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A vote of confidence in Britain (even the bond markets agree)

The EU referendum result was a vote of confidence in the United Kingdom

2 July 2016

9:00 AM

2 July 2016

9:00 AM

During the referendum campaign, it seemed at times as if a competition was on to issue the most hyperbolic claim of what might happen should the British public vote to leave the European Union. Now politicians and commentators are competing to come up with the most hysterical assessment of the British decision to leave. Leading the field is Mark Rutte, the Dutch Prime Minister, who declared that ‘England has collapsed: politically, monetarily, constitutionally and economically.’ In other words: without us, you’re nothing.

Politics in collapse? We do not want to intrude on the private grief of the Labour party but the Tories are heading into a leader-ship contest with as much sense of direction as at any point in the party’s recent history, as James Forsyth explains on page 14. Monetary collapse? The pound buys as many euros as it did two years ago and its softening against the dollar will only make our exporters more competitive in the word’s largest economy. As Mr Rutte knows, a falling currency brings a stimulus that many eurozone countries would kill for.

But the single most important monetary figure is the gilt yields: the interest rate charged on the UK government as it borrows money. The more worried investors are, the more interest they charge on loans to the government. When Greece hit the rocks, markets charged 30 per cent interest rates. On Monday, the UK gilt yields dipped below 1 per cent for the first time in our nation’s history. Which means that investors, unlike European politicians, seem to have plenty of faith in Britain. Economically, this country has been creating more jobs than the rest of Europe put together (which partly explains our immigration problems).

And constitutionally? The vote for Brexit was a vote in defence of our country’s constitution, our laws and our parliament. To end a system where judges in Strasbourg and Luxembourg could overrule judges chosen by our democratic government. If Mr Rutte was referring to Scotland, then he should know that Nicola Sturgeon is overplaying her hand, as Iain Martin, a former editor of the Scotsman, explains on page 18.


The reason so many British institutions are medieval in origin is that they evolve, and respond well to democratic pressure. The panic we can hear now about Britain leaving the EU — that this is an imbecilic uprising by the uncouth and uneducated — is comparable to the panic that followed the 1832 Reform Act, and at other moments when British demo-cracy upended the establishment.

A great many well-connected people are saying that the country is finished. This is hysterical and harmful — but perhaps inevitable after such a deeply bruising few months. Markets are seesawing, aggrieved Remainers have taken to the streets, and an inter-generational war has broken out, with some accusing their own parents and grandparents of damaging the lives of the young.

Amid all the turmoil, nothing is more alarming than a reported rise in racist attacks. An elderly Polish man and his son were attacked in east London, while in Hammer-smith a community centre was daubed with graffiti. British Asians — whose presence in the UK has nothing to do with EU membership — report that they have been told to ‘go home’. The charge is made that the Brexiteers gave cover to racists, who now feel emboldened. But these incidents, while disturbing, do not indicate that Britain has suddenly become bigoted.

If racist abuse is heard on a bus in Manchester and it makes national news, that is a sign of a county united in revulsion against racism. The fact is that Britain remains the greatest melting pot in Europe, a country where the only genuinely racist party — the British National Party — saw its votes fall by 99 per cent at the last general election. Even Ukip says it welcomes immigrants of all colours and religions, and just seeks a controlled process. When Ukip unveiled a poster featuring a photograph of Middle Eastern migrants on foot in Central Europe with the slogan ‘Breaking point’, the party was widely condemned. Ukip MEPs speculated that Farage was trying to sabotage the Brexit campaign to keep himself in a job.

The vote to leave the European Union was a vote to control immigration, not a vote against immigration. The distinction is crucial. Britain relies heavily upon immigrants to make the country thrive and keep public services working — from NHS nurses to Bank of England governors. The Vote Leave campaign was fronted by an immigrant: Gisela Stuart. Yet across Europe, support for immigration is collapsing because it is felt that governments are losing control of it. A refusal to respond to voters’ legitimate concerns pushes them into the hands of genuinely racist parties. This, rather than Brexit, is what should panic European leaders.

Britain is arguably the most tolerant country in the western world — compassionate, welcoming, globally minded. And, as the Brexit result shows, the country is self-confident for all these reasons. Sooner or later, tempers on the continent will cool and the likes of Mr Rutte will remember that Britain’s strengths were never drawn from EU membership and won’t be damaged by Brexit. What we saw last week was the greatest ever vote of confidence in the United Kingdom — a vote to retrieve sovereignty and start a new chapter in our country’s history. It can now begin.


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