A few weeks ago I wrote that the economic arguments in the British Referendum debate had been well and truly won by the Remain side – and, on Bill Clinton’s principle that “It’s the economy, stupid!”, that was that. Game over.
In fact, it was far from over. The economics were soon submerged in the emotional and moral arguments which swept it aside: immigration, particularly the Turks, loss of sovereignty, and the fear that Britain was going to get drawn inevitably down the road to closer integration inside the European Union. The polls, which started off reassuring David Cameron that he would win a handsome victory, swung the other way, causing panic in the Remain camp and share prices and the pound to fall sharply.
With just days to go, after a weekend in which the Leave campaign lost what Nigel Farage, the UKIP leader, called “momentum”, the polls have swung back again and are now running neck-and-neck. The markets, watching the bad-tempered debate in growing bewilderment, decided over the weekend that enough was enough and that sense and the Remainers will ultimately prevail. As Asian markets opened yesterday, the pound powered ahead, recording its biggest one-day rise since the banking crisis in 2008 when the whole British financial system was on the verge of collapse.
But if Thursday’s vote goes Mr Cameron’s way it won’t be because of the economic arguments. Forecasts have been coming so thick and fast with warnings of hellfire and brimstone attached to them that the British public has switched off. It doesn’t believe any of them, and with good reason: no single economist, literally not one, forecast the crash of 2008/9. The Treasury monitored 47 of them, including the Bank of England, the IMF, the EU and all the independent ones, and they were all wrong. Why should they be right now?
No, that has little to do with the rising optimism in the Remain camp. The swing back, which the market antennae picked up long before the pollsters, has come from the brutal murder of an engaging young Labour MP and passionate Remainer, Jo Cox, which caused campaigning to be suspended and Parliament to be recalled yesterday. European markets soon picked up the scent with stock prices following the upward trajectory of sterling.
Of course the polls and the markets could yet be wrong, but in a curious way markets seldom are (the same cannot be said about polls). The Cox tragedy has caused voters to pause and think again about the fateful path they were blindly heading down without seriously considering the economic consequences. No one much likes the European Union (particularly, as a recent poll showed, the French and Germans) but, as the Economist remarked last week, even if EU membership has unsatisfactory aspects “it beats all plausible alternatives”. That’s about the best that can be said for it.
Win or lose, it has been a dirty, soul-destroying and bruising debate that has frequently dropped into the puerile. Reputations have been irretrievably damaged, including that of Mr Cameron himself but even more so that of his chancellor, George Osborne, who has seen his chances of succeeding him as prime minister recede dramatically. Boris Johnson, the other main contender and chief Brexiteer, has also emerged badly, seen as an unprincipled political opportunist and an oaf (which he is not – in fact there is a very keen brain underneath that matt of thatch).
The Labour leader, Jeremy Corbyn, supposedly campaigning on the Remain side, has hardly said anything at all and Mr Farage capped his absurd campaign with a new poster depicting a long queue of migrants at the borders of the EU with the caption “Breaking Point”. That caused even a horror-stricken Boris to disown him and every political leader to condemn him as racist. It may also have helped public opinion swing back towards the Remain camp.
If the vote is a narrow one, either way a second referendum is emerging as a real possibility. The thoughtful Brexit economist Andrew Lilico suggested on Twitter that if Remain were to win “due to a Cox-related backlash, how could a second referendum be avoided?”
In the end that may be the most elegant solution. But it’s high risk. Better the devil you know: vote Remain.
Ivan Fallon is a former business editor of The Sunday Times.
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