Rising inequality in the UK and the political economy of Brexit Lessons for policy


The EU Referendum in the UK on 23 June laid bare long existing divisions in the country. A very divisive campaign for leave deepened the scars in the society further. After decades of deindustrialization, rising inequality, deteriorating working conditions, loss of voice, followed by the Great Recession and austerity, the majority of the working people felt the only way to express their discontent about their living and working conditions is to vote to leave. Throughout the campaign, the leave side diverted their discontent to a scapegoat of immigration and fuelled xenophobia. Various Brexit campaigns created an illusion that conditions can only improve if Britain takes control of its borders, which they claimed to be impossible as a member of the European Union. According to survey evidence fears of immigration are more pronounced among voters in a more vulnerable position in the labour market, and in the post-industrial north-eastern towns, with also a clear divide between generations, with around two-thirds of the over 55s voting to leave and 70 per cent of the under 25s voting to stay (Hobolt, 2016; Ashcroft, 2016; Burn-Murdoch, 2016). The disenfranchised communities did not feel that they have anything more to lose due to the economic risks of Brexit or loss of workers’ rights under a conservative exit scenario, which sadly is likely to prove wrong. 

Read policy brief