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Why Progressives Should Back a Brexit

20/05/2015 21:27 BST | Updated 20/05/2016 10:59 BST

Waking to the news of a Conservative majority, my heart sank. In this self-interested country you might think I'm somewhat of an outlier. I am not one of the 1.1million public sector workers who the IFS estimate will lose their job over the course of this parliament. Nor am I young, sick, or disabled and facing the brunt of £12billion benefit cuts. But that does not mean I do not feel for these people. People who, let's not forget, are the innocent victims of an ideological desire to reduce a state apparatus that provides us with health care, education, infrastructure, and social security.

Be in no doubt, this is a crushing defeat for progressive, compassionate, politics. And the Tories, aided by their Fleet Street allies, are wasting no time in eagerly sharpening knives for the "hard choices" and "difficult decisions" ahead. With the public whipped up in fear of economic stability, predicated largely upon deficit reduction, it is easy to feel hopeless. Not least about the absence of space in public discourse for a grown up debate, which discusses openly whether running a surplus is sensible when bond yields are near-zero, or the instrumental role of the state in research, innovation and economic growth. We, instead, have a political narrative dominated by neoliberal polemic which eschews any alternatives to laissez faire capitalism as a misunderstanding of economics. This is how far the establishment has pushed us to the right, you can't even propose the most modest of market interventions without being ridiculed for eating a bacon sandwich.

This is truly desperate stuff, but do not despair. There is hope and it's called a Brexit. Luckily, before the election, an EU referendum pledge was forced upon the Conservatives. Yet the consequences of a yes vote in this referendum will not play well for their core vote. In the event of an exit, some of Britain's finance sector will have to move to Frankfurt or Paris - in an effort to remain within the single market. As Britain's economy is depressingly dependent on financial services, GDP will take a hit - and the pound will depreciate. The Bank of England will need to move fast to stabilise an ailing currency by increasing interest rates. However, even a small rise in the base rate will have a huge knock on effect for asset classes in Britain, given the historically low interest rates currently sustaining them. And a particular asset class is most vulnerable; housing. Expect a house price correction should Britain exit the EU, provoking a US style sub-prime crisis for over levered households, and a liquidity trap making 2008 look like an inconsequential slump.

In short, Brexit would be economic masochism. Yet, it is the asset-rich who, for once, bare its fiercest consequences. It strikes me odd that the left don't consider this fact. Here is an opportunity to expose this paper-money economy, where people feel richer not through their pay-packets but through their artificially inflated assets. An economy which impoverishes those left behind by the asset boom (young, poor, sick) but confers ever concentrated riches upon those who were fortunate enough to ride it. And yet, despite this, the left remains full-bloodedly behind EU membership.

I think that it is time to reconsider this stance. Those of us who are passionate about social democracy should now very seriously consider voting for an EU exit. A post-exit crisis will create a chasm for an intellectual shift in economic discourse. And here, in this time of existential crisis for the Labour movement and its progressive allies, we have a glowing opportunity. An opportunity to press the reset button on a dysfunctional economy, and campaign for a fairer, more stable, economy.