Britain has not experienced a major crisis since 1984 when violent clashes erupted between miners and the government of Prime Minister Margaret Thatcher, who decided to shut down some mines because of their ineffectiveness. After months of conflict, the Iron Lady managed to twist the arms of pro-labour unions and won herself a famous victory.
The current Brexit crisis has been going on for three years, and is far more serious than what the UK has experienced in recent decades, at least since 1984. Observers can conclude that Britain is yet to realise how to get out of its crisis, which is getting complicated by the day, incurring upon the UK economy heavy losses in addition to social disintegration and division.
The crisis began after a referendum called by former Prime Minister David Cameron, which made no sense even at the time. Yet, the majority voted for leaving the EU, although most voters did not realise what Brexit could mean, and let themselves be influenced by the noise in social media and the sharp tongues of aspiring politicians. This is in fact one of the disadvantages of a modern democracy.
Watching the House of Commons’ debates last week was interesting — and painful at the same time. Prime Minister Boris Johnson lost three vote rounds in two days, including one for a no-deal Brexit and this is what Boris Johnson is seeking to achieve on October 31.
He made another proposal, to call for new elections, but failed to obtain the required two-thirds’ vote, which put the prime minister in a corner, especially after he lost his parliamentary majority after the resignation of two members of his party, including his brother.
All this suggests the crisis will intensify and cost the economy dear. Johnson cannot complete Brexit without a deal, although he himself voted against former Prime Minister Theresa May’s deal with the EU and forced her to resign. Thus, he cannot adopt the same deal. Despite his weak stance, the EU will give him no more than the deal given to May, which Boris cannot agree to.
There are two solutions, which are equally bitter. The first is extending the exit negotiations, which will deepen the crisis. The second is calling for a new referendum, which would waste more than three years of Byzantine negotiations between the exit and remain camps.
The UK pound is at its weakest in years, dropping to 1.2 against the dollar. Hundreds of companies and institutions have left Britain to avoid losing their privileges within the EU in case of a no-deal. Many Britons have got European nationalities to preserve their interests. Moreover, there is a possibility of a prolonged recession if the crisis continues, as expected, with more signs now being visible.
Whether the UK leaves or remains in the EU, the damage has been done; businesses will not return easily, or will never return after arranging their affairs elsewhere. This will weaken London’s position as a financial centre, especially as European financial institutions are based in London although the UK is not a member of the single currency euro. That’s because of the high potential for business and qualifications available within Britain.
There does not seem to be a quick and comfortable way out for Brexit, which means the debate would continue, leading to more losses and economic decline, and divisions within society that may result in deepening intolerance.
This poses a practical question: Was the UK in need of this crisis? There is the undeniable fact that the UK used to enjoy a strong economic situation and a relatively cohesive society with an optimism for the future.
Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.