Tuesday, 13 October, 2015

The campaign for the UK to stay in the EU is gearing up, with the recent appointment of Stuart Rose to chair Britain Stronger In Europe, but the problems faced by “stay” campaigners are formidable, including the currently-unprecedented levels of public concern about immigration. One potential factor the pro-EU camp may not have considered is whether the UK’s extreme levels of economic inequality will sway voters towards a “leave” vote, and what can be done in response.

Growing evidence suggests that when inequality is high, levels of trust in government, businesses and other institutions is damaged. As former CBI head Richard Lambert said, “If leaders of big companies seem to occupy a different galaxy from the rest of the community, they risk being treated as aliens”. This means that exhortations to stay in the EU from politicians and business leaders who are seen as part of the ‘establishment’ are at major risk of being counter-productive.

This is not just speculation:  the British Social Attitudes Survey consistently shows that those who agree with the statement “Big business benefits owners at the expense of workers" hugely outnumber those who disagree. The historian Tom Devine writes that intervention by big businesses in the Scottish independence referendum (in favour of remaining within the union) “was regarded by the electorate as brazen interference by the forces of market capitalism in the democratic decision processes of the Scottish people. The intervention proved counter-productive”.

Some of the inequality-related factors behind the public’s distrust of the ‘establishment’ will not be removed before the EU referendum takes place. The UK’s shamefully-low number of people from ordinary backgrounds entering the “different galaxy” of senior roles in business or politics will take generations to repair. It will take time to spread a business culture that works “as if the whole workforce matters”.

Both sides need to consider how to appear to be on the side of ordinary people. The “leave” campaign has to reassure voters that effect of Brexit will not be - as the High Pay Centre suggests - to tilt the playing field still further in the favour of bankers at the expense of workers. The “stay” campaign have to have advocates who look more like the electorate, rather than have members of an elite caste making a generalised case about the benefits to the economy (benefits which many people will - probably rightly - suspect they won’t share) and they need to propose reforms to the EU that can be shown to benefit ordinary people, not just wealthy landowners and big businesses.

Duncan Exley, Director