of course had we got our way(s) we would have negotiated a different outcome”.
    What we really could do with is a strong prime minister and strong government, especially moving post Brexit, I see little chance of that, which actually more depressing than Brexit! To my mind there are no politicians of the calibre of Thatcher or Blair, perhaps one will emerge, nor do I see any politician able to heal the wounds in the country partly generated by this.

  17. Just seen the Chief Executive of Renault Nissan on the news, someone else talking sense. I assume Boris will just abuse him rather than put forward a sensible argument that seems the norm now.

  18. Despite being on the remain side myself, I agree with your points a lot; democracy does mean democracy, and we need a dose of optimise and to get on with things as time is running out.

  19. @DIY - good blog post, well done - this is a minefield topic. And I comment hesitantly, in consequence.

    I voted remain and remarked on the day of the referendum result that 'ignorance won'. I think for me one of the reasons why the result is so gutting, is that the Exit campaign was so deceitful/manipulative about facts. As somebody with a numerate, technocratic background, I resent the power of 'gut feel' to trump cold facts.

    So, for instance:
    - the £350m for NHS argument, which was clearly hogwash even after we have paid our divorce payment.
    - no acceptance of owing the EU anything. Whereas we have now accepted that just fulfilling our prior obligations will result in us paying ~£40bn.
    - an argument that the EU and its car-making Germans would make the ensuing trade deal 'the easiest ever'. Because they would, unlike us, behave entirely rationally and with no emotional filter.
    - the dismissal of concrete obstacles/questions (e.g. what happens to air travel? will we need visas to enter the EU-26? what about our universities' research funding?) as scaremongering and Project Fear, but which hindsight has shown were legitimate concerns/questions
    - the argument that we can negotiate advantageous trade agreements with New Zealand, Kenya etc to replace the existing one with the world's largest economy on our doorstep.

    In a General Election, there are rarely bold factually incorrect claims that withstand 'enemy fire'. This is because each side has to publish a manifesto and the leaders of each side know they will be held to account on it if they win.

    In this referendum there was no clear accountability for the Exit campaign, as nobody knew who would lead if Exit won, and many of the claims were made by spinsters who disappeared into the night the morning after. While some of those spinsters are now back at the leadership table, they seem to be using that vantage point simply to rehearse the best 'betrayal' lines when Remainers get to show they were probably right, after all.

    Traducing facts and belittling expertise gave this one-off referendum a particular dynamic that drives a lot of the bitterness/frustration/anger that has resulted since.

  20. I think you make some valid point but are blatantly mistaken with the meaning of the word Democracy. You are confusing one form of democratic decision process, which is the referendum (where every vote have the same weight to use your example), and democracy, which can be direct or indirect. There is a reason that ALL the democratic countries in the world have parliaments: you cannot ask 50 million people to decide for each and every decision (although this is the typical rethoric arguments made by all the populist leaders). Would you say that laws if voted by the Parliament are not democratic ? This is a profound mistake.

    As said earlier by other commenters, why should the Brexit vote be the mother of all decisions, and could not be overturned, by another vote ? or by another form of democratic decision ? In practice, and especially when the consequences of such votes are so complex, uncertains, and consequential, 2/3 or reinforced majorities are sought, to avoid change of opinion which would be impractical (e.g. independence referendums). Referendum without such reinforced majority are (and should, in my opinion) be reserved to "easily" implemented decisions, which could also be reveresed easily (death row punishment, signing a treaty, give x right to some collective body - women right to vote). To me that was a terrible mistake in the organisation of this referendum by Cameron, but it is obviously a death kiss also, as, of course, using the exact same arguments that you are trying to advance, there is no reason in the world (save for organization purposes) of why there could not be one referendum every semester about Brexit, and above all, about the "deal", since (as someone you very well know said) "the very essence of our democracy is that we accept the decision of the majority."

  21. I was undecided pretty much up to the day of voting - both camps had pros and cons.

    It was Juncker telling Cameron there would be no negotiations which pushed me to vote Leave.

    I'm against a second referendum - you can't keep voting until you get the result you want...

    Yes, it's a big shitstorm, it might even mess up my own financial plans in the future but we live in interesting times.