Brexit clearly caught financial markets on the hop. With opinion polls, betting odds and the “conventional wisdom” all pointing in one direction, the vast weight of money thought the UK would stay in the European Union.
That’s why, when reality hit in the small hours of Friday morning, the pound plunged violently, enduring its biggest one-day drop in living memory. And when the London stock market opened later, the FTSE-100 dropped a stomach-churning 8.7pc – again, showing the extent to which traders had previously backed Remain.
What was striking, though, was how quickly the markets bounced back after the initial shock. Shares ended the day down a relatively unremarkable 1.9pc. Sterling also pegged back, as the Bank of England, for weeks central to “Project Fear”, switched back to “Project Reassure”.
It also became clear, despite weeks of “morning after Brexit” scaremongering, that for some time this Leave vote changes little. The UK won’t invoke Article 50, sparking the 2-year exit-negotiation process, until October at the earliest. And, before that, what with an impending Conservative leadership contest and Labour’s dramatic implosion, there’s an awful lot of domestic politics to resolve before the UK’s leaders – whoever they turn out to be – fully engage in the task of unpicking our 43-year relationship with the EU.
That political reaction has, so far, been unedifying. David Cameron’s laudably dignified resignation speech quickly gave way to a determination among his supporters that the battle for the Tory crown is even nastier than the referendum. A “Stop Boris” unit, it appears, is compiling a “revenge dossier” on the private life of the Former London Mayor and lead Brexit campaigner, with the sole intention of blocking his path to Number Ten.
Labour, meanwhile, has gone into self-destruct mode with even more abandon, as party high-ups scramble to avoid blame for a collective failure to recognize the most basic concerns of millions of traditional Labour voters – concerns which ultimately tipped the national balance in last week’s historic vote to Leave.
Most disgraceful, though, has been the response of numerous Remain supporters who are now attempting – from a combination of anger, pique and an extremely over-developed sense of their own entitlement – to reverse this vote. All weekend, on the airwaves and across social media, the “referendum re-run” drums have been beating. No sooner had 17.5 million voters secured a clear victory in a hard-fought but ultimately fair referendum than self-appointed arbiters of the national mood were dismissing them as “ill-informed” and “manipulated” in a bid to justify another vote.
Demands by bitter MPs that Parliament overturn this “advisory” referendum are extremely dangerous. Look-at-me virtue-signaling petitions undermining a decisive democratic outcome are nothing short of incendiary. And to argue that older voters who backed Brexit “should count for less” is, quite frankly, beyond the pale. What next – an upper age-limit on voting? And how about the notion, recognized since time immemorial as a mark of civilized human behavior, that far from dissing the views and experience of older people, we pay them particular attention?
Should a referendum outcome be scrapped because it was driven in part by people who work with their hands for a living? Who live in the East Midlands rather than Richmond-upon-Thames? Who shop at Lidl rather than Waitrose? Who eat “dinner” or (heaven forbid!) “tea” at night rather than “supper”?
The sniffy, condescending and downright aggressive reaction to this referendum on the part of many among the highly-educated and privileged has revealed, once again, that those priding themselves as “tolerant” and “liberal” are often anything but. Britain has done well over recent years, in tackling homophobia, racism and other forms of prejudice. We still have a very long way to go when it comes to good old-fashioned de haut en bas class contempt.
The reality is that this courageous Brexit vote, for all the doubts and tensions it raises, represents a precious and important opportunity for the UK to shape not only our own future, but influence the direction of Europe. Far from leaving the UK at the mercy of other EU nations and assorted eurocrats, it’s already clear that, beyond the political point-scoring, there is much appetite to do deals with a Brexited Britain.
There is “no need to be nasty” in negotiations with the UK, said German Chancellor Angela Merkel over the weekend, adding she is “not in favour” of a speedy UK withdrawal. “We want a good, objective atmosphere,” said Europe’s most powerful politician. “It’s important we work together to get the right outcome”.
The “right outcome”, of course, is one keeping UK markets open for French wineries, Italian furniture-makers and German car producers. Britain’s trade deficit in goods with the EU – which surged to a record £24bn during the three months to April – represents hundreds of thousands of continental jobs and billions of euros profit. Even before our Brexit vote, the main German employers’ organization was publicly calling for trade with the UK to “remain free”. Of course it was, because that’s what makes commercial sense for both sides. So forget the bluster of pompous officials like European Commission President Jean-Claude Juncker and other assorted Brussels non-entities. Merkel holds the power. And Merkel knows that trading openly with Britain brings home Europe’s bacon.
Brexit gives us the chance to spread our trading wings way beyond Europe, rediscovering – almost a half century since we last cut a bilateral trade deal – the UK’s inherent genius for buying and selling. For all our mercantile heritage, we currently trade less trade with the big four emerging markets – Brazil, India, Russia and China – than with Belgium. This is ridiculous. The UK desperately needs to turn far more diplomatic and commercial attention to the world’s fast-growing markets, trading with the EU of course, but recognizing our future prosperity depends on vastly expanded trade with the emerging giants.
For now, membership of the European Economic Area, a Norwegian-style deal, is a useful and available stopgap solution. Be in no doubt, though, given our large economy and display of electoral resolve, the UK has considerable bargaining power. Brexit is galvanizing voters across the EU, and could well provoke, before our Article 50 negotiations are over, several copycat referenda. It is the “European Project”, rather than the UK, which is now on the back foot.