Photo: Getty
Show Hide image

The Brexit divorce bill shows the EU has taken back control

EU withdrawal has left the UK in a weaker negotiating position than ever. 

Brexit was sold to the country as a benefit, not a cost. Outside of the EU, Leave campaigners boasted, the UK would "take back control" of £350m a week to spend on the NHS. But, as was predictable and predicted, Brexit is proving a cost in every sense. Far from reclaiming £350m a week (a figure that does not take into account the UK's £4.8bn budget rebate and EU subsidies), Britain is forecast by the Office for Budget Responsibility to pay a Brexit penalty of £15.4bn by 2018-19: as much as £300m a week.

As Paul Johnson, the director of the Institute for Fiscal Studies, recently told me when I asked whether the UK would reap a fiscal bounty: "It’s nonsense! It’s always been nonsense. There may be a case for Brexit for reasons of sovereignty, or immigration, or a particular view of democracy – all of that is absolutely honourable. But to pretend that, at least in the short to medium run, it will have anything other than a negative effect on the economy and the public finances is just untrue."

Meanwhile, the higher prices that have resulted from the pound's sharp depreciation are costing the average household £7.74 a week - the equivalent of £404 a year. Finally, there is the Brexit "divorce bill": the payment the UK must make to settle its liabilities (such as EU officials' pensions and outstanding spending commitments). The Brexiteers have never denied that Britain faces such obligations – but they used to insist that they would extract a price. Divorce negotiations, they said, would only be conducted in parallel with new trade talks.Yet having promised a summer-long row, Brexit Secretary David Davis capitulated on the first day. 

The UK now faces making a payment of around £40bn merely to ensure that trade talks begin (Brussels having deemed Theresa May's initial offer of £20bn insufficient). Thus, far from Britain "taking back control", it is the EU that has. The UK may have voted to leave, but it is Europe that will decide how it does. 

Boris Johnson and Michael Gove, the cabinet's senior Brexiteers, are demanding that the UK secure assurances on regulatory freedom before paying a divorce bill. They want Britain to have the freedom to diverge from European economic and social norms.

But with impeccable timing, chief Brexit negotiator Michel Barnier has warned that EU parliaments could veto a new trade deal if the UK breaks with "the European model". The illusion of sovereignty conferred by the referendum has long vanished. When the EU drew up the divorce proceedings it did so with the intention of maximising control. The withdrawal deal that Britain reaches must be approved by at least 72 per cent of member states, representing 65 per cent of the EU’s population.

Once Article 50 has been triggered, the two-year deadline for leaving can only be extended by unanimous agreement. Even the much-maligned European parliament has a pivotal role. Like its British equivalent, it has been guaranteed a vote on the final deal. Perhaps the greatest irony of Brexit is that it has the left UK more subservient to the EU than ever. 

Tory MPs, who have been restrained by historical standards, are already revolting at the prospect of a higher divorce bill. "If we start saying that we’re going to give 40 to 50 billion to the EU, I think the public will go bananas, absolutely spare," warned former minister Robert Halfon. It does not follow that Remainers will benefit. The public may yet blame the EU for "punishing" Britan, rather than the Brexiteers. But, not before time, the magical thinking of the Leavers is being exposed. 

George Eaton is political editor of the New Statesman.

Getty
Show Hide image

What the university staff strike reveals about our broken higher education system

The marketisation of our universities is facing its biggest opposition yet.

The biggest industrial strike ever by academic staff in Britain's universities has begun.

National newspapers are running panicked headlines about what may happen if the strike lasts: “University strike puts final exams in danger”, warns The Times. “University strikes could hit exams and graduation ceremonies”, says the Guardian. But as well as affecting the education of students who are heavily in debt, the strikes will hit academics with very different levels of job security, and university establishments at a time when higher education is on the political agenda. 

The University and College Union voted for strike action last month over a failure to reach an agreement with Universities UK (UUK), the body which represents of the Vice Chancellors of every university in the country, over changes to academics' pension plans.

The pension scheme at the heart of the conflict, the Universities Superannuation Scheme, currently has over 400,000 participants. UUK have stated that the pension scheme currently has a £6.1bn deficit and that the cost of future benefits has increased by one third since 2014. They are proposing a switch from a direct benefit pension scheme (fixed, guaranteed pension payments) to a direct contribution scheme (reliant on stock markets) to maintain the scheme's sustainability.

However, many academics argue the deficit is overstated, and is instead a cynical attempt to reduce the universities' pension liabilties. 

Older and more senior academics who have already spent several decades paying into the system will be less affected by the changes, as contributions will be protected under the old scheme until 2019. 

UCU however allege that this change will result in an average yearly £10,000 loss in staff members' pensions. Academics at 61 universities, including the likes of Oxbridge, UCL, Imperial College London, Cardiff University and the University of Edinburgh will be striking for 14 days. 

The strikes begin on Thursday, and yet no-one seems to know what will happen. FAQs provided by universities to students all appear to have a similar theme: Academic disruption will be minimised, but if you have a complaint, please email us. 

16 percent of academic staff at these universities will be on strike (because most academics aren't a part of a union) but lectures and seminars have still been cancelled. It is still unclear for students whether they will be examined on subjects that they will miss. 

But for the most part, students appear to support the academics. Mark Crawford, a Postgraduate Sabbatical Officer at UCL (the biggest university in the country to strike) says he has been pleasantly surprised by the number of students who have messaged asking him how they can help. 

Perhaps this is due to the pains some academics have gone to minimise the disruption their students will face. Some lecturers have made presentations available online, and have amendeded their reading lists. One academic at King's College London, KCL, has even rearranged her seminars off campus. 

Yet this feeling of goodwill may disappear when reality kicks in. Robert Adderly, a second year Law student at KCL, and a campaigner for the student group provocatively titled “Students Against Strikes” says he’s unsure how supportive students will be once the action actually begins. 

Adderly, while sympathetic to the concerns of the academics does not believe striking is the most effective way to negotiate with Universities UK. He goes on to say that he believes “neither side is willing to compromise” and says that the “only people losing out are students.”

He also says he believes a lot of students “haven’t assessed how they really feel about the strikes” and that the “longer it goes on, the more students who will get angry”. 

Adderly's thoughts are backed by a poll conducted by Trendence UK, a market research company, which found that 38 per cent of students supported their academics on strike, compred to 38 per cent who did not.

Several academics have spoken to the New Statesman off the record about feelings of uneasiness around the strike, arguing that there is a better, less disruptive way of resolving the pension debate. Others are unsure about the leadership of UCU and believe striking will only lead to a build up of work later. 

Professor Andrew Pomiankowski at UCL emailed his students saying while he supported the strike, he would continue conducting his classes this week. He later told the New Statesman “I have a lot of sympathy with the reasons for the strike - the loss of provision of pensions, especially for the younger members of staff. Talking is the only way of resolving this problem. However, I don’t feel that I should disrupt teaching of students. That’s a step too far.”

The strikes go to the heart of the debate about the marketisation of university. Even students who support the strike are in conflict with one another. Notably, students who support the strikes are unhappy with campaigns such as Adderly’s which are also demanding universities compensate them for lost teaching hours. Crawford says your “first instinct shouldn’t be how much am I losing? It should be how much is our staff losing.”

On the other hand, Adderly argues we shouldn’t pretend the marketisation of university hasn’t already happened, saying “It’s here. It’s happening. We are now consumers.” 

Though it appears unlikely that universities will refund students, these strikes are highlighting how our attitudes to higher education have changed in a short space of time, and causing some to ask if this is the future we want for British higher education.