Lots of the poorest voters have voted to be poorer. What happens when the anti-establishment option also lets people down?
The poor are the fall guys yet again. With the economy struggling in the wake of the Brexit vote, and the pound plummeting in value almost hourly, here comes another grim statistic: low-paid workers will see £800 knocked off their annual wage in the next 10 years as a direct result of our decision to leave the EU.
It’s all because the minimum wage is pegged to median earnings, which we now know will be suppressed for a number of years. The Resolution Foundation think tank predicts that the next year’s Living Wage (that is just minimum wage, by the way, only being given the hard sell by the Treasury) will be 10p lower than the anticipated £7.60 due to weaker wage growth – meaning £200 a year will be lost for the lowest paid individuals in 2017. According to the research, the minimum wage may now never reach its initial target of £9 an hour by 2020, set down by former Chancellor George Osborne. That’s £800 a year missing from expected incomes for those earning the minimum wage.
In 1999, only one in 50 workers earned the minimum wage. By 2020, it will be around one in nine – at the least. We can thank automation as well as the loss of high-skilled roles to other EU nations for that.
So what? Pro-Brexit campaigners maintain that better long-term growth prospects when freed from the constraints imposed by EU membership are worth paying the price of a few short years of economic difficulties to achieve. But, as always, for those least able to bear the burden (and who once again shoulder the weight of it) those short years will feel very long indeed.
For many – particularly those in their twenties and thirties now – the impact of that lost decade could last a whole lifetime, with future earning potential affected by the freezing and falling of wages during the critical first 20 years of work.
What I’m writing sounds remarkably familiar; isn’t this just the same criticism levelled at austerity? That the poorest always pay the highest price? No, not this time. There’s a complication.
Most of the poorest voters did not have a hand in the decision to live with the effects of austerity. At the last election, all the major parties stood on a platform of cuts to public services in an attempt to get the deficit down (a project Theresa May has now abandoned in the face of the plummeting pound) – unless they chose to vote Green, there was no way out. But, in the EU referendum, every British voter played an equal part, even those who chose to abstain. And the result is what it is. Lots of the poorest voters have voted to be poorer.
Theresa May says “Brexit means Brexit”, but what Brexit really means for you depends on your assets and income, and how reliant your own household prosperity is on that of the state. For the poorest, the relationship between the two is very high. Brexiteers on the lower income scale can expect to suffer, and politicians need to be prepared for what will come next.
Brexit Concerns
Theresa May: UK to leave single market
Theresa May has said the UK "cannot possibly" remain within the European single market, as staying in it would mean "not leaving the EU at all". GettyLead campaigner Gina Miller and her team outside the High Court Getty Raymond McCord holds up his newly issued Irish passport alongside his British passport outside the High Court in Belfast following a judges dismissal of the UK's first legal challenges to Brexit PA wire SDLP leader Colum Eastwood leaving the High Court in Belfast following a judges dismissal of the UK's first legal challenges to Brexit PA wire Migrants with luggage walk past a graffiti on a wall as they leave the 'Jungle' migrant camp, as part of a major three-day operation planned to clear the camp in Calais Getty Migrants leave messages on their tents in the Jungle migrant camp Getty The Adventist Development and Relief Agency (Adra) which distributes approximately 700 meals daily in the northern Paris camp states that it is noticing a spike in new migrant arrivals this week, potentially linked the the Calais 'jungle' camp closure - with around 1000 meals distributed today EPA Migrant workers pick apples at Stocks Farm in Suckley, Britain Reuters Many farmers across the country are voicing concerns that Brexit could be a dangerous step into the unknown for the farming industry Getty Bank of England governor Mark Carney who said the long-term outlook for the UK economy is positive, but growth was slowing in the wake of the Brexit vote PA The Dow Jones industrial average closed down over 600 points on the news with markets around the globe pluninging Getty Immigration officers deal with each member of the public seeking entry into the United Kingdom but on average, 10 a day are refused entry at this London airport and between 2008 and 2009, 33,100 people were detained at the airport for mainly passport irregularities Getty A number of global investment giants have threatened to move their European operations out of London if Brexit proves to have a negative impact on their businesses Getty Following the possibility of a Brexit the UK would be released from its renewable energy targets under the EU Renewable Energy Directive and from EU state aid restrictions, potentially giving the government more freedom both in the design and phasing out of renewable energy support regimes Getty A woman looking at a chart showing the drop in the pound (Sterling) against the US Dollar in London after Britain voted to leave the EU Getty Young protesters outside the Houses of Parliament in Westminster, to protest against the United Kingdom's decision to leave the EU following the referendum Getty Applications from Northern Ireland citizens for Irish Passports has soared to a record high after the UK Voted in favour of Leaving the EU Getty NFU Vice President Minette Batters with Secretary of State, Andrea Leadsome at the National Farmers Union (NFU) took machinery, produce, farmers and staff to Westminster to encourage Members of Parliament to back British farming, post Brexit Getty The latest reports released by the UK Cabinet Office warn that expats would lose a range of specific rights to live, to work and to access pensions, healthcare and public services. The same reports added that UK citizens abroad would not be able to assume that these rights will be guaranteed in the future Getty A British resident living in Spain asks questions during an informative Brexit talk by the "Brexpats in Spain" group, about Spanish legal issues to become Spanish citizens, at the town hall in Benalmadena, Spain Reuters The collapse of Great Britain appears to have been greatly exaggerated given the late summer crowds visiting city museums, hotels, and other important tourist attractions Getty The U.K. should maintain European Union regulations covering everything from working hours to chemicals until after the government sets out its plans for Brexit, said British manufacturers anxious to avoid a policy vacuum and safeguard access to their biggest export market Getty Brexit will put British patients at 'back of the queue' for new drugs
Brexit will put British patients at the “back of the queue” for vital new drugs, the Government has been warned – forcing them to wait up to two years longer A medicines regulator has raised the alarm over a likely decision to pull out of the European Medicines Agency (EMA), as well as the EU itself. ealth Secretary Jeremy Hunt dropped the bombshell , when he said he expected the UK would quit the EMA – because it is subject to rulings by the European Court of Justice. Getty ImagesLondon to lose status as 'gateway to Europe' for banks
One of Germany’s top banking regulators has warned that London could lose its status as “gateway to Europe” for the banking sector after Britain quits the European trading bloc. Andreas Dombret, who is an executive board member for the Bundesbank—Germany’s central bank—told a private meeting of German businesses and banks earlier this week in Frankfurt that even if banking rules were “equivalent” between the UK and the rest of the EU, that was still “miles away from [Britain having] access to the single market”, the BBC reports. Jason HawkesExodus
The number of financial sector professionals in Britain and continental Europe looking for jobs in Ireland rocketed in the months after the UK voted to leave the European Union ShutterstockBrexit is making FTSE 100 executives richer
Pay packages of many FTSE 100 chief executive officers are partly tied to how well share prices are doing rather than the CEO’s performance -- and some stocks are soaring. ritish equities got a boost since the June vote because the likes of Rio Tinto, Smiths Group and WPP generate most sales abroad and earn a fortune when they convert these revenues back into the weakened pound. Sterling’s fall also made UK stocks more affordable for overseas investors. RexNot every lower income voter who cast their ballot in favour of Brexit did so over economic issues and the promise of a huge return of taxpayer funding to the UK. Many knew that there would be a significant financial impact yet still felt it was the right decision in order to protect the democratic mandate of the British electorate. Yet a significant number – I’d wager a majority – felt that leaving the EU would help to boost the competitiveness and productivity of the UK and particular the personal prosperity of low-paid workers and their families. That was an important element of the Brexit campaign. So what will happen when these voters find the opposite has occurred?
The Brexit vote was interpreted as a kick in the backside for the “establishment”, a chance to vent anger from those who felt “left behind” by modern politics. If Brexit doesn’t deliver the stability and prosperity they are looking for, what next? Politicians ought to be preparing for disaffection and its results – from the splintering of political structures such as the party system to the risk of outbreaks of rioting and physical violence – some 10 years ahead.
Labour's Keir Starmer demands parliamentary vote on 'hard Brexit' negotiation plan
This is not a long-winded, patronising “I told you so”. I did cast my ballot in favour of Remain as I found myself wholly convinced by the economic arguments in favour of staying in the EU – but the referendum campaign was hard fought and, as the road remained untrodden, there were no footsteps into which we could trail. Nobody really knew (or knows now) quite where it will lead. If they tell you otherwise, don’t listen.
I can’t say I feel sure that the short-term economic hit will be worth it in the end, though I know a great many sensible individuals – most with a far more sophisticated understanding of macroeconomics than I – who believe it will. What is certain is that, right now, it doesn’t matter. What matters is the next five to seven years and how the lowest paid in our society will fare.
It is wrong that, yet again, the least able to handle the hit are due to feel the brunt of it – and that’s wrong whether or not they voted for it. It is the business of our Government to protect the poorest, and that’s a much tougher job when our most economically vulnerable are also living on the fault-lines during the biggest shift in our social, economic and political position in the world for three generations. If they fail, where is that anger channelled? Who or what is the conduit for that unease when the anti-establishment option lets down the people too?
We need to have an answer to that. Our politicians have fair warning that a new era is coming, not just in our relationship with Europe, but in our relationship with ourselves. Before prosperity, there will be significant pain.