Although the smart course of action would be for the U.K. is to conduct a second referendum on Brexit, it would take something short of a miracle for this to occur. A second referendum would be smart because two years ago so many people voted emotionally, but now have a better sense of what a real Brexit entails. The decisions concerning Brexit that are about to be made will shape the U.K.’s economy and London’s role as a center of banking and insurance, for many years to come.
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Polls show that about 60 percent of the British electorate favor a second referendum, with 54 percent of the electorate wishing to remain in Europe.
If Prime Minister Theresa May gets her way, the U.K. will undertake a soft Brexit in which it gains more control of immigration, maintains much of its trade relationships with Europe through a customs union, institutes a fragmented political structure because of the need to treat Northern Ireland differently from the rest of the U.K., loses control of its ability to exit unilaterally from its political and economic relationship with Europe, and loses its say in how many future regulations affecting it will be shaped.
Two years ago, immigration was the top issue for those who voted for Brexit. Theresa May’s plan will deliver on immigration control. However, her plan will not deliver the kind of hard Brexit that so many of her Conservative colleagues are insisting upon.
The original Brexit referendum provided the U.K. electorate with a vague choice: to remain in the European Union or to exit. The original referendum did not distinguish between a soft Brexit and a hard Brexit. A second referendum could offer the electorate a more clearly delineated set of choices than they had the first time around.
Supporters and opponents of Brexit in the first referendum were split along generational lines: Older voters supported Brexit while younger voters rejected Brexit. The future of the U.K. belongs more to the young than the old. A second referendum will provide older Britons with an opportunity to consider the impact of their votes on the future lives of their children. Of course, older Britons already had that opportunity in the original referendum; but emotions ran so high at the time that there is good reason to believe that those emotions interfered with reason.
I would suggest that psychologically, many of those who voted for Brexit in the original referendum were suffering from “future shock,” a condition described by futurist Alvin Toffler in his book of that name. People who suffer from future shock experience react to their perceptions of excessive change in too short a period of time.
For the U.K., joining the European Union did initiate considerable change in a short period of time. The culture of the U.K. did change, along with relative incomes. As a result, many Britons felt the change to be a net loss, at least for them. Psychologically, we know that people who face the prospect of accepting a sure loss prefer instead to take an imprudent risk, hoping to beat the odds and avoid any loss. The phenomenon is sometimes called “aversion to accepting a sure loss.” It seems to me that a vote for Brexit two years ago was a vote for the U.K. to take an imprudent risk.
Theresa May has backed herself into a corner. Even if she believes in her heart that a second referendum would be for the good of the country, she is vulnerable to “aversion to accepting a sure loss.” Her instincts would now tell her to escalate conflict rather than accept a second referendum.
The same instincts are driving her Conservative colleagues who are so forcefully arguing for a hard Brexit.
If the U.K. is lucky, then the British parliament will find a way to force for a second referendum. That at least would provide the country with a chance to make an informed choice, over the opposition of the Prime Minister as she pursues her compromise plan, and her Conservative colleagues who instead want a hard Brexit. The U.K. would have to beat the odds for a second referendum to happen; and then it would have to beat the odds of achieving a healthy economy, maintaining a strong financial sector, while managing the challenges that come with an altered political structure.