Brexit Can’t Cure Anger and Apathy of Northern England’s Jobless

The voters have spoken, but the inequality isn’t going anywhere.

Politics may have changed irrevocably in Britain since the country voted to leave the European Union two months ago. For some of the people who made it happen, the expectation is that little will for them.

Chatting over cigarettes outside the King John’s Tavern in Hartlepool, northeast England, Sharon Marshall and Fred Sawdon are among those who embraced Brexit and aren’t convinced their decision to go it alone will lead to better times. But in a town that’s less than five hours drive from the center of power in London and may as well be a light year away economically, it was an irresistible opportunity to protest.

“We voted for this, we voted for that, and we’re still in the same s---,” said Sawdon, 60, a former fisherman who has been looking for work on and off for the past two decades, including cleaning jobs. “I was left on the sidelines. There was a lot of money in the fishing industry, and they screwed that up.”

The autopsy by politicians and central bankers on Britain’s shock referendum result has focused on how disaffected regions could end up disrupting the status quo so dramatically and the potential economic fallout. For the people mired in the post-industrial debris of northern towns, the financial and social divisions at the heart of it risk getting wider.

On taking over as prime minister in July, Theresa May spoke of making Britain a country that “works not just for the privileged few but for everyone else” following the backlash against what was perceived as a London-centric elite.

‘Brexit Won’t Make No Difference to Us’

The Bank of England meanwhile has cut interest rates and resumed quantitative easing, or QE, a process that involves channeling money into the economy through financial markets. While the 11 percent drop in the pound since June 23 increased the cost of summer vacations and some imported goods, the stock market rallied and bond yields plunged to records. This month, a group protested outside the bank calling for an alternative to QE to get money more directly to people, such as through homebuilding programs.

“Brexit won’t make no difference to us,” said Marshall, 53, who worked in retail and is now also struggling to find a job. “It might on holidays, but who can afford to go on holiday?”

May returned to work this week and the challenge for her new cabinet is to forge policies to narrow the prosperity divide while negotiating a settlement with the EU.

Brexit Bellwethers

Hartlepool, a town of about 90,000, is in the English region with the most deprivation. To the south lies Middlesbrough, which has the highest rate of unemployment. To the north is Sunderland, a city whose backing for Brexit set the tone for the referendum upset. There are more people suffering from long-term illness and wages are about 20 percent lower than in the southeast.

Shipbuilding in Hartlepool, which drove its economy for over a century, came to a halt in the 1960s. There were efforts since then to transform its port into a North Sea hub, but the jobless rate is higher than it was before the financial crisis and is now nearly double the national average. People of working age in Hartlepool are twice as dependent on state handouts as they are in London.

“The north has had all of its industries taken away,” said Matthew Briggs, 34, a trained hairdresser looking for work in Hartlepool. “We should be due another economic revolution. It wouldn’t happen whilst being in the European Union because the further removed power is, the less they care.”

Hartlepool overwhelmingly opted to divorce from the EU, defying warnings by the U.K. government of a further rise in unemployment, the drop in the pound and a potential recession. Seventy percent of people voted to leave -- compared with the national average of 52 percent -- as concerns about immigration and how much money the U.K. contributes to the EU prevailed.

Lightning Rod

For such northern towns, the EU vote was like “putting up a steel rod in a thunderstorm,” said Andrew Sentance, a member of the Bank of England’s monetary policy committee from 2005 to 2011. “We’ve had globalization, we’ve had the impact of the financial crisis, we’ve had people who feel frustrated by the fact that the political system didn’t represent their views. And then someone held a referendum.”

A week after the Brexit vote, the Bank of England’s chief economist, Andy Haldane, acknowledged that for many Britons, the economic recovery in recent years had mainly benefited those living in London and the southeast of England, those already asset-rich, and those over the age of 50.

The result was people voted against their immediate economic interest -- at least based on the U.K.’s current arrangements with the EU -- with the idea things can only get better. That might prove to be costly, according to Resolution Foundation, a research group looking at living standards.

Brexit risks delaying the financial recovery for low-income families, or even reversing it, the group said. Slowing growth, rising consumer prices and cuts to benefits could all start to bite, according to analyst Adam Corlett. In addition, results show areas that voted more strongly to leave the EU often were larger recipients of aid from the bloc.

“I blame it all on Parliament,” said Marshall back at the pub. “All they want to do is look after London and that area for the money, they don’t care about us up here, and it’s really, really, horrible.” Will anything change by leaving the EU? “No. But I did vote to get out.”

—With assistance from Charlotte Ryan. 

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