Edit– So the vote came and went. You have probably heard by now that the referendum was squeaked out by leave. You might be surprised to hear that Brexit didn’t happen, won’t happen at least until next year and might not happen at all. So at the moment this is a snap shot of what COULD happen if article 50 gets invoked. Also, we have slightly better idea of some of the variables i.e. Cameron did get canned but Boris didn’t get PM but still have no idea about others i.e. Leave had no plan and still has no plan (as of August). I will do another post on what that means but this post will be left up as is for archiving purposes.
This was to be my longest post. I had spent many hours over the last few weeks researching what would happen to UK archaeology if Brexit occurred. This was meant to be a neutral post simply looking at the economic impact of Brexit on archaeology in the UK, then Thursday came. It started in the morning with one of the Leave Campaigns running Nazi propaganda to win votes and ended with a British white nationalists, assassinating one of the Pro-EU campaigns Members of Parliament, Jo Cox. Needless to say objectivity now escapes me and I have added this next section to express my thoughts.
Good People can do Bad Things
I know what many of you reading this will be thinking. How do I know what you are thinking? Because it is what has played out countless times in America every time we have gun related tragedies, it was just last Monday for the US to have its largest mass shooting in history, outside of a war, 49 dead. The narrative will go something like this:
- The killer was mentally ill. Yes, journalists have found that he has obsessive compulsive disorder, though violence with OCD is rare;
- ‘Britain First’, the UK’s version of the KKK, and other extremist organizations the killer belong to do not represent the views of many who will vote Leave i.e. we are not bigots;
- He was a bad person. Normal people don’t/wouldn’t do this.
All valid reasons to dismiss this event as an outlier and hopefully it will be. But violence and hatred like this is not what scares me. Britain First is quite clear in their hatred of me and in a way that is strangely comforting. We end up in a dark ally together and I know what will happen.
No, what scares me is that I know the vast majority of people that will vote Leave don’t hate me. They don’t hate immigrants, most don’t know any. No, it is the lack of hate that makes me sad. I see it all the time. It is my friends, in my family. I am not eloquent enough to explain it in a single sentence but I think this quote captures it:
‘Daisy and Bill Myers, the first black family to move into Levittown, Pennsylvania, were greeted with protests and a burning cross. A neighbour who opposed the family said that Bill Myers was “probably a nice guy, but every time I look at him I see $2,000 drop off the value of my house.”’
Immigrants, blacks, whites, Christians, Muslims, Jews, pick you hate poison, it does not matter what group it is, they are all ‘probably nice guys’. The Leave campaign has said they don’t hate immigrants. Donald Trump has said he doesn’t hate Mexicans, he even believes ‘some of them are good people’. I believe them and I even believe Trump. I believe my friends and family when they say they are not racist after they post something on Facebook from Fox “News” or Britain First. But, just because they are not evil and don’t hate me does not mean they won’t do bad things to me and that is what scares me.
See Nazis and Hollywood has done a number on us. When you kill millions and wage genocidal war across the globe you are evil, there is no debate about that. But, now we believe that for anyone to do something bad they must be evil. It is portrayed in all of our movies, bad guys are evil and usually great lengths are taken to show that by having them drown puppies or something similar in the movie. Or if they are doing something bad it is because of some traumatic event- a bad guy gets his own backstory about why he is bad… bullying, wife killed, etc. Or they must be mentally ill, no sane person would kill other people, right? Clearly the Joker in Batman is crazy. However, in the real world good people do bad things to other good people all the time. You don’t need to be a hate filled monster or the next Hitler to be an asshole to someone else. The person who cuts you off while you are driving is not the next Pol Pot, they may just be driving tired. The person who cuts the queue is not Stalin, who has for some reason has decided to live in Derby.
You could love your kids, your wife, your husband, your partner, and still do bad things. By all accounts Jo Cox’s killer was quiet and kind to everyone. For all we know he is a good person, all his neighbours and family thought so. He brought groceries to his Mum twice a week. He never spoke ill of his half Spanish brother. He was not a career criminal; no criminal record history has come up yet. From everything we know he was a good person and he was doing what he thought was right. In a world outside Hollywood movies good people do bad things.
If you are voting for Brexit you will be voting for what you think is right. It won’t be because you hate immigrants. It won’t be because you hate Europe. You will be a good person doing what you think is the right thing. You have probably seen enough newspaper articles, Facebook posts, posters, etc. to convince you that it is the right thing… but is it?
I know you have been lied to. I know you don’t trust the politicians, who does? Why would you believe Cameron et al when they say the EU is good? But know this, people who care for you have examined this issue from all angles. People who are not politicians. People who won’t lie to you. They know that some people will be better off because of Brexit but those will be the lucky few, mainly politicians and their cronies. The vast majority of Britains will be worse off with Brexit. It will hurt family members, friends, and probably most everyone you know.
True, we don’t know the future. Maybe 99% of independent experts are wrong and Brexit will “make Britain Great again”. But if the people, who are kept up at night by thoughts of making sure their conclusions are correct, are right than you won’t be on the right side of history. This won’t be WWII when the country looked into the abyss and gave it two fingers. You won’t be telling lying politicians to sod off. No this will be good people inflicting pain on other good people.
And now some archaeology…
Economists have modelled the economic impact of Brexit and based on what we know about archaeology and the economy it indicates in the best case scenario a loss of some jobs and research funding for Archaeology. Though in the case of jobs, HS2 and other large projects may help mitigate commercial job loss, assuming they go ahead (Leave Politicians are against them), but the government and academic sectors would see job losses, some quite significant. That is the best case scenario, and one that is less likely to occur. In a more realistic scenario UK archaeology is looking at a lost decade(s) with 25% reduction in the workforce, including commercial archaeology, and possibly a loss of workers rights for temporary workers. Inflation would also reduce everyone’s wages.
If you are not from the United Kingdom you might not know this but they are about to have referendum, on June 23rd, about staying in the European Union, now referred to as Brexit (Britain Exit). If you are from the UK you probably can’t wait for the idiots to stop talking and vote already (doesn’t matter what side you are on as obviously the other side are idiots). So what, if any effect, would Brexit have on archaeology?
The Heritage Alliance has already published a paper in which they looked at Brexit effects on archaeology/heritage but it really didn’t say much, you can read it hear. For the most part it is just statements of what currently exists and not what will happen. A better review is The Archaeology Forum’s- What does the EU mean to the UK Archaeology sector? They found that following outcomes:
- Loss of access to EU funding for research, tourism & development
- Changes to existing policy programmes which rely on EU funding (e.g. agri-environment schemes)
- Loss of access to EU cultural programmes (e.g. European Capital of Culture, European Heritage Label designations, EU Prize for Cultural Heritage)
- Less say over development of EU cultural heritage policy
- Uncertainty over policies to tackle illegal antiquities trade.
- Possibility to redefine Environment Impact Assessment (EIA) regulations, in line with recent or future domestic planning reform
- Possibility to redefine EU controlled VAT system (e.g. to reduce VAT on building repair)
- Divergence from EU in terms of wider policy on cultural heritage
- Likely loss of some influence in pan-European institutions (e.g. Europa Nostra)
- Theoretical commitment to and influence on Council of Europe Conventions
- European Heritage Days (i.e. Heritage Open Days, Doors Open Days)
- Theoretical ability to engage in European Cultural Heritage Year 2018.
I am not going to rehash all of it but this statement sums up the effect on laws-
‘In terms of European Directives, there would be very little immediate disruption to UK practice. This is because whilst leaving the EU would nullify the legal duty on the UK to implement EU Directives, all such laws are already ‘domesticised’ into UK law and all domestic laws would remain in force until actively changed by the UK government… There are no Directives directly on the subject of the historic environment…’
Basically, very little would change in terms of laws or management of archaeology. What is missing from these analysis are a detailed look at the economic impact Brexit will have on archaeology.
We Are Already in a Recession!
When English Heritage (HE) came out and said their was going to be a shortage of jobs most archaeologists on Facebook sarcastically responded with , ‘oh really, why can’t I find one’. This was mainly because most archaeologists, or potential archaeologists, failed to actually read the EH research and just read the newspaper headlines. Read the research here. That research looked at future projects and then estimated the number of archaeologists needed for those projects. Basically, they estimate that £1 billion of ‘new work’ construction spending generates between 19 and 25 FTE (Full time equivalent i.e 25 full time or 50 half time) positions per year or it results in 41 FTE per year, depending the on the methods used. So something like HS2 would result in 950 to 2,050 archaeology years, or if the archaeology takes three years, 300-600 archaeologists being employed full time during that period. BUT what was missing from the newspaper articles was that this is an estimate from 2016 AND forward, mainly 2017 and onwards. There is not currently such a dramatic labour shortage, but there could be. However, currently archaeology is in a bit of a recession because construction is slumping. It is down 3.6% in the first quarter of this year. Planning permission applications were down 1% from the year before in England and Wales in the first quarter of this year. Overall this has not translated into a loss of jobs but the dramatic 20% increase in jobs seen in commercial archaeology in 2014-15 is probably not going to be sustained, basically we have levelled off in hiring.
Yes, Brexit has not even happened and it is already affecting us. Construction, the main driver of archaeology, is very capital (Money) intensive work. Large housing estates cost millions, if not hundreds of millions of pounds in investment. Large infrastructure projects like HS2 = £60+ billion. With an uncertain economic climate caused by Brexit most people are keeping the powder dry to see the outcome before investing millions in building houses that people might not be able to afford. I have talked with several Commercial Units and this is the general consensus – there is still work for archaeologists but it is mainly small stuff and things already in the pipeline, everyone is waiting and seeing what will happen before going forward with larger construction projects.
Already in the lead up to Brexit:
- The markets are going a bit mental with the prospect of Brexit. The Stockmarks around the world were falling because the polls when showing Leave ahead and then jump back up when Remain gained ground.
- The pound is more volatile than it was during the economic collapse of 2008/09 and has gone from roughly the $1.55-50 range to the $1.40-1.45 range.
- £65 billion has been taken out of the UK in the first quarter of the year- this explains what is happening.
- German bonds turned negative last week when Leave gained in the polls, which meant people would rather pay Germany money (negative rates on bonds means you lose money) than invest in anything else.
This is just the harbinger of things to come. Archaeology will be heading into Brexit with some recovery in 2014-15 but a weakening position at the beginning of 2016 due to less construction work.
The impact of Brexit will come is several waves due to how the exit could occur. According to Article 50 of the Lisbon Treaty, after the UK informs the EU of its intention to leave the EU will put together an exit deal for the UK. The UK can then accept it or leave. Or, and this seems most likely, if two years pass the UK is automatically kicked out even if no deal is in place. So there will be the lead up to the vote, the aftermath of the vote and then the ‘deal’ or the two year mark, whichever comes first, which will impact the economy and these will make up the three waves of Brexit.
June 24th and right after
The general consensus is that Cameron will invoke Article 50 and:
- The pound will lose 15-30% of its value;
- Taxes will go up and we will have two more years of austerity;
- Cameron will lose his position as Prime Ministry;
- Investment in the UK will fall;
- The Stockmarket could lose 25% of its value.
Now these factors and their interactions with each other will be complex and not necessarily straightforward. For example, the loss of a third of its value for the Pound will mean that British goods and services will be cheaper for other countries to buy. Though depending the deal that is stuck there could be tariffs which cancels out this benefit. Moreover, the problem with falling value of money is that imports cost more. The UK imports 45% of its food and those prices will go up. They won’t go up 15-30% as employers will fire people to cut costs and keep inflation down but we will be looking at pretty high inflation. Most economists estimate 3-5% inflation in the years right after the vote (see table below for estimates of impact). That could mean that the Bank of England will have to raise interest rates to keep the pound from collapsing and inflation getting out of control. Higher interest rates means fewer people will buy homes and build stuff, ergo less work for archaeologists.
Economists have created models to account for all these variations. Most have been completed by independent bodies and some from partisan ones. Though all but one of them agree that the first two years after Brexit will see a recession. What they don’t agree on is how bad it will be. You probably won’t be surprised to know that the one dissenter is the Economists for Brexit. All the non-partisan estimates have a loss in GDP and there are some significant problems with the positive ones i.e. their maths don’t work. Also, the EfB analysis is a book that one must buy to read about the impact while everyone else has posted their analysis for free. The sceptic in me thinks someone is trying to make a buck by selling people what they want to hear.
Here are some of the estimations of the impact of Brexit on the economy and GDP in the first two years after the vote based on if the UK will be part of the European Economic Area (EEA), get a Free trade deal with the EU or default to the World Trade Organisation(WTO) rules (I will explain more below):
|Dynamic EAA/FTA||–6.3 to –9.5|
|EEA||–3.4 to –4.3|
|FTA||–4.6 to -7.8|
|WTO||–5.4 to -9.5|
|OECD||WTO/FTA||-2.7 to -7.7|
|EEA||-1.5 to -2.1|
|FTA||-1.9 to -2.3|
|WTO||-2.7 to -3.7|
|Oxford Economics||FTA||-0.1 to -3.9|
|Open Europe||FTA||-2.2 to 1.6|
|Economists for Brexit||WTO||+4|
What Do Economists Know?
Unfortunately, I have heard too many people scoff at the professionals, asking, ‘what do they know?’ I think this image I came across on Twitter neatly sums up the general consensus on the numbers:
Taking the rough average of the different models we would see that there would be recession of roughly two years that takes 2-2.5% off the GDP, in the best case scenario. So how will that effect archaeologists?
Edit- Prediction vs Modelling
This comment came in on BAJR forum- “The financial analysts predicting post Brexit doom and gloom recession are probably the same ones who completely failed to predict the last one.”
I would like to clarify that no one can do prediction. You can’t predict something like the black swan event that caused the last global recession. However, you can model with knowing certain facts. To use an archaeology analogy. You do a desk-based assessment. You look at an old OS maps and see that there were buildings on your site 100 years ago. Now you could excavate and find that they were completely wiped out and removed. However, you budget for finding at least foundations and artefacts. What artefacts? You can’t predict exactly that you will find 32 buttons but 99 out 100 times you will find something. This is modelling. You can’t give exact predictions but you can give ranges of possible finds and thus you budget your project accordingly. This is financial modelling- we can’t say GDP will fall exactly 2.58674% but we can say it will fall within a range and be correct.
In the last recession the UK lost 7.2% of the GDP and we lost 1/3 of the archaeology workforce but academic and national government losses were minimal (Historic England losses were delayed but are happening now because of austerity) so in the commercial sector the actual losses were much higher roughly 40%. So adjusting for a 2% loss in the economy will mean we are looking at 10-15% loss in the workforce, 500-700 jobs. Now here is rub some of those estimates are loss of GDP against what would have happened. Thus if GDP was to grow at 2% instead it would be negative 0.5% (+2% it would have been – 2.5% = a shrinking of economy by 0.5%). So that is not necessarily a reduction in the work force but that those 500-700 opportunities that could have been would never be and a possible loss of 100 jobs. BUT, this is a best case scenario. It is likely to be much worse so keep reading.
Britain’s Trump and HS2
Cameron would have lost the referendum and thus most likely lose the PM. Actually, even if he wins the referendum he might be turfed out by his own party. Boris Johnson is the bookies favourite to be the next PM. This is the man whose own party refer to as the British Trump. Congrats UK! Before America even has the chance to vote on Trump you would have installed your own.
The important aspect of this is that Boris has been critical of HS2. Mainly, because his father had to sell one of his mansions. Also, UKIP is opposed to HS2. Politically, there will be very little will to see HS2 to start. Yes, there was an act of parliament to create if but that can be revoked just as easily by an act of parliament. As will be discussed below there will be some pretty big holes in the budget and cancelling Hs2 will be a distinct possibility to plug them. This means that any boost from Hs2, possibly 900-2000+ person years, might not happen which could have offset the losses from a down economy.
Type of Construction Matters
Currently, 40% of commercial archaeology work is for residential construction work. In fact, if we look at housing construction it matches the number of archaeologists employed pretty well. (Remember that commercial archaeology makes up the majority of archaeologists in the UK and so changes with them reflects the whole profession)
Figure 1: Number of Archaeologists employed. For reasons too long to go into detail here those numbers before Dec 2012 need to be adjusted down a few hundred so the the actual drop is not that great. Source.
Figure 2: Seasonally adjusted trends in quarterly housing starts and completions, England. Source.
After housing the next largest contributors to commercial archaeology are 25% for commercial and Industry, 6.7% energy, 6% transport and various other types of work make up the rest.
Sources of commercial archaeology funding. Better image in the report here.
Housing has yet to reach its pre-recession levels. It is the highest it has been in 6 years but a recession would knock it down. Big infrastructure projects help but they are not always a big driver of archaeology. Take Energy, it only makes up 6.7% of current work but in the Historic England estimates of new work between 2015-33 it is £274 billion of the £465 billion total. The problem there, and why the numbers are currently so low in terms of current work, is £45 billion of that is for nuclear plants which are incredibly expensive to build but require very little archaeological work. The large infrastructure projects examined by HE will contribute to jobs but they need to be the right type of work. Archaeology is mainly driven by housing construction. 2/3rds of funding comes from the private sector.
Even with all the new big infrastructure projects coming online when breaking down rough calculations of what actually drives archaeology it is unlikely that we would be short 3000 jobs. It is private sector funding that will employ the most archaeologists and it is this funding that will be hurt the most during a recession; housing will fall. The high inflation will cause the Bank of England to raise interest rates further depressing the residential market. The large infrastructure projects may help offset losses but a recession would mean no growth in jobs. No pressure to increase pay.
Taxes and Austerity
The recession will mean that there will be less tax revenue and thus a larger hole in the budget. Interestingly, instead of going 100% austerity the Government has said it will be a mixture of higher taxes and austerity. So we will all pay higher taxes, less money to spend, and Council Archaeologists and those working for Historic England will see more job cuts. We would be in for another 2+ years of austerity. A rough calculation is that for every 1% loss of GDP about 16 billion in taxes are loss. So depending on the severity of the recession you will be looking at £30 billion+ in more austerity/higher taxes based on the estimated 2% loss in GDP. It is important to remember that costs go up and if the economy goes not grow then there is a still a loss in funding as the same funding much cover more.
What About the EU Money?
The Brexiters claim the UK sends £350 million a week to the UK and that is incorrect. After a rebate and the money going back into programs the UK sends £6-8 billion to the EU yearly, £120-180 million weekly (it’s actually hard to calculate the exact amount). They have already promised to spend that money on the NHS. So that means it won’t plug the hole in the budget.
The already depleted council archaeologists, HERs/SMRs, etc. will take yet another hit from austerity. The Northwest has already got rid of one of their HERs, well the council running it. Expect more council cuts. Most big heritage charities would be hit as the government gives block grants to them. You probably didn’t know this but the Churches Trust is support through a Historic England grant and Archaeology Scotland through a HES grant, not 100% of their funding but enough that losing that money would significantly degrade their capacities. We would go through another round of belt tightening with more significant degrading of heritage services and hurt the archaeology charities.
This will cost jobs probably another 100-200 government jobs will disappear based on what happened in the past recession.
Roughly 40% of external funding for archaeology research at UK Universities comes from the EU i.e. grants not student fees which support roughly 280 positions (EU and other sources). This is the data from the Higher Education Statistical Agency on the external funding for the Archaeology Cost Centre:
|BIS Research Councils, The Royal Society, British Academy & The Royal Society of Edinburgh||4,552||19.9%|
|UK-based charities (open competitive process)||2,047||8.9%|
|UK-based charities (other)||891||3.9%|
|UK cent govt bodies/ local auth, health & hosp authorities||1,320||5.8%|
|UK central government tax credits for research and development expenditure||8||0.0%|
|UK industry, commerce & public corporations||3,873||16.9%|
|EU govt bodies||8,736||38.1%|
|EU-based charities (open competitive process)||1||0.0%|
|EU industry, commerce & public corporations||3||0.0%|
|Non-EU-based charities (open competitive process)||327||1.4%|
|Non-EU industry, commerce & public corporations||13||0.1%|
If we assume the average post doc/researcher costs £50,000 (30-40k in salary and then overheads) that would mean the loss of 175 positions- full time, the actually number will be much greater as this covers many part time positions, Even if we bump up that number to £100,000 per position in costs than we are still talking the loss of roughly 90 FTE (full time equivalent) out of 660-700 positions. So 10-15% reduction in academic positions for Archaeology. If you thought it was bad when you had a 3x better chance of dying of cancer than getting a permanent position at a UK University, wait until they axe 90 some positions.
Oh yeah, and 40% of research projects will vanish… or would it? A portion of the spend on the EU goes back into the UK via these research grants, farming subsidies, etc. So the total bill to the EU is actually in the range of £14-16 billion. In theory, that money could be put back into research. Essentially, keeping the same level of funding just moving it around. However, there is the issue of £30 billion+ budget hole. Also, the part where the Leave campaign has promised £100+ billion in funding out of the EU pot of money which is only £6-8b net. The maths do not add up and so expect this money to disappear and never come back.
Roughly, 7-8% of students are from the EU and there could be fewer of them. This will especially hit Scotland where EU students don’t pay fees for undergraduate, just like the Scottish students. This could be made up by more international students as the pound losses much of its value (see above) and a degree in the UK becomes cheaper. Expect more Americans and fewer European students but the numbers to not change significantly. Though any xenophobic events or changes in Visas with Leavers in charge of the UK will probably result in fewer students.
Edit– Another consideration, one raised by Anna on Facebook, is that UK students may lose opportunities to pay local tuition rates. Dutch, Scandinavian and many German Universities teach courses in English. They also have much lower fees for EU students, only 1,984 euros in Netherlands, than English Universities i.e. £9,000. It might be the only affordable education option for English students who are looking to study archaeology and this would be loss with Brexit. It will differ from country to country but any country that has a different tuition rate for non-EU students 6-12,ooo for Netherlands will now apply to UK citizens.
The Third Wave
This is what happens when the UK leaves the EU in two years time and the trade plans in place. So the estimated recession would not be pretty for archaeology but not a disaster. Jobs would be loss and research funding would be cut. 3-5% inflation would eat away at wages… which brings me to a huge gaping hole with the Leave campaign- they have no plan! When Scotland was considering independence they released hundreds of pages of White Papers about what could happen. Leave has released a… Leave has released …. Leave has… no plan. There is no universal plan of what to do after a yes vote. There are ideas, most contradictory, but no firm plans
There are several options for when the UK leaves the EU for dealing with trade i.e. keeping the economy going- it joins the European Economic Area (EEA), it creates its own EU-UK trade deal or it defaults to World Trade Organisation (WTO) rules. The UK has no say it what will happen. The EU sets the terms of the leaving. So they could offer the UK an EAA membership or they could offer nothing. Of those options the EEA will have the least economic impact while the WTO rules will have the worse (see table above).
The Boris Immigrant
The Leavers are mainly pushing the middle option, free trade deal. They point to Switzerland as an example of a country that is not in the EU but has a trade deal. However, the problem with joining the EEA or getting a Norway/Switzerland deal is that the UK still has to pay into the EU. Economists estimate the UK will pay the same as now and the UK will still have to follow most EU regulations and have not vote in deciding those regulations still pays into the EU. Oh, and they have free movement of people too i.e. ‘no control over their borders’. Norway, Iceland, Switzerland have to let EU citizens into their countries. This would provide a huge problem for the Leave campaign as most of their support comes from people’s fear about the Boris Immigrant. You know the immigrant who is both living on benefits while unemployed AND stealing your job. It would be politically impossible for Boris Johnson to accept any sort of deal on immigration and still keep his job. Which means these first two options are non-starters.
But, but, but…
The argument I have heard is that the UK will be able to get a trade deal and not have to accept free movement of people because we are such a big economy. The UK makes up roughly 5% of the EU’s trade while the EU makes up roughly 50% of the UKs. They have the negotiation advantage.
But that actually does not matter because if the EU gave into the UK it would mean the collapse of the EU. If a country can get a better deal by leaving the EU than why would a country stay? All countries would leave and the EU would collapse and with it the world Economy. It makes up 25% of the world’s economy and to have it collapse in go into a recession would essentially restart the Great Recession. Archaeology would suffer even more then, along with the rest of the world.
Given the choice between the collapse of the EU and giving the UK what it wants what would the EU choose? Actually, we know how this turns out because it already has. Switzerland had a referendum to close its borders and voted to do so. The EU did not even acknowledge it and said closing borders meant Switzerland loses all its trade deals. Guess what? Switzerland still has free movement of people. Greece voted to reject the bailout terms in a referendum, again an aspect that would have trigger a second depression- Greece has a bailout and austerity, with worse terms than before.
Voters can believe that the EU will cave but given a choice between its collapse and smacking around a smaller country the EU will always give a nice broadside to the face of that smaller country… good people, bad things, and what not.
It Will Probably Be Worse
This means defaulting to World Trade Organisation rules on trade. Except it wouldn’t. This is an except from a talk by the head of WTO–
“In addition, the UK would also need to re-establish its terms of trade within the WTO. The UK, as an individual country, would of course remain a WTO member, but it would not have defined terms in the WTO for its trade in goods and services. It only has these commitments as an EU member. Key aspects of the EU’s terms of trade could not simply be cut and pasted for the UK. Therefore important elements would need to be negotiated. There is no precedent for this — even the process for conducting these negotiations is unclear at this stage.
I can say that negotiations merely to adjust members’ existing terms have often taken several years to complete — in certain cases up to 10 years, or more. However, as far as the UK’s case is concerned, it is impossible to tell how long it may take.
Upon leaving the EU, rights that the EU secured for its members would arguably no longer automatically apply to the UK. This includes the right to restrict certain aspects of the free movement of people and to protect public utilities from competition. The UK might need to negotiate with other WTO members to maintain these rights. No WTO member can unilaterally decide what its rights and obligations are.
I don’t have a crystal ball to assess the outcome of these various different negotiations — and nor does anybody else. The only certainty is uncertainty. However, I have spent my life as a trade negotiator and now as WTO Director-General it is my job to broker trade deals between nations, so I can try to offer some insight. To begin with, I would say that trade negotiations are highly complex. Conducting multiple negotiations simultaneously would bring a further level of complexity. In addition, you need willing partners. Other countries already have their negotiating priorities and may not be ready to shift resources to a new negotiation overnight. Of course, speaking of resources, all of this presumes that your own resources and negotiating infrastructure are already in place and fully operational. Moreover, if you need to complete a deal quickly when the other side can wait, you are negotiating from a very weak position.
So, on this basis, it could take quite some time before the UK got back to a similar position that it has today in terms of its trading relationships with other countries.”
The UK would see the end of two years with no trade deals which means that the economy will suffer. The 2% was an average for best case scenarios. Go back and look at the chart above. The UK might be looking at a recession in the range of 4-9%. This is possible actual loss of GDP in the 4% range (2% growth that would have been – 6% = 4% shrinking of the economy). With the lost recession, in the range of -6 to 7% loss of GDP, taking out 1/3 of archaeology jobs, decimation of services, etc. we are probably looking at real loss of a quarter of archaeology jobs. Furthermore, an estimate for every year the UK does not make a deal with the EU it will see a reduction of 1% of its GDP. This pain could last for a long time.
This is What Lost Decades Look Like
In all likelihood the UK will be turfed out of the EU in two years with no deals in place and the WTO rules would not be in effect. Basically, the UK will be facing higher tariffs , a collapsed pound which means higher inflation, higher interest rates and mass uncertainty about its future. What will this look like for archaeology? We actually have a pretty good idea of what lost decades look like for archaeology in island countries. This is the amount spent on Archaeology when it when into its lost decade in the 1990s and into 2000s, notice even after Japan’s economy started to grow again in the mid-2000s archaeology did not:
Spending on Archaeology. Top line total. Middle line private sector. Bottom line government. Okamura, K. 2008. Archaeological Heritage Management at the Crossroads: A case from Japan. Paper presented at the World Archaeological Congress – 6, Dublin, 30 June 2008.
Long Term Gain, You Mean the Loss of Worker Rights?
Almost all of the economists see a long term loss to the economy. So this will not be a short term pain that will be rewarded by a long term reward. No both short and long term pain. The only possibility of a better economy in the long term is if the UK scraps holiday entitlements and protection for temporary workers, who make up 30-40% of archaeologists. This is what happens in the economic models the predict Brexit will be better for the economy in the long term, but still bad in the short term. So yes by 2030 the economy may be 0.5 GDP better off but 30-40% of the archaeology workforce would have lost worker rights, like equal pay and working conditions to those who are permanent employees if you are a temporary employee, and 100% of everyone would have lost holiday entitlement. Did you think working conditions were bad for diggers now?
If the “UK” votes to leave it will most likely trigger a constitutional crisis, mainly because the UK doesn’t have a written constitution. All the polls show that Scotland, by about 2 to 1, will vote to stay. Because Northern Ireland is a world onto itself no one polls it often and it is hard to know how that will vote but the few polls show it voting to stay. Currently all the Republican parties are pro-EU and the Unionist mainly anti-EU, which in generally not a good sign and why some people mention that a Leave Vote would trigger another war in NI. Except, the Ulster Union Party came out against Leave. Thank goodness for that as it takes some of edge off of sectarianism but it will mean that Northern Ireland will likely vote to stay. Which could leave 2 of the 3 countries in the Union voting to stay (Wales was conquered and so did not join as a country but as part of England, but it could also vote to stay).
What does this mean? Could it be that only England exits the EU, an Englixt? Exit?, or will the UK fall apart as a country? We don’t know. Though with the pain mentioned above it will be a lot easier for the SNP to have a second independence referendum. What is the worse that could happen? The UK’s economy is already sinking and so goes a major concern about #Indyref. Which means that there will be lots of uncertainty about what will happen. Uncertainty means prolonged misery as people won’t invest in a country that might implode.
Outside the realm of possibility or is it?
Some people have discussed that Brexit could lead to fighting in Northern Ireland again. A lost decades will not be great for social cohesion across most of the UK but that seems very unlikely. As much as I think the irony of Greece sending troops to help protect the British Museum will be lost on no one, it is probably not going to happen. Yes, I know Greece is in no financial shape to send troops but I suspect they would find the money to send an expedition to London to help safeguard ‘the World’s Heritage’.
Edit– it light of the recent political assassination I may need to revise up my estimations of violence. Suddenly, it does not seem like such a distant possibility.
So in summary, Brexit will either be bad for archaeology or really bad for archaeology.