Gideon Rachman: Elites wrong. Brexit is real. UK fast heading for EU exit.

Ian Goldin, a South African professor at Oxford University, describes what the world is now going through as the Second Renaissance. His book on the subject, due in the next couple months, is sure to help reshape opinion. Because, for the moment, far too many political predictions, business plans and investment strategies are still built on assumptions of a status quo that has departed. The rise of Donald Trump, viewed by Washington’s establishment as an ignorant windbag, reflects some of this new reality. Even the bookmakers dismissed the brash billionaire’s chances of becoming the next US President. But those 100/1 odds are long gone. Similarly the UK’s seemingly unthinkable departure from the European Union. As Financial Times columnist Gideon Rachman explains in this excellent contribution, like with Trump the establishment is under-estimating seismic shifts in public opinion, especially against immigration and open borders. Again as per Trump, the useful lead enjoyed by “Leavers” cannot be dismissed as a temporary aberration. There is no certainty that voters will “come to their senses.”  – Alec Hogg

Brexit cartoon

By Gideon Rachman*

The British debate about Brexit, at the moment, reminds me of the discussions I heard in the US, late last year, about Donald Trump. Back then the opinion polls said that Mr Trump was well ahead in the race. But the conventional wisdom in Washington was that he would never win the Republican presidential nomination. Everybody told me that, once voters focused on the race, Mr Trump’s lead would crumble.

In Britain today, there is a similar unwillingness among mainstream political analysts to believe the warning signs from the opinion polls. Several recent polls have shown small majorities in favour of the UK leaving Europe when the country holds its referendum on June 23. But most political pundits I speak to still think it is pretty unlikely that Britain will really vote to leave. When it comes to both Mr Trump and Brexit, the political establishments in Washington and London find it hard to believe the public will ultimately make a choice that the establishment regards as self-evidently stupid.

British Union Jack flags are seen on the desks of members of the European parliament during a debate at the European Parliament in Strasbourg, France, March 8, 2016. REUTERS/Vincent Kessler
British Union Jack flags are seen on the desks of members of the European parliament during a debate at the European Parliament in Strasbourg, France, March 8, 2016. REUTERS/Vincent Kessler

However in Britain, as in the US, politics has taken a populist and unpredictable turn. The financial crisis and its aftermath have undermined faith in the judgment of elites. High levels of immigration and fear of terrorism have increased the temptation to try and pull up the drawbridge and retreat behind national frontiers.

Britain’s Leave campaign will put immigration and border controls at the centre of its campaign – and that could be a winning tactic. The polls suggest the public is overwhelmingly sympathetic to the idea that Britain needs to restrict immigration. Prime Minister David Cameron’s attempted renegotiation of the terms of Britain’s membership of the EU was unable to deliver much on this score. The principle of free movement of labour within the EU remains untouched – and the Leave campaign will make sure every voter knows that.

Read also: Boris Johnson hits Pound, joins Brexit so Britons can “take back control”

Unfortunately, the coalition that was meant to drive the Remain campaign is failing to come together. Pro-Europeans always assumed they would be able to rely on the support of the oppositionLabour party, the Liberal Democrats, the mainstream of the Conservative party and most of British business. But the Labour party is now led by Jeremy Corbyn, a closet Brexiteer who will not lift a finger to rally his party behind the pro-EU cause. The Liberal Democrats were virtually wiped out at last year’s general election. And civil war has broken out among the Tories, with several leading figures joining the Leave campaign.

Meanwhile big business is being much less vocal than the Remain camp had hoped. A pro-EU letter was signed by just over one-third of the heads of the FTSE 100 – most hung back, either out of conviction or for fear of antagonising shareholders or customers. The City of London is largely in favour of staying inside the EU. But, in the current climate, the support of Goldman Sachs is not necessarily a plus.

The Leave campaign also has the advantage of simple slogans that are easy to understand: control our borders, make our own laws, get our money back from Brussels. The Remain campaign’s responses to these demands, by contrast, are complicated. They point out that, if Britain wants to retain full access to the EU single market, it will almost certainly have to accept free movement of people as the price of entry, along with single-market regulations. They explain that, while Britain’s contribution to the EU budget sounds like a big number, it is actually a very small part of overall government spending.

Read also: EU’s next challenge: Avoiding seismic “Brexit”. Here’s how to keep UK in.

These are intellectually solid arguments. But they are also unhelpfully convoluted. And in politics, as the saying goes: “If you are explaining, you are losing.” Ominously, early focus groups suggest that, when undecided voters are exposed to the arguments of both sides of the debate, they are more likely to move towards a vote to leave. The polls also show that anti-EU voters are more likely to vote than the pro-EU camp. Meanwhile, Europe is looking like an increasingly tough sell, what with the euro crisis and the refugee one.

Faced with these problems, the Remain campaign is left relying to an unnerving extent on the authority of the prime minister. Two general election victories suggest Mr Cameron is a formidable campaigner. But he cannot do it alone. With business and the other political parties so far disappointing, he may have to look abroad for support.

The news that President Barack Obama will visit the UK next month and is likely to endorse the campaign to keep Britain inside the EU has provoked fury from the Vote Leave campaign. Their outrage is telling. The US president is still a popular figure in much of the UK.

What is more, the Leave campaign has always argued there is a big world beyond Europe that is just waiting to embrace Britain once it leaves the EU. Nobody is better placed than the US president to gently puncture that idea. In the weeks following his visit, Downing Street should encourage other foreign leaders – from Beijing to Vatican City – to make their hostility to Brexit known.

Many foreign leaders will hesitate to intervene in an internal British debate. Some may have been lulled into believing Brexit is highly unlikely, anyway. Like the British political elite, they need to be disabused of that comforting notion – and fast.

  • Gideon Rachman is a the leading columnists at the Financial Times of London. You can follow him on Twitter at [email protected]

(c) 2016 The Financial Times Ltd.