Tory Austerity And Welfare Cuts Like Bedroom Tax Directly Caused Brexit, New Study Finds

Leave vote linked to areas hit hardest by George Osborne's cuts
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Tory austerity and welfare cuts directly caused Brexit, according to a ground-breaking new academic study.

George Osborne’s decision to slash billions from in-work benefits and policies like the bedroom tax had a huge impact in driving voters towards Nigel Farage’s Ukip and Eurosceptic politics, the University of Warwick report states.

The research paper by Thiemo Fetzer, associate professor in economics at the university, found a direct link between the Leave vote in the 2016 EU referendum and areas that suffered the worst cuts.

Fetzer told HuffPost UK that the withdrawal of welfare in poor areas allowed the Vote Leave campaign to “exploit” underlying worries about EU immigration and claims that billions were being spent on Brussels rather than at home in Britain.

He also suggested Labour failed to capitalise on the anti-austerity demands because the party was seen as being part of the ‘establishment’ under Gordon Brown and Ed Miliband.

The comprehensive new study used evidence from an ‘Understanding Society’ panel of UK households that allowed a detailed look at the political motivations of voters who were hardest hit by welfare cuts under the Tory-led coalition government, from 2010 onwards.

One of its most dramatic conclusions is that if austerity had not happened, the Leave vote in 2016 would have been 9.51 percentage points lower and “could have swung the referendum in favour of Remain”. Leave beat Remain in the referendum by just 3.8%.

Nigel Farage celebrates the 51.9% to 48.1% Leave-Remain result in 2016
Nigel Farage celebrates the 51.9% to 48.1% Leave-Remain result in 2016
GLYN KIRK via Getty Images

In his report, Fetzer writes that his study “shows that the rise of popular support for the UK Independence Party (Ukip), as the single most important correlate of the subsequent Leave vote in the 2016 European Union referendum, along with broader measures of political dissatisfaction, are strongly and causally associated with an individual’s or an area’s exposure to austerity since 2010”.

“The results suggest that the EU referendum could have resulted in a Remain victory had it not been for a range of austerity-induced welfare reforms,” he adds.

“These reforms activated existing economic grievances. Further, auxiliary results suggest that the underlying economic grievances have broader origins than what the current literature on Brexit suggests.

“Up until 2010, the UK’s welfare state evened out growing income differences across the skill divide through transfer payments. This pattern markedly stops from 2010 onwards as austerity started to bite.”

The study shows that spending on healthcare “flatlined” under the Tory-led coalition and spending on education contracted by 19% in real terms.

A key graph from the study
A key graph from the study
University of Warwick

Fetzer found that aggregate real government spending on welfare and social protection decreased by around 16% per person.

But in the poorest areas, spending on individuals fell by as much as 46.3% - and Ukip support started to grow in exactly those areas. In pounds and pence, the cost to individuals varied from £914 in Blackpool to just above £177 in the City of London.

Such districts were marked by a higher proportion of people with low educational attainment and by the withdrawal of manufacturing and other once dominant industries that provided well-paid and steady jobs.

Austerity map almost exactly matches the map for anti-EU sentiment
Austerity map almost exactly matches the map for anti-EU sentiment
University of Warwick

As well as the wider impact of cuts to tax credits for the working poor, the study focused on three main welfare cuts – the spare room subsidy or ‘bedroom tax’, disability living allowance changes and council tax benefit reductions.

The research found that households exposed to the bedroom tax shifted towards supporting Ukip, and their grievances grew as they fell behind with their rent payments due to the cuts.

“Dissatisfaction with political institutions as a whole increased following such cuts, with affected individuals being more likely to think that their vote is ‘unlikely to make a difference’ and that ‘public officials do not care’ about them.

“In other words, by curtailing the welfare state, austerity has likely activated a broad range of existing economic grievances that have developed over a long period,” the study says.

Key drivers of the Brexit vote, according to the study
Key drivers of the Brexit vote, according to the study
University of Warwick

Speaking to HuffPost, Fetzer said that while previous studies just “painted a picture” of the background to the Brexit vote, the new research found direct links between austerity and the rise in antagonism towards Europe and established parties.

“This is the missing piece in all the [research] work that’s been done on Brexit. When things turned sour for these people, there was a pick up in pro-Leave sentiment and support for anti-establishment parties.

“In circumstances where austerity operates, and people’s benefits are being cut, it’s very easy to scapegoat immigrants and people become more receptive to an anti-immigrant message.

“It’s the same with the £350m NHS pledge on the Vote Leave bus. It became very salient, because Ukip supporters are much more likely to believe that the EU was responsible for the UK’s national debt, ‘we have to send lots of money to the EU and not locally’, so the EU was seen as responsible for the austerity measures indirectly.”

Boris Johnson's infamous bus claim about the NHS and EU spending
Boris Johnson's infamous bus claim about the NHS and EU spending
PA Archive/PA Images

Fetzer added that other research suggested support for right wing parties increased in times of economic distress.

But he also hinted that Labour’s own record in opposition – when Jeremy Corbyn supporters claim the party was not sufficiently anti-austerity – was partly to blame.

“The big puzzle indeed is Labour ― why did they not benefit to the same extent. Some of it may be due to part of the austerity measures being due to Labour, for example incapacity benefit reform.

“This is speculative but I think the broader observation that austerity increased dissatisfaction with the political system as a whole may explain this - Labour may have been perceived by voters as being part of the very same establishment,” he said.

Labour MP David Lammy
Labour MP David Lammy
Chris J Ratcliffe via Getty Images

Labour MP David Lammy, a supporter of the Best for Britain pro-EU campaign, told HuffPost: “This report coming out of Warwick University perfectly captures the social and economic climate which led to the Brexit vote.

“It’s only natural that people up and down the country were angry and desperate for change after six years of job losses and cuts to vital public services. Voters felt they’d been squeezed for too long and were led to believe leaving the EU was the change they so desperately needed.

“But that wasn’t the case then, and isn’t the case now. Leaving the EU won’t solve the problems caused by chronic underinvestment and slashed government expenditure - it’ll make them worse. The £39bn divorce bill we would have to pay until 2064 won’t help and neither will the cuts to funding from the EU. And that’s before we even tally up the cost of planning and executing the necessary changes.”

The Tottenham MP added: “We cannot go ahead with this. We need a people’s vote on Brexit which gives us the opportunity to compare our current bespoke deal to the one May brings back.”

Since he quit politics to become Editor of the Evening Standard, Osborne has been a fierce critic of Brexit, but the new study supports Labour claims that he and Cameron bear responsibility for the outcome of the referendum.

A UKIP spokesman said: “It’s no surprise that some of the poorest areas of the UK are the ones which support Brexit most strongly.

“For decades successive British governments have pursued economic and social agendas set by the European Union. These have undermined the British economy and by extension the poorest in our society. The measures put in place by the EU supporting Tory ministers have only exacerbated these deep problems.

“Alongside regressive austerity measures our government is subsidising the destruction of our industry sector through relocation to the continent, landing the British workforce on the scrapheap.

“The Leave vote was in part the voice of the disaffected millions of British workers whose hopes had been removed by layers of distant and uncaring government.”

The Conservative Party have been contacted for comment.


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