How the Leave campaign has broken our trust in British institutions – with dangerous consequences

If a serving cabinet minister says we ought to be contemptuous of qualified analysis, that sets a baleful example

Ben Chu
Tuesday 21 June 2016 16:15
Mark Carney, Governor of the Bank of England, has seen his warnings about the impact of Brexit met with questions about impartiality
Mark Carney, Governor of the Bank of England, has seen his warnings about the impact of Brexit met with questions about impartiality

What is the wellspring of a nation’s prosperity? Is it a land’s natural resources? Is it a powerful army? Or does it flow from native talent? The education and industriousness of a state’s population? Maybe it’s all about technology and infrastructure?

You will find plenty of countries with all these assets, sometimes in abundance, yet which are still poor and dysfunctional. What is required to bind all this material together, to turn the virtuous circle of prosperity, is institutions.

Our institutions – such as the rule of law, independent civil servants and a free media – are the invisible scaffolding of almost all prosperous nations. But they are also something more than this. They are a general and informal appreciation of the lines that must not be crossed, mutual expectations of behaviour.

“The rules of the game in a society” is the classic definition of the late American Nobel-winning economist Douglass North. Institutions build the social trust and confidence that allows the investment and complex economic transactions that create our prosperity to take place. The strength of all these institutions depends on a broad respect by the majority – and most especially from those with power, and those who are challenging for it.

Mark Carney and Jacob Rees-Mogg clash at Treasury Select Committee

Raghuram Rajan this week announced he will step down as central bank chair in India after heavy pressure from ministers in the government of Narendra Modi, in a clear erosion of the independence of the central bank. This undermining of an Indian economic institution is likely to be, in time, a major challenge for the broader Indian economy. Chinese economic policy, for instance, is not trusted by the markets in large part because its central bank is plainly not politically independent.

Institutions at home are under threat too. Perhaps the most serious crime of the Leave camp in this referendum on Britain’s membership of the European Union has been its relentless undermining of British institutions.

Leave’s main response to analyses of the Bank of England and the Treasury on the likely negative economic impact of Brexit – not least a major fall in the value of the pound – has not been to challenge the conclusions in a scientific way, or to highlight other countervailing benefits of leaving. Instead, they have raised questions about the impartiality of these institutions and woven tapestries of conspiracy.

So the Governor of the Bank Mark Carney is accused of doing a secret deal to help George Osborne. The International Monetary Fund and the OECD are in on it too. Treasury civil servants, we’re told, have taken dictation from ministers.

Third sector organisations have received the same treatment. The Institute for Fiscal Studies is, apparently, only saying what it is saying about the economic pain that Brexit would inflict because it is part-funded by the EU. UK scientists and universities who urge a Remain vote are compromised because they are all on the Brussels gravy train. Time and again leading figures in the Leave campaign have gone for the player, not the ball.

Hypocrisy is the oblique tribute vice plays to virtue. And so it is with the attacks on the likes of the Bank of England and rigorously impartial organisations such as the IFS and the National Institute for Economic and Social Research. The Leave camp is so scathing and intemperate in its response to their analyses precisely because of their perceived authority and independence and their ability to influence the public. To this extent the attacks smack of desperation.

Yet this style of campaigning does damage. If you trash the reputations of institutions, if you cross those lines for short-term advantage, there is a cost. Others will cross those broken lines. And they may have even fewer scruples. Witness the way Donald Trump has carried all before him in the US Republican primary elections. Trump has brazenly vaulted the invisible lines on race, on immigration and the acceptable limits of political language that mainstream Republicans have been tip-toeing over for years.

Pro-Brexiters might be reading this and sensing this argument amounts to a patronising instruction for people to do what they are told, to outsource their thinking to the elites, the technocrats and the establishment. Far from it. People should make up their own minds – but informed by facts and impartial analysis. This is not an argument that technocrats and civil servants are always correct or never biased (either consciously or unconsciously). But it is a strong argument against the style of campaigning and politics from the Leave camp in recent weeks.

If institutional organisations, or rather the people in them, are wrong or abuse their authority, there must be a framework of accountability, transparency and checks and balances. Other institutions can police the institutions – they should not be above challenge. But demagogic dismissals of elites and experts, such as the infamous comment from Michael Gove that “people in this country have had enough of experts”, merely pollute the waters of public life. If a serving cabinet minister says we ought to be contemptuous of qualified analysis, that sets a baleful example.

Let’s take a concrete example of how the rules of the game are being ignored. The UK Statistics Authority watchdog has criticised David Cameron for using official statistics in a misleading way in the past.

Downing Street didn’t like it, but it swallowed the criticism and stopped doing it. Contrast that with the Leave Campaign, which has been repeatedly warned by the UK Stats Authority that its claim of a £350m weekly cost to Britain of EU membership is misleading. But Vote Leave has simply ignored the watchdog and carried on using the figure.

There are scores of countries in the world where institutions are not trusted or weak, states where the general assumption is that technocrats are lying, or are only in it for themselves. And often that is true, because it becomes a self-fulfilling complaint.

There is a thin and invisible layer of institutional civilisation that covers the prosperous countries of the world, such as Britain, and which protects them from the poverty and misery of so many others. And many prominent Brexiteers, to their huge discredit, have been scratching away at it.

The EU referendum debate has so far been characterised by bias, distortion and exaggeration. So until 23 June we’re running a series of question and answer features that explain the most important issues in a detailed, dispassionate way to help inform your decision.

What is Brexit and why are we having an EU referendum?

Will we gain or lose rights by leaving the European Union?

What will happen to immigration if there's Brexit?

Will Brexit make the UK more or less safe?

Will the UK benefit from being released from EU laws?

Will leaving the EU save taxpayers money and mean more money for the NHS?

What will Brexit do to UK trade?

How Brexit will affect British tourism

What will Brexit mean for British tourists booking holidays in the EU?

Will Brexit help or damage the environment?

Will Brexit mean that Europeans have to leave the UK?

What will Brexit mean for British expats?

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