{"id":2227,"date":"2019-01-18T08:00:52","date_gmt":"2019-01-18T08:00:52","guid":{"rendered":"https:\/\/politicalquarterlyblog.preliveweb.site\/?p=2227"},"modified":"2022-06-17T17:02:32","modified_gmt":"2022-06-17T17:02:32","slug":"brexit-and-the-future-of-the-british-model-of-democratic-capitalism","status":"publish","type":"post","link":"https:\/\/politicalquarterlyblog.preliveweb.site\/?p=2227","title":{"rendered":"Brexit and the future of the British model of democratic capitalism"},"content":{"rendered":"\n

British politics is regularly said to be at a critical juncture. With Brexit, for once this is not hyperbole. It represents the most significant moment of political choice and potential rupture since the Second World War, and in peacetime, possibly since the repeal of the Corn Laws in the nineteenth century. <\/p>\n\n\n\n

For\nfour decades, membership of the European Union (EU) and its predecessors has shaped\nthe evolution of Britain\u2019s model of democratic capitalism. It has anchored the\nUK\u2019s economic policy framework, governed the UK\u2019s trade, restructured British\nmanufacturing and its supply chains and helped attract foreign direct\ninvestment into the country. The City of London has been transformed since the\n1970s to serve EU as well as global markets. European companies now supply many\nof Britain\u2019s utility needs, from energy to rail and bus transport. EU\nmembership is even built into our hard infrastructure, most obviously through\nthe Channel Tunnel. The supply of migrant labour from the EU, particularly\nsince 2004, has greatly altered the UK\u2019s workforce, transforming a number of\nsectors like retail, hospitality, care and food processing. Other industries like\nagriculture and fisheries have been fundamentally reshaped by common EU policies.<\/p>\n\n\n\n

The\nimpact of the EU extends far beyond economics, however. British society has a\ndifferent make-up and look and feel due to EU membership. The population, and\nthe places in which it lives and works, has become more European. Several generations\u2019\nhorizons, sense of mobility and travel patterns have been greatly broadened. Social\nand environmental policies, from annual holiday rights to clean beaches, have\nrested on EU initiatives. The UK\u2019s place in the world and foreign policy has\nbeen moulded and moderated by our membership. Our legal system, and the very\nform of statecraft pursued by the British state, has been transformed. It is no\nexaggeration to say that the European project has re-made us. <\/p>\n\n\n\n

Yet\nto present this simply as a story of disruption and transformation would be to mislead.\nThere are deep continuities too. There is a UK \u2018pre-history\u2019 to EU membership\nthat has also endured, not least in our political economy, much of which is\nrooted in the Victorian era. The UK is a liberal market economy with a global\nfinancial sector, deregulated labour market, shareholder dominated corporate\ngovernance, and an education system with a strong bias against vocational\nskills in favour of generic ones. Entry to the \u2018Common Market\u2019 in 1973 helped\ncement the structures of this British liberal market economy, rather than fundamentally\nreforming it along coordinated or social market European lines. The UK did not\nleave its economic past behind when it joined the European project.<\/p>\n\n\n\n

The role of the state in the economy was significantly reduced as well as reformed in the 1980s<\/a>, and the postwar growth model of an export-orientated national economy with significant domestic manufacturing, energy and food production was progressively dismantled. But the underlying institutions of the UK liberal market economy remained in large part intact throughout these transformations. They evolved in tandem with a political system dominated by two main parties and a liberal welfare regime of mostly flat rate benefits and significant means-testing, rather than the multi-party politics of proportional voting systems, and social insurance or universalist models of welfare found in Northern Europe.<\/a><\/p>\n\n\n\n

As\nit entered the new millennium, the UK was an open, financialised economy,\ndeeply integrated into European markets, with a growth model underpinned by consumption\nand an oversized housing sector. High value service exports and foreign direct\ninvestment helped to offset a persistent deficit in manufactured goods. To be\nsure, this growth model had formidable strengths: competitive advantages in\nknowledge-based sectors; a buoyant labour market, drawing in highly skilled\nmigrants; and productivity gains driven by leading edge service companies and\nworld class universities and research. But these were matched by chronic failings:\nweak investment; entrenched inequalities between people, places and\ngenerations; a dystopian housing market; and rampant insecurity in segments of\nthe jobs market, among others. <\/p>\n\n\n\n

When\nthe UK was battered by the financial crisis in 2008, it exposed economic fault-lines\nthat had been obscured by the long era of benign growth in the 1990s and 2000s.\nThey became even more visible, and acquired greater public consciousness, following\nthe Brexit referendum. Despite the gains made before the crisis, levels of UK\nproductivity remained comparatively low and, remarkably, have now barely improved\nfor a decade. Real wages are still significantly below pre-crisis levels. And\nlongstanding inequalities of income and wealth, between both the regions of the\nUK and its social classes, show little sign of diminishing. As a nation, the UK\ncontinues to rely, in the words of the governor of the Bank of England, on \u2018the\nkindness of strangers\u2019 to pay its way in the world. <\/p>\n\n\n\n

A\nnew and darker global context also overshadows the withdrawal of the UK from\nthe EU. The protectionist, America First agenda of Donald Trump reverses\nseventy years of US commitment to an integrated Europe and has already\nengendered geo-political division over tariffs, the role of NATO, and the EU\u2019s\nrelationships with Russia and Iran. In tandem with this we\u2019ve witnessed the\nrise of nationalist and neo-fascist parties, both within the EU and outside it,\nwho share a common hostility to internationalism at a time when the looming\ncrisis of climate breakdown demands urgent global action. Brexit arises at a\nmoment when the postwar institutions of the international community are under\nhuge stress.  <\/p>\n\n\n\n

At\nthe level of domestic policymaking, withdrawal from the EU presents a series of\ndiscrete challenges, such as how to handle a range of repatriated powers. Each policy\narea is important. But if our analysis is narrow, focussing on a set of single\nissues, we risk missing the bigger shifts. Hence, in this book, we address\nBrexit in the context of the impending challenges of the 2020s and beyond. We\nsituate the question of leaving the EU and what it could mean in the larger\nsweep of the outlook for democratic welfare capitalism in the UK. The leading contributors\nto this special volume range widely across politics, economics, social policy\nand democratic and constitutional reform, while the book as a whole seeks to\nconnect the domestic situation of the UK with its external position, both\neconomic and geo-political. <\/p>\n\n\n\n

At\nthe time of writing (January 2019), the politics of Brexit remain radically uncertain.\nA number of scenarios\u2014Theresa May\u2019s proposed deal, leaving the EU without a\ndeal, a soft Brexit, an agreed extension of the Article 50 process, or a second\nreferendum with the option of remaining in the EU\u2014are all still possible. For\nthe most part, the contributions to this book are predicated on some form of\nwithdrawal from the EU taking place in the years ahead. But beyond that, the\nscope for analysis and interpretation remains very wide, and the chapters\nconsequently contain diverse perspectives on what has caused the Brexit rupture\nin British politics, and what its consequences might be.<\/p>\n\n\n\n

The\npolitical causes of Brexit<\/strong><\/h4>\n\n\n\n

To make sense of the vote\nto leave the EU, we need to unpack both the moment in history in which it\noccurred, as well as the coalitions who supported it. The timing of the vote\nwas inauspicious from a Remain perspective. Not only did it take place amid the\nworst decade of pay growth since the Napoleonic wars, the deepest austerity in\nmodern times and in the shadow of the eurozone crisis. It also occurred when\nbroadly eurosceptic baby boomers were at their electoral peak, while the more pro-European\n\u2018silent generation\u2019 of the war years was in steady decline, and their younger\nmore Remain-minded cohorts were yet to reach their full electoral potency.\nEconomically, as well as electorally, it represented a truly reckless moment\nfor a Remain-supporting Prime Minister to seek to settle the European question.<\/p>\n\n\n\n

But whatever the timing, the referendum fundamentally pivoted around the creation of an alliance of older, conservative middle class voters and the semi-skilled and unskilled working class\u2014a combination of what David Willetts has called \u2018the insulated and the excluded\u2019.<\/a>[<\/a>Political discourse about the referendum has been dominated by the plight of so-called \u2018left behind\u2019 voters. Yet in reality, older, relatively prosperous voters were just as significant in number, reflecting the UK\u2019s marked inequalities in voter turnout by age. The referendum result, therefore, represented a reckoning with places that have never recovered from the shock of de-industrialisation and Thatcherism, as well as groups who have not been reconciled to the ascendance of ever greater social liberalism and the cosmopolitan remaking of Britain, or the European remaking of the British state.<\/p>\n\n\n\n

For\nthose reasons, the outcome of the vote is difficult to explain in terms of the\ndominant political economic interests in the productive economy. The City of\nLondon, the major business organisations and the trade unions all supported\nRemain, as did the main political parties. The Leave vote disproportionately came\nfrom interests outside the labour market\u2014older voters with a foundation of\nhousing and pension wealth, or the state pension and pensioner benefits\u2014and\nthose struggling precariously within it, like the low skilled and\nself-employed. Its campaign was led by a political and economic elite\u2014even if\nit was an unconventional one, drawn from beyond the organised pillars of the\neconomy\u2014but it successfully channelled an eruption of politics against the\nestablished political economy. It shook to its core the world-view that the big\ncontours of the UK\u2019s economic policy were firmly set and resided outside the\nreach of democratic contest. And it forced attention\u2014if not public policy\u2014upon an\neconomic trajectory that had so unevenly distributed the gains of growth over\nthe last four decades.  <\/p>\n\n\n\n

Other\ndrivers of the referendum vote are perhaps easier to grasp. The young and\nmiddle aged, and the better educated, were far more inclined to vote Remain. These\nare the social groups most comfortable with immigration and the diversity of\nmodern Britain. The geography of the referendum reflected this, pitting most of\nthe major urban centres and university cities against the towns, countryside\nand coastlines. Majorities in Scotland and Northern Ireland voted Remain, while\nmost of England and Wales opted to Leave. This political geography is new: in\n1975, none of the UK\u2019s constituent nations voted \u2018No\u2019 to EEC membership, and\nEngland and Wales recorded the largest supporting majorities. <\/p>\n\n\n\n

While\nthese headline territorial patterns are striking, consideration needs to be\ngiven to differences within regions and how they interact with the effects of\nage. Look, for instance, at retired voters in a strongly \u2018Remain\u2019 region like\nLondon and we see that they backed Leave in similar proportions to the retired\nof Yorkshire, the north-west or Wales. Equally, if we just consider those in\nwork we see that Remain won in more nations and regions of the UK than Leave.\nBrexit has certainly fractured the electorate in important ways, but it is a far\nmore complicated picture than London, Scotland and Northern Ireland versus the\nrest of England and Wales. <\/p>\n\n\n\n

The\nBrexit juncture comes in a new era of UK politics. It marks the first real\ncrisis of politics in the post-devolution era in which the UK has become formed\nas a multi-national state, not just in terms of its governance, but in its\nidentity too. Formal decisions concerning Brexit reside with the Westminster Parliament,\nbut the consequences ripple across the UK\u2019s nations and their assemblies,\nparliaments and civil societies. The European question has layered another deep\ncleavage onto the already fractious territorial politics of the union.<\/p>\n\n\n\n

The\nconsequences of Brexit: political economy<\/strong><\/h4>\n\n\n\n

Over the last forty\nyears, Britain has sought consistently to entrench its liberal market model\nwithin the EU, pursuing the creation and completion of the single market, while\n(for the most part) resisting Delorsian ambitions to embed European capitalism\nin a pan-European social democracy. Its period of membership may have often\nbeen grudging, but it has also been consequential. The decision to leave the\nEuropean project can therefore be expected to alter the future trajectory of\nthe EU. But what might it mean for the future political economy of the UK? Will\nit essentially be a story of continuity or should we see dislocation? Will it\nbe the same but worse, or is this the start of something very different?<\/p>\n\n\n\n

When\nit comes to the UK\u2019s growth model, it is hard to see where a significant re-orientation\nwill come from. The major devaluations of sterling over recent years (one\nfollowing the 2008 crisis, the other after the Brexit vote) have not spurred export\ngrowth but have reduced real wages. If nothing else, they have exposed the contemporary\nhollowness of the age-old hope that a weaker currency will prove to be an elixir\nfor British manufacturing. A surge in export-led growth in the years ahead seems\nhighly unlikely: if the UK ends up outside the single market and customs union,\nthere will inevitably be new frictions in trade with Britain\u2019s biggest market, while\nany new trade deals with other countries will be time consuming, involve sharp trade-offs\nand are likely to generate only negligible gains in GDP compared to the\nexpected losses arising from diminished access to the EU. Financial services,\non which the UK relies heavily for export performance, are likely to shift a\nsignificant proportion of business to the EU. Gravity is not so easy to defy. <\/p>\n\n\n\n

A new era of wage-driven growth feels unrealistic too. Even now, at a mature stage of the economic cycle and in the face of a tight jobs market, pay rises remain anaemic by postwar standards. Without a turnaround in productivity, wage growth will remain weak, as will household income growth, all of which is a major constraint on the consumption-led UK growth model.<\/a>[<\/a> Business investment, too, is not well placed to come to the rescue. The UK\u2019s long-running problem of weak investment has, if anything, intensified in the post-crisis era and now Brexit uncertainty represents a major additional drag on business sentiment. Public investment is increasing substantially, but not at a rate sufficient to transform the overall outlook. <\/p>\n\n\n\n

The\nengines of demand in the UK economy have been slow to recover since the\nfinancial crisis and have been further weakened by the prospect of Brexit. This\nwill place more strain on macro-economic policy. It is unlikely the UK will return\nto anything like \u2018normal\u2019 monetary policy in the immediate future. Fiscal pressures\nare set to ease relative to the deep austerity of recent years, but this is only\nlikely to mean that spending keeps up with inflation rather than recovering any\nof the ground lost after 2010. And history suggests that before too long\u2014even\nleaving aside any disruptive shocks\u2014we should anticipate another recession or\nslow-down. A new phase of policy activism may well be needed before the last\nphase has been wound down. <\/p>\n\n\n\n

Brexit\nand the welfare state<\/strong><\/h4>\n\n\n\n

Between 1997 and 2010,\nNew Labour pursued a social investment strategy: fleshing out the UK\u2019s liberal\nwelfare state with new spending on tax credits, childcare, investment in\neducation and skills, and a major expansion of higher education. Poverty fell,\ninequality levelled off and income mobility rose. These were major social achievements,\nthough for many post-industrial towns and cities, they never amounted to the\ncreation of a viable new economic future. What appeared for a while to be a\ndurable electoral coalition of the working class and middle class\nsocio-cultural professionals underpinned this policy shift, but has since\nfragmented.<\/p>\n\n\n\n

This period of growth in our welfare state was followed by sharp retrenchment after 2010, with deep cuts in support for those of working age and a pronounced reshaping of spending in favour of pensioners. By the time the Brexit referendum took place in 2016, public opinion had already begun to turn against further cuts to social security\u2014a trend that is likely to continue in the years ahead\u2014rendering the politics of \u2018welfare savings\u2019 ever more intractable.<\/a>[<\/a><\/p>\n\n\n\n

The\nfiscal pressures on the welfare state will only grow. All ageing societies like\nthe UK face significant challenges financing their welfare states, particularly\nbecause of rising health, social care and pension costs. This shrinks the space\nfor fiscal generosity and sharpens trade-offs between the welfare preferences\nof different sections of the electorate. The UK has already aggressively\npursued the \u2018orthodox\u2019 repertoire of strategies for mitigating long-term fiscal\npressures of ageing on the welfare state: migration has grown, the employment\nrate is at a record high, punitive working-age welfare conditionality has been imposed,\nand the state pension age has been hiked. On each score the limits have been\nreached. <\/p>\n\n\n\n

Any\nversion of Brexit will serve to intensify these fiscal constraints, not only\nbecause of the damage done to tax revenues, but also because of additional\npressures on spending. Since the referendum, there have been repeated calls from\nacross the spectrum for increased spending to respond to the popular demand for\nchange, and shore up Britain\u2019s domestic and international frailties: we\u2019ve seen\nthis on issues ranging from industrial and regional policy, to training,\nhousing, farming and defence. There is little sign that Brexit points towards a\nsmaller state.<\/p>\n\n\n\n

All\ntold, the Brexit penumbra will make the already difficult politics of moving to\na sustainable twenty-first century welfare settlement far harder. The postwar\nwelfare expansion was funded on the back of major switches in spending\npriorities, historic broadening of the tax base and a prolonged era of\nproductivity growth. Any post-Brexit welfare adjustment will have to put more\nof the strain onto higher taxes. <\/p>\n\n\n\n

There will, however, be clear limits to the tax rises that a wage-squeezed public will bear. Ultimately, the future of the welfare state\u2014and the social contact that depends on it\u2014will require a rekindling of productivity growth. If our liberal market economy cannot achieve this, then political pressure will grow for the state to pursue far more dirigiste<\/em> strategies. These will have to encompass the \u2018everyday\u2019 or \u2018foundational\u2019 economy of private sector and publicly procured low wage service jobs in which millions of British workers are employed, not just the leading edge of high valued export sectors that industrial strategy typically embraces<\/a>.[<\/a><\/p>\n\n\n\n

Politics\nafter Brexit <\/strong><\/h4>\n\n\n\n

The marked age divide in\nBritish politics that has emerged in recent decades acted as a midwife to the Brexit\nvote and was consolidated at the 2017 general election. Age has not ended the\nimportance of social class, nor have voters\u2019 \u2018values\u2019 become somehow detached\nfrom any relation to their material circumstances or the wider institutions of\nthe economy. But it is certainly true that navigating the demographic schism has\nbecome the sine qua non<\/em> of political\nmanagement in the UK. <\/p>\n\n\n\n

If\nthe Brexit cleavage remains central to British politics in the decades ahead\u2014and\n\u2018Remain\u2019 vs<\/em> \u2018Leave\u2019 become entrenched\nin the long-term political identities of large swathes of the electorate\u2014this\nwill only serve to magnify existing intergenerational tensions. Political\nparties seeking paths to electoral majorities will need strategies\u2014including\npublic policies for tax and spend, and social cohesion\u2014that can plausibly\novercome or at least ameliorate these divisions and command cross-generational\nsupport.<\/p>\n\n\n\n

Population change will, of course, alter the make-up of the electorate over the long run. But recent experience from the UK, EU and US politics shows that demographic destinies can take a long time to arrive: in the meantime, politics can be contingently and rapidly reshaped as parties re-orient their strategies to meet electoral demands made by \u2018declining\u2019 or marginalised social groups<\/a>.[<\/a><\/p>\n\n\n\n

The\nplaying out of the shift towards increased ethnic diversity will remain a\nfeature of British society and its politics. On the one hand, public opinion since\nthe referendum shows a marked weakening of hostility to immigration. And, more\ngenerally, Britain remains a relatively cohesive society compared to some\nEuropean counterparts. However, levels of inward migration are likely to remain\nhigh in the future, albeit rebalanced away from the EU to the rest of the world\nbecause of the probable curtailment of free movement. And experience in much of\nthe rest of Europe shows that discontent about migrants (and refugees) can\nquickly be channelled into support for far-right and nativist parties. Britain\u2019s\nmajoritarian electoral system has insulated but not inoculated it from these\nstrains of politics. One of the biggest questions of post-Brexit politics is\nwhether this remains the case.<\/p>\n\n\n\n

Just\nas demography will remain a defining divide in post-Brexit politics, so too\nwill territorial politics. One of the paradoxes of recent years is that the post-1998\ninstitutions\u2014the Good Friday Agreement and 1998 Scotland Act\u2014have at a deep level\nshaped our constitution. Yet, surface level political debate (if not the substantive\nnature of the deal finally reached with the EU) has often proceeded as if we\nstill inhabited some bygone era of unitary-state, Westminster-centric politics.\nThis contradiction and its consequences\u2014not just in terms of its impact on\nnationalist sentiment in Scotland and Northern Ireland, but also on the future\ntrajectories of pro-union parties within each of our nations, in particular\nScottish Conservatives and the Scottish Labour party\u2014will be one of Brexit\u2019s\nlegacies. It is also possible\u2014though difficult to predict\u2014that the politics of\nEnglishness, and the place of England in the union, will remerge as an\nimportant vector of politics in the UK once the intense focus on Brexit and the\ninstitutional form it takes diminishes.<\/p>\n\n\n\n

All\nof this will reverberate through our party system for decades to come. To date,\nmuch of the focus of political debate has been on whether there might be a\nformal realignment in our party system\u2014either through a new centrist party or\nthe emergence of an insurgent English nationalist alternative to UKIP that\nfolds in a swath of Conservative Leave supporters, as well as some traditional Labour\nvoters.  <\/p>\n\n\n\n

Whether\nor not this party realignment comes to pass is moot: the hurdles to it are high\nin a majoritarian electoral system. Either way, the aftershocks of Brexit will continue\nto cause flux within and between the existing parties, not least because\ndevolution and the proportional voting systems of the devolved parliaments and\nassemblies create space for political insurgency that can profoundly influence\nthe major UK parties. Political identities have been shaken up, if not completely\nbroken, by the Brexit convulsion. It will be years before they settle down and\nwhen they finally do, it will affect not just who voters trust and the issues\nthey gravitate to, but the political coalitions they might join.<\/p>\n\n\n\n

After\nthe Brexit storm <\/strong><\/h4>\n\n\n\n

The Leave vote was not\nsimply an exercise in imperial nostalgia, as some have claimed. But, as we have\nshown, there are deep continuities between Britain\u2019s present and its past that\nwill shape its future. The dominant role of the City in the UK economy and the\nliberal framework of its political economy have endured over decades, as has\nthe nature of its welfare state. Even the newly emergent forces that are\nrestructuring the institutions of the union and the relationships between its\nnations have deeper historical roots. <\/p>\n\n\n\n

But\na political moment as large as Brexit will, without doubt, bring change too\u2014some\nof it directly related to leaving the EU, but much of it rooted in other long-standing\nfailings\u2014whether on regional inequality, housing, or economic insecurity\u2014that now\nhave greater political potency. Add to this the newer societal challenges that any\ngovernment has to face up to in the decades ahead: switching to low-carbon\nproduction and transportation systems, meeting the escalating care costs arising\nfrom ageing, and supporting the workforce to transition to longer working\nlives. And then consider the pent-up problems caused by the austerity decade that\nwill trouble our public realm in the years ahead: councils and school-chains\ngoing bust, hospitals needing bailing out, demands for the Universal Credit\nroll out to be halted, and so on. <\/p>\n\n\n\n

In\naddition to these burdens on state capacity will be the return of EU responsibilities\nto the UK amid a period of uncertainty. Whether it is forging a new trade policy\nin a protectionist age, a competition policy fit for the challenge of big tech,\nor a migration framework suited to a greying society, the British state will be\nlearning to read a new map in a fast shifting landscape.<\/p>\n\n\n\n

The\nconfluence of these pre-existing pressures with the new and urgent imperatives\nof Brexit will put strains on the state that have not been experienced since at\nleast the mid-1970s. It is hard not to see government becoming more involved in\nkey aspects of our national economic life\u2014certainly as a result of necessity,\nand possibly ideology too. <\/p>\n\n\n\n

Will,\nhowever, this greater involvement give rise to any fundamental shift in our\npolitical economy?In part, the\nanswer will, of course, come down to political choice. No variety of democratic\ncapitalism is immutable. For the first time in recent memory, the momentum in\nboth main political parties simultaneously lies with those favouring radical\neconomic rupture: whether through leaving the EU without a deal if necessary\nand pivoting towards a low tax, deregulated \u2018Singapore of the West\u2019 model; or\nrestoring public ownership and state-financed and directed growth. The politics\nof the moment would suggest the British model is set for profound upheaval. <\/p>\n\n\n\n

Yet\nif there is a lesson from twentieth century history, it is that some core\nfeatures of our political economy are hard to shift: they have survived\nmultiple changes of government, world wars, contrasting philosophies of economic\nmanagement and profound shifts in the structure of the global economy. Anyone assuming\nthat the political tumult of Brexit will inevitably give rise to some\nfundamental re-ordering of our capitalist model\u2014whether for good or ill\u2014may\nwell be waiting in vain.  <\/p>\n\n\n\n

What is certainly true, however, is that the constellation of pressures facing the UK means that a key feature of the post-Brexit era will be learning to navigate vulnerability. In the macro-economy the UK will live with levels of public debt that are far higher than the recent norm for decades to come, at the same time as interest rates seem likely to sit close to the floor. Reduced policy space means more risk of exposure to shocks.<\/p>\n\n\n\n

A\nsense of heightened economic exposure will also be the norm for the British\nworker, and not just because of their weak bargaining position and the continued\ndecline of unions. Workers are likely to remain exposed to the risk of further exchange\nrate devaluation\u2014which, as recent years have shown, feeds through directly into\nlower real wages. The risk that mobile employers decide to uproot production and\nleave the UK, or downgrade their operations here, is also likely to be\nheightened for years to come. <\/p>\n\n\n\n

At\nthe constitutional level too, precariousness will prevail. No one can know how\nBrexit will play out on the forces pushing for Scottish independence\u2014though it\nis not unreasonable to think that the shock of a hard Brexit might set back the\nindependence cause in the short to medium term, while strengthening it beyond\nthat. Either way, the issue will remain at the fore, as will the status of Northern\nIreland and, most probably, the governance of England within the union. Far\nfewer of these issues are settled than seemed the case just a few years ago. <\/p>\n\n\n\n

The\ngoverning challenge is not just the technical task of successfully negotiating these\nrisks. If there are reasons to hope that the resilience and flexibility of the\nUK\u2019s economy will help it to adjust to life outside the EU, albeit with weaker\nrates of growth and less dynamism than in the past, the same may not be true of\nour politics. The political challenge of forging a coalition of electoral\nsupport that could undergird any sustainable governing programme in the decade\nahead is a profound one. As various contributions to this volume show, post-Brexit\npolitics is likely to remain deeply divided along a number of connected\nfault-lines: generational, geographical and identity cleavages that cut across\nthe support bases of the two main parties. Crafting a political agenda that spans\nthese divides sufficiently to allow tough governing choices to be made would require\nremarkable leadership by the standards of any age, let alone one in which the\nmain parties are so visibly struggling to rise to the level of events.<\/p>\n\n\n\n

Whatever the chain of events in the months and years ahead\u2014a soft or hard Brexit, or remaining in the EU through a second referendum\u2014there will be a legacy of rancour and bitterness that will be hard to contain within the existing party system, and which may even challenge the basic norms of conduct of democratic politics. And even if the UK does leave the EU, the European question will endure as a major vector of British politics, for as Switzerland and others have found, any country that is a close neighbour to a large and powerful bloc like the EU is likely to be in permanent negotiation with it.<\/a>[<\/a> All the more so if, as seems highly likely, the UK remains a regulatory rule-taker in one form or another. Politics, more than economics, may be the UK\u2019s undoing.<\/p>\n\n\n\n

We\nshould, however, exercise caution about the gloom. In the heat of a crisis, it\nis always tempting to foresee an age of continued tumult. That case is easily\nmade in Brexit Britain. But there are also countervailing forces, too. The\nconsequences of breaking trading ties with the EU are so dire that one way or\nanother the UK will seek to navigate its way towards a relatively close relationship\nwith it. The strengths that have given the British model momentum will hardly fade\novernight, even if they now face great strain. Our high value services, world leading\nuniversity sector, and job-rich labour market, all provide grounds for\noptimism. The British state has shown itself capable of strategic purpose and\norganisational ingenuity in the last century. And\u2014however unfashionable it may\nbe to point this out in the current moment\u2014there remains a residual resilience\nin the democratic politics of the UK. <\/p>\n\n\n\n

Declinism\nis often overwrought and overstated in British public life\u2014that, too, is a part\nof our tradition. But history suggests powerful new directions can be forged in\npublic policy even in times of adversity. They have many times before, and no\ndoubt will again.<\/p>\n\n\n\n

The authors would like to thank Mike Kenny, Andrew Gamble, David Willetts and Torsten Bell for their insightful comments on a draft of this article. <\/em>
<\/p>\n\n\n\n

This article is an extract from Political Quarterly\u2019s forthcoming book \u2018Britain Beyond Brexit\u2019, edited by Nick Pearce and Gavin Kelly.<\/em><\/p>\n\n\n\n

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British politics is regularly said to be at a critical juncture. With Brexit, for once this is not hyperbole. It represents the most significant moment of political choice and potential rupture since the Second World War, and in peacetime, possibly since the repeal of the Corn Laws in the nineteenth century. For four decades, membership […]<\/p>\n","protected":false},"author":117,"featured_media":2231,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[1390,1395,1396],"tags":[],"coauthors":[1579,1580],"class_list":["post-2227","post","type-post","status-publish","format-standard","has-post-thumbnail","category-brexit","category-comment","category-uk"],"amp_enabled":true,"jetpack_featured_media_url":"https:\/\/politicalquarterlyblog.preliveweb.site\/wp-content\/uploads\/2019\/01\/Brexit-and-the-future-of-the-British-model-of-democratic-capitalism-stephen-radford-27354-unsplash-1.jpg","_links":{"self":[{"href":"https:\/\/politicalquarterlyblog.preliveweb.site\/index.php?rest_route=\/wp\/v2\/posts\/2227","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/politicalquarterlyblog.preliveweb.site\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/politicalquarterlyblog.preliveweb.site\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/politicalquarterlyblog.preliveweb.site\/index.php?rest_route=\/wp\/v2\/users\/117"}],"replies":[{"embeddable":true,"href":"https:\/\/politicalquarterlyblog.preliveweb.site\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2227"}],"version-history":[{"count":0,"href":"https:\/\/politicalquarterlyblog.preliveweb.site\/index.php?rest_route=\/wp\/v2\/posts\/2227\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/politicalquarterlyblog.preliveweb.site\/index.php?rest_route=\/wp\/v2\/media\/2231"}],"wp:attachment":[{"href":"https:\/\/politicalquarterlyblog.preliveweb.site\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2227"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/politicalquarterlyblog.preliveweb.site\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2227"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/politicalquarterlyblog.preliveweb.site\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2227"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/politicalquarterlyblog.preliveweb.site\/index.php?rest_route=%2Fwp%2Fv2%2Fcoauthors&post=2227"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}