Originally published 16 December 2016
What Brexit means for millennials
A rush and a push and the land is ours
You’d be forgiven for relaxing. Four months on, and the sky hasn’t fallen. The economy has continued to grow, and yes, the pound has dropped, but it’s still short of its lowest rank against the Euro back in 2008. Consumer confidence remains not just high, but comparable to pe-GFC levels, and retail sales have stayed strong. The UK doesn’t feel like it’s on any kind of precipice – cultural; political; or economic, and while Brexit continues to dominate political discussion, it does so in the abstract, as the political affair of the day, the new thing to be spoken of in Westminster. And with a supreme court hearing and (potentially) a parliamentary vote still in its way, the reality of Brexit seems further off than ever.
But all is not quite so well. If Brexit is a divorce, it is one which is yet to go to court. Solicitors; tribunal fees; alimony – all these have yet to be paid, and, much to the disappointment of the great and learned teacher K. West, no pre-nup has been signed. In short, the reality of Brexit depends entirely on Theresa May’s negotiating prowess. Assuming the supreme court and parliamentary voting do not conspire to kill the policy in its crib, the Prime Minister will push for a “best-case-scenario” where Britain has trading access to the European single market, but can set its own rules on immigration and product standards. Given that every nation in the EU has veto power over the terms of Brexit, such an outcome seems unlikely, particularly considering their incentives.
Nigel Farage proudly declared that he hoped Brexit would spell the beginning of the end for the European Union. This is precisely what Donald Tusk and his fellow bureaucrats fear. They have strong political incentives to deny Britain a favourable trade deal, and thereby sustain the consensus that staying in the EU is the preferable option for places like Greece and Catalonia, which have flirted with the idea of leaving in the past.
Nor can Britain depend on German manufacturers to come to its rescue by lobbying for a unrestricted trade deal so as not to lose British export revenue. Angela Merkel has made it a feature of her administration to be willing to ignore business’ demands – having implemented a minimum wage, early retirement, and quotas for women despite lobbyists’ objections. Moreover, manufacturers may not even want such a trade deal – Mathias Wissman, president of the German Association of the Automotive Industry described “keeping the European Union together” as “our priority”.
None of this means that a successful Brexit resulting in Theresa May’s much-vaulted “global Britain” is impossible, just that many barriers stand in its way. If things do not go to plan, Britain could find itself subject to debilitating trading costs with its former closest partners; with financial services and business (currently responsible for almost a quarter of the nation’s tax revenue) having fled to now-more-global cities like Frankfurt; Paris; or Barcelona. Either way, the consequences will be most strongly felt by young people.
It’s the best years of your life they want to steal
Millennials voted overwhelmingly to remain in the EU, and it’s not hard to see why. The sheer uncertainty generated by Brexit is probably its greatest risk. We don’t know what the final negotiations will look like; we don’t know how said negotiations will be conducted; we don’t know how business will respond to the process; and, apparently, not even MPs know how the reality of Brexit should be pursued. And for a generation only now emerging into this globalised world as either students or young professionals, such uncertainty is deeply troubling – in many ways.
It’s worth, then, breaking down the ways Brexit affects young people specifically – the direct intersections between millennial concerns and Boris Johnson’s political crusade. This section aims to do just that:
- Universities: University fees will not rise in the next two years. Universities’ incentives are to maintain the £3.7billion revenue brought by foreign students, and have no need to raise fees (thereby driving down applications) at least until Brexit occurs. Even then, their priority will be to maintain an international focus – making it as easy as possible for European Union students to access British education. However, the realities of politics mean that when Britain is no longer part of the EU, EU students will become international students, and a resulting change in fees of some kind is inevitable.
- Employment: Thus far, Britain has avoided recession. But, as described above, the economic future of the nation is uncertain. If trade is hurt by Brexit a recession is unmistakably on the cards. This is bad news for young people. Under 30 year olds commonly bear the brunt of economic downturns – their relative inexperience and low standing within the corporate ladder makes them among the first victims of corporate downsizing, and businesses routinely lower their intakes of graduates during economic turbulence.
The long term consequences are also troubling – research from Harvard and the Universities of Toronto and Columbia has shown, repeatedly, that there exists a sustained income gap between graduates who enter the economy during prosperous and turbulent times. Those who find themselves newly in the job market during a recession can suffer from lower wages for up to twenty years as a result.
In addition, the cyclical unemployment likely to result from such a recession can become structural if Brexit is not carefully handled. If business drifts to more globally accessible cities on the continent, the consequent downturn could create a generation trained for jobs no longer found in the UK. A glimmer of hope here comes in the form of ideas like the one offered by German MP Sigmar Gabriel, who proposed offering young Britons EU citizenship if they chose. Such pathways to European connectedness may prove a lifeline to British millennials, unless the negotiations are handled masterfully.
- Housing: The UK’s housing market has continued to grow in value thanks to a sustained increase in demand which remains unmatched by supply. While some, like Chris Grayling MP, argue that Brexit’s consequent reduction in immigration will create greater opportunities for young people to enter the housing market (by reducing overall demand), monthly mortgage approvals remain at less than half their pre-crisis levels – a factor unlikely to be changed by Brexit’s uncertainty. Indeed, the uncertainty surrounding Brexit could well cause homebuilding to slow as investment ebbs, compounding the difficulty in entering the housing market. Moreso perhaps than any other, the future for young people in housing depends utterly on the nature of Brexit’s negotiations.
- Free Movement: A key argument for Brexit was greater control over the UK’s borders. This means clamping down on immigration, and, consequently, on free movement through the UK’s borders.
All in all then, little good news. The vote on Brexit was proposed by a Prime Minister who never believed in the process. This curious reality means the policy became official before any planning or organisation had been done at all. None of the loudest voices for the leave campaign were national lawmakers at the time – they were lobbyists, and lobbyists do not diplomats make. Such uncertainty leaves many young people asking, in the immortal words of Axl Rose, “Where do we go now?”
Only time will tell.