Could another referendum reverse the Brexit vote?

Rachel Lurie, Ashoka Mody 22 August 2018

David Holt/flickr

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On 23 June 2016, the British public voted by a 52-48% margin for the UK to end its membership of the EU. Although the initial estimates of the costs of leaving the EU have been greatly scaled down, the clamour has recently increased for another referendum in the hope of reversing the Brexit decision. Could there be a new referendum? If so, could Britain decide to stay in the EU, after all? 

The real Brexit message was only peripherally related to Britain’s relationship with the EU. Rather, unable to make their voices heard amidst multiple issues in national elections, anxious British citizens called attention to the economic and geographical traps they have been stuck in. Specifically, they called on policymakers to create more opportunity for upward mobility and deliver a fairer future. These long-standing frustrations will remain prominent in a new Brexit vote, which even if reversed will be a very close call.

The root cause of the Brexit vote

A popular view is that British citizens favoured Brexit because they were swayed by misplaced nationalism and base xenophobia. Most academic studies, however, find that the root cause of the Brexit vote was economic grievance: economically distressed regions had higher ‘Leave’ shares, and people under financial stress were more likely to vote for Brexit. Studies show that when people are economically marginalised and see their social standing slipping away, they are likely to identify with nationalistic and xenophobic ideas and seek solutions for their grievances outside of the political mainstream.

Our research helps pinpoint the source of economic anxiety that led to the Brexit vote.  Many parents who voted to leave had good reason to fear that their adverse economic conditions would also severely handicap their children. Many children were also influenced by their lack of economic opportunities. The children did not vote to leave; instead, they did not vote at all – a decision that turned out to be an important cause of the Brexit outcome. The decision by the young to abstain, just as much as the decision by older citizens to Leave, was an expression of political alienation driven by economic pessimism.

Our findings emphasise that more so than inequality, lack of upward mobility creates deep anxiety. Wealth and status are inevitably distributed unevenly across a population. But parents and children are doubly aggrieved if economic deprivation is handed down from one generation to another.  

A rust-belt trap on parents

As is well established, children with lower-income and lower professional status parents start life with a handicap in education and work experience. In addition, children brought up in dilapidated and failing neighbourhoods struggle to climb up the income ladder. 

In Britain, we find that neighbourhoods with ‘rust-belt’ features are particularly hard on children’s prospects. Such areas have a large share of employment in manufacturing, low college achievement, and significant geographical isolation (commuting distances of individuals in the region are relatively short). These are areas where, in former Prime Minister Gordon Brown’s words, British manufacturing, unable to face Asian competition, has “collapsed,” and industrial towns have “hollowed out,” leaving semi-skilled workers “on the wrong side of globalisation”. Parents in such areas worry not only about themselves but also about their children’s futures.

Areas with greater rust-belt features had distinctly higher shares of people voting Leave (Figure I). Reporting in heavily rust-belt areas, such as the West Midlands and the North East, confirms that residents suffered from deep-rooted economic frustration over a loss of industrial jobs. Encouraged by the Leave campaign, rust-belt voters blamed their hardships on the US and on the London-based political establishment.

 

Urban traps have bred political withdrawal

The choice not to vote was just as important in determining the Brexit outcome as the choice to vote Leave. Low voter turnout was a particularly salient in regions that suffer from ‘urban dysfunctions’ (Figure II). These are typically urban areas with high secondary school dropout rates, high unemployment, extreme geographical isolation, and broken families.  

Voter turnout data show that low-income youth drove low turnout rates – the lowest turnout rates nationally were among those aged 18-34, and among young people, those who were low-income voted the least. Such non-voters lived in urban areas with relatively long spells of unemployment and limited hope of making progress. While the national average turnout rate was 72.2%, turnout rates varied within Greater London from 65% in Hackney, where large pockets of deep poverty and alienation persist, to 79% in the affluent Kingston upon Thames borough.   

Since among those who did vote, young voters more often favoured to remain than older voters did, many have portrayed the Brexit vote as reflecting a ‘generational divide’. This characterisation implies that the preferences of those who did and did not vote were the same.  However, the young living in the depressed parts of Hackney have little in common with those living and working in the financial districts of London. The non-vote of the young trapped in the grim areas of Greater London and other similar urban neighbourhoods was as much a sign of hopelessness as the exit vote of older rust-belt citizens. Such non-voters could well have voted to Leave.

Could the Brexit decision be reversed?

Geographical traps of low upward mobility become deeply entrenched. Once regions fall behind, catching up becomes ever harder. Those who can afford to move from the lagging regions do so. Those who stay behind are left with fewer communal resources and often lower-quality schools, a crucial factor that can limit upward mobility. 

In the Brexit referendum, UK citizens were pleading through their vote – and non-vote - for a fair shot at the future. They were calling on British leaders to revitalise decaying industrial areas and bring hope to the failing urban communities in which they were trapped. 

Prime Minister Theresa May seemed to get it when, in her speech to the Conservative Party in October 2016, she promised “a country that works for everyone”. But amid frenzied Brexit discussions, May’s government continued the fiscal austerity of previous Conservative governments. And austerity inflicts hurt on the very same people who voted for Brexit. While to some British voters the potential cost of Brexit may now loom larger, inside the voting booth, deep-seated grievances will sway large sections of voters. Those who hope for a Brexit reversal may be disappointed. 

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Topics:  Europe's nations and regions Politics and economics Poverty and income inequality

Tags:  Brexit, rust-belt, EU referendum, Inequality

Analyst, Princeton University Investment Company

Visiting Professor in International Economic Policy at the Woodrow Wilson School, Princeton University. Author of EuroTragedy: A Drama in Nine Acts

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