THE BLOG

Brexit's Biggest Threat Is to the Poorest - Here and Abroad

24/07/2016 20:54
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The convulsions of the past few weeks have given us a rollercoaster foretaste of things to come in the wake of the Brexit vote.

Disclaimer: I voted to remain. But I don't want to rehearse the recriminations aired since the vote. History will judge whether this was a gamble worth taking.

But there are very legitimate reasons to fear for the futures of the most vulnerable people and communities at home and overseas.

Much has been made of the demographic factors which led people to vote Brexit. One of the biggest ironies, though, is how the Leave vote was strongest in areas that have actually benefited disproportionately from EU membership.

While it's true that we have been net contributors to the EU budget, the Commission has funnelled money into less prosperous parts of the UK for over 40 years through European Structural and Investment Funds (ESIF). Past experience would suggest that this money would not have been targeted at marginalised areas with the same consistency and on such a scale if it had been left to Westminster to write the cheques. The very strength of the leave vote in places like Wales, Cornwall and the North of England demonstrates how little successive governments have done to correct post-industrial decline and stem growing frustration.

The sad truth is that a majority of people in these areas have opted voluntarily to cut off structural funding worth £1.8bn per year over the 2014-2020 period, as well as access to European Investment Bank money which has totalled £5.6billion in the past year alone. There are signs that some areas are already regretting the decision. What should trouble all of us, however, is that so little was done to address issues of neglect ahead of the referendum

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Credit: Metro-Dynamics, 'AdiEU: The Impact of Brexit on UK Cities'

There is a real problem with growing inequality in the UK. Blackpool, Great Yarmouth or Merthyr Tydfil feel a world away from the glossy swagger of London. Mrs May's opening speech as Prime Minister conveyed the right sentiment, out of the now widespread anxiety about 'a divided nation'. However, the government needs to do much more. It must urgently make clear how it plans to replace the dramatic loss in EU funding. But, to really start healing some of the divisions in our country, it also has to come up with a clear strategy for how to spread genuine prosperity.

GDP per capita remains (despite the recession) at one of the highest levels in our history, but it's clear that many millions feel vulnerable and disorientated in a fast-changing world. Targeted investment will help, but the first step is to shift the way we think about what the economy should do for society. It's not just about growth, products, services and consumption. We should see the economy as the system we have to organise resources for human wellbeing - a means to invest in our citizens' futures. Not one political leader has had the strength of vision to deliver this purpose, but making a real difference to people's lives will depend on it.

The other very real threat on the horizon is to the international aid budget. Britain set an example for the world under David Cameron's premiership by signing its commitment to spend 0.7% of GDP on aid into law. It's telling that one of his last pleas as PM was for this legacy to be respected.

But with Theresa May's bloody reshuffle now over, we are left with a gaggle of aid-sceptics in charge of the purse strings and policy agenda. From the Chancellor Phillip Hammond and Brexit Secretary David Davis, right down to the new International Development Secretary and Leave-zealot Priti Patel, we can consider the knives to be well and truly out for the £12billion we spend to help the world's poorest people.

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A watering down of this commitment would not only be foolish, parochial and short-sighted. It would also jeopardise our ability to meet our international obligation to meet the UN's Sustainable Development Goals (SDGs), agreed last year, to eradicate poverty and lack of opportunity across the world by 2030.

As I argued when the goals were set, the fact they (unlike their predecessors, the Millennium Development Goals) apply to all nations means we all have a responsibility to work towards them in a spirit of collaboration and cooperation. Backtracking on aid, while consistent with the current impulse to 'pull up the drawbridge', would confirm to other countries that we have checked out of multilateralism - and send the message that they can do likewise.

We mustn't further punish the poorest in Britain or around the world because of the decision to leave the EU. Theresa May will already be thinking of what will define her premiership; spreading prosperity more equitably at home and abroad would be something to be truly proud of.

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