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Danny Blanchflower: Cameron's Problems Are Far From Over(Audio) · Bloomberg Intelligence

• 0:00
  Speaker 1: The Brexit vote on Bloomberg Radio. Polls close at ten
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  Speaker 1: pm in Britain. That is now and the future Britain's
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  Speaker 1: relationship with the European Union though, will not be known
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  Speaker 1: until at least nine hours from now. That's at seven
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  Speaker 1: am tomorrow morning on Friday, and of course there are
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  Speaker 1: no exit polls and the results so will come in
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  Speaker 1: during a three period three hour period on Friday between
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  Speaker 1: four am and seven am, so by breakfast time the
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  Speaker 1: results of the European Union referendum should be known. Here
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  Speaker 1: to tell us more is a leading economist, Danny blanche Flower,
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  Speaker 1: Professor of Economics at Dartmouth College. He is also a
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  Speaker 1: former member of the Monetary Policy Committee of the Bank
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  Speaker 1: of England. He can be followed on Twitter at d
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  Speaker 1: underscore blanch Flower. Danny blanch Flower. Thank you for being
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  Speaker 1: with him. Well interesting day, goodness me go ahead give
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  Speaker 1: to your thoughts. Well. My thoughts are that the markets
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  Speaker 1: are clearly expecting a Remain vote. They saw polls over
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  Speaker 1: the last few days. Ten of the last fifteen have
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  Speaker 1: been for Remain. But we've seen big surprises in UK polling.
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  Speaker 1: They're hoping that it looks like the Scottish referendum, which
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  Speaker 1: in the end people turned out for the status quo.
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  Speaker 1: But the memory is a year ago. Um. They the
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  Speaker 1: predictions in the polls for the election outcome were very
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  Speaker 1: bad and obviously the markets and everybody else in economic
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  Speaker 1: terms anyway, is assuming that remain will come. The worry
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  Speaker 1: is actually that if Brexit actually is in the majority,
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  Speaker 1: this would be a surprise to the markets and that
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  Speaker 1: would likely generate major market turmoil. It would seem to me,
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  Speaker 1: not least the pound. And that's the reason why contingency
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  Speaker 1: planning in Britain, banks and around the world that is
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  Speaker 1: about to swing into gear as we wait for for
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  Speaker 1: the results. This is this is our a mentor's day.
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  Speaker 1: I would say, why was this vote so close? Danny
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  Speaker 1: blanche Fower? You know, year six months ago, maybe Ben
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  Speaker 1: three or four months ago. Oh Brexit, Yeah, I guess
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  Speaker 1: we're gonna start talking about it and then suddenly Brexit.
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  Speaker 1: What happened? Well? Um, interesting? I think it's an interesting question.
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  Speaker 1: I think actually it's a continuation of the hurt that
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  Speaker 1: people have seen from the Great Recession. People are not
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  Speaker 1: happy with the status quo. I guess a number that
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  Speaker 1: I often kind of look at is If you look
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  Speaker 1: at the GDP per capita in the UK today compared
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  Speaker 1: with the start of the recession in two thousand and eight,
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  Speaker 1: it's up one in total. Real wages are really still
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  Speaker 1: below what they were in two thousand and eight, and
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  Speaker 1: there has been a major in looks of people from
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  Speaker 1: the rest of your Immigration has risen rapidly. Many of
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  Speaker 1: the issues in the US have repeated in the UK.
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  Speaker 1: They've seen the flood of immigrants coming and they've also
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  Speaker 1: seen the poor performance of the European economy. France has
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  Speaker 1: a temper cent unemployment rate, We've still got twenty odd
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  Speaker 1: in Spain, in Greece, and people think, you know, we
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  Speaker 1: want our own sovereignty. We don't want to be stuck
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  Speaker 1: with these Europeans. Is a losing game, and so we've
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  Speaker 1: ended up seeing something very close. Um, I'm not sure
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  Speaker 1: that I that I would have predicted was quite as
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  Speaker 1: close as this. Quite so difficult to to cool given
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  Speaker 1: that term, if you like, the status quo has thrown
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  Speaker 1: everything it has at it. Danny Blancheflower, why did the
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  Speaker 1: Prime Minister David Cameron promised to hold this referendum? I
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  Speaker 1: think it's a really great question for him. I think
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  Speaker 1: he's gonna obviously regret it to this very moment. And
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  Speaker 1: obviously if Brex had come, he's gone tomorrow, and if
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  Speaker 1: it's very narrow he may actually be gone as well.
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  Speaker 1: I think the reality was that there was continuous infighting
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  Speaker 1: within the Tory Party. It's interesting he managed to get
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  Speaker 1: himself The good news was he got himself a twelve
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  Speaker 1: seat majority last May. But that turns out that he
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  Speaker 1: was vulnerable to views from the euroskeptics within his own party.
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  Speaker 1: And so what's interesting, I think is that the the
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  Speaker 1: in fighting, particularly for this vote is actually greater than
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  Speaker 1: it was at the election, more particularly between people within
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  Speaker 1: the same party. So I think the answer was it
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  Speaker 1: was called for internal political reasons. It was certainly not
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  Speaker 1: something that placed like Northern Ireland and Scotland and Wales
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  Speaker 1: were really looking for it to if you like, it's
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  Speaker 1: a sort of internal English issue within the within the
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  Speaker 1: Tory party. But presumably David Cameron didn't think relate your
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  Speaker 1: last question. He didn't think it was going to go
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  Speaker 1: down to the wire and he'd be sitting in Downing
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  Speaker 1: Street watching these results biting his fingernails. Well, the latest
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  Speaker 1: UGO of UK pull on Brexit, the UK leaving the
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  Speaker 1: European Union shows a vote of to remain to leave.
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  Speaker 1: This is being reported by Sky News, So again a
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  Speaker 1: narrow victory. So we could go back and forth, what
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  Speaker 1: if what if they leave? What if they stay? But
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  Speaker 1: regardless of whether they stay or leave, what does this
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  Speaker 1: mean for the UK going forward? What does it mean
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  Speaker 1: for the current government? Do they have to make changes?
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  Speaker 1: They can't. I guess you can't really adjust this one.
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  Speaker 1: It's not like all we can boost economic growth, right,
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  Speaker 1: or trying to raise prices like a central bank. Well,
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  Speaker 1: let's let's just sort of separate the economics at the moment,
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  Speaker 1: because obviously if there's a Brexit vote, we're going to
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  Speaker 1: have to talk about what the bank aving and would
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  Speaker 1: have to do, and global repercussions and so on. Let's
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  Speaker 1: think of the politics. I mean, I certainly think it's
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  Speaker 1: back to Pim's question. I certainly think if there's a
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  Speaker 1: Brexit vote, David Cameron called this vote there, I'm going
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  Speaker 1: to try and renegotiate Cam back and say we should remain.
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  Speaker 1: If if the vote is not to remain, that then
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  Speaker 1: that's a then politically he's gone, and presumably the Chancellor
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  Speaker 1: is gone. So that's a political crisis, I would say,
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  Speaker 1: particularly from a Brexit point of view. But I think
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  Speaker 1: there's still a major political issue, which is that supposing
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  Speaker 1: the vote is pretty close, which we sort of think
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  Speaker 1: it's probably going to be. I don't think it's going
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  Speaker 1: to be sixty forty when he could be, but I
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  Speaker 1: suspect no polls have shown that if it's a pretty
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  Speaker 1: done close vote, then Cameron is going to find it
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  Speaker 1: extremely hard with a twelve vote majority to pass anything
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  Speaker 1: or perhaps even to be able to remain as leaders.
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  Speaker 1: So a political crisis is probably the thing that's on
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  Speaker 1: the table the most assume. But obviously there's the economics
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  Speaker 1: we can talk about. Just to reiterate that, the you
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  Speaker 1: gov the Appolling Service reports that the UK pole on
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  Speaker 1: the European Union shows fifty remain and forty eight percent leave.
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  Speaker 1: Danny blanch Fower one thing that I found particularly interesting
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  Speaker 1: was who is able and eligible to vote? If you're
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  Speaker 1: a British, Irish or Commonwealth citizen and you're over the
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  Speaker 1: age of eighteen and registered in the United Kingdom, you
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  Speaker 1: can vote. Well, that's true, but actually I fit that criteria,
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  Speaker 1: but in fact I wasn't able to vote because I
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  Speaker 1: think you had to have been lived in the UK
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  Speaker 1: as well for the last for the last ten years
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  Speaker 1: fifteen actually last fifteen years. But I actually didn't get
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  Speaker 1: to vote. So I tried and I looked and they said, sorry,
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  Speaker 1: Blanche Flower, that you don't get to vote. Um, yes,
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  Speaker 1: so so people people who lived there. I think there
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  Speaker 1: were issues particularly about the say people who live abroad.
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  Speaker 1: I mean there's a big issue here, which is that
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  Speaker 1: there are three million people from Europe living in Britain
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  Speaker 1: who who probably don't get the vote, and there's two
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  Speaker 1: million people who are Britas who live in Europe. And
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  Speaker 1: it was I don't recall, I don't think they get
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  Speaker 1: the voto. Others may may tell me differently, unless you're
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  Speaker 1: from Ireland, Malta or a Cyprus. And I also found
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  Speaker 1: interesting that the Commonwealth citizens in Gibraltar are able to
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  Speaker 1: vote as are members of the House of Lords, and
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  Speaker 1: they are not necessarily allowed to vote in the general election. Right.
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  Speaker 1: And David Cameron apparently was headed to Gibraltar to give
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  Speaker 1: a speech the other day when there was the terrible
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  Speaker 1: assassination of a British empty and he and he didn't
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  Speaker 1: actually go there, and we should talk about that that
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  Speaker 1: in a sense that that that terrible political it was
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  Speaker 1: highly political event. It certainly appears that the polls were
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  Speaker 1: moving towards Leave and then there was that event and
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  Speaker 1: both parties pulled out, stopped campaigning any any further. And
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  Speaker 1: since that moment, it does look that the remain has
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  Speaker 1: moved to the ascent. And I'm not saying that that's
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  Speaker 1: you know, that that's been the driving force, but it
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  Speaker 1: it does seem that that was a turning moment when
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  Speaker 1: when the British people were totally shocked. I wonder Danny
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  Speaker 1: event as as a vote as a doesk settles on
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  Speaker 1: this vote, Let's say that the remains when I wonder,
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  Speaker 1: you know, where the focus turns next to people look
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  Speaker 1: at the economy again? Do they look at what are
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  Speaker 1: the what are the grapes of the British people they're
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  Speaker 1: faced with? That's a great question, Kathleen. I mean, my
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  Speaker 1: my view, as you know, over time has been the
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  Speaker 1: growth of the UK economy has been a major issue.
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  Speaker 1: We've seen very palled growth and it certainly appears that
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  Speaker 1: actually there's been some slowing um. The Monetary Policy Committee
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  Speaker 1: is has argued that that about half the slowing perhaps
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  Speaker 1: is because of the fear of Brexit, and so that's
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  Speaker 1: just if that's right and there isn't a Brexit, that
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  Speaker 1: actually there may be some turning back and some improvement,
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  Speaker 1: but all right, public Danny Blanchfare, thanks so much. This
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  Speaker 1: is Bloomberg Radio.