Larry Elliott is an alumnus of Fitzwilliam CollegeAnna Fitzpatrick

Larry Elliott recalls going to bed after instructing his news desk not to ring ‘unless something dramatic happens’.

At 5am, he was woken up by a phone call: ‘get into work as soon as you can’.

While he had been asleep, the UK had voted to leave the European Union. This experience leaves Elliott echoing what is, for many, a painful question: ‘why did nobody see it coming?’

Indeed, with the aftermath of Brexit not correlating with the predictions of the Treasury and the Bank of England, I ask Elliott if the claims of economists are given too much legitimacy. “Oh, absolutely” he begins. “Economics is not a hard science, it’s really more like a form of medieval witchcraft. It’s all about throwing stuff into a pot and stirring it around to see what comes out. When a physicist or a chemist has a theory and it doesn’t work, then they abandon the theory to try something else. When an economist has a theory, they have to build in lots of, often, quite ridiculous assumptions. Then, when it doesn’t work they say ‘let’s carry on anyway’. Or, if you use a different set of assumptions the theory will work.”

“There are people who talk about a return to the 1930's. That was because the people in charge just didn’t realise what was happening.”

He continues: “economists profess to have a knowledge of what’s gonna happen, which is far in excess of their actual ability to make those sorts of predictions. The post-Brexit scenario is just one example of it.”

I ask Elliott if this uncertainty shapes political outcomes. “I think, to an extent, Brexit and Trump reflects the loss of faith in experts”, he tells me. “Partly that’s because politicians make promises they don’t keep. In terms of economists, it’s because they make forecasts that don’t come true.” 

I ask if these ‘miscalculations’ reflect an abstraction by ‘experts’, from what he refers to in his talk as "real life". “We need to stop accusing people who voted for Trump and Brexit of being thick, or stupid or daft” he responds. “We need to try to understand what it is that made them vote that way and do something about it. That means redistribution of opportunity, income and jobs – to those parts of Britain or America which are deeply, deeply hacked off with the way things have been going.”

He continues, highlighting the potential economic reasons for this feeling: “What we’ve seen in the last 30 – 40 years is an incredible concentration of wealth and income among the people at the very top. So, it’s not that surprising that half the country voted for Brexit.”

Elliott is also clear that the populist rhetoric that propelled Brexit and Trump poses a threat to the status quo. “Oh god, yeah. A big threat,” he says. “There are people who talk about a return to the 1930s [when] the people in charge just didn’t realise what was happening,” he tells me. “If you say to people for long enough, that life for you is gonna be really, really tough and don’t offer them a way out, then eventually they will find somewhere else to go.”

“That’s the lesson of the 1930s,” he continues. “If you have a political impasse, then that eventually leads to people looking for more radical economic solutions – which is sort of what’s happening. Certainly with Trump. It may well happen in Europe, too,” he reflects. 

I ask him, then, if Trump’s victory marks the end of neo-liberalism. After thinking for a while, Elliott resolves that he “wouldn’t go that far yet,” before adding that Trump is certainly “shaking things up”. 

“Three months ago, it was assumed that the global order was pretty settled, that it would be impossible for anybody to come and do anything different. Trump is testing that. It’s early days, but everything else he’s promised to do – he’s pretty much done. So you have to assume, that when it comes to his trade stuff – getting tough with China, branding China a currency manipulator, maybe threatening a 45 per cent tariff on Chinese goods – he will do what he’s said. If you have the world’s biggest economy in the hands of someone who doesn’t play by the accepted rules, then that is gonna make a difference.” 

I ask what this will mean for the EU. After laughing at the irony of me trying to make him “do what economists do and give absurd forecasts,” Elliott tells me that he thinks “Europe is in significant trouble”. 

“If there’s no policy change as a result of Brexit, then the people at the bottom will continue to do very badly.”

“I think people are really, really worried about the idea that the American president wants the EU to break up,” he continues. Indeed, referring to the EU’s future, Elliott emphasises that “if [Marine] Le Pen won in France it would start the unravelling of the EU, definitely. Le Pen winning in France is much, much more of an existential threat than Brexit to the EU. If France became a country run by Le Pen,” (he pauses for effect), “It’s curtains.”

So can anything good come of all this? “Oh yeah. Yeah,” he begins, before resolving that “the status quo was not working. The status quo was not delivering and there is an opportunity to do things differently”.

“If there’s no policy change as a result of Brexit, then the people at the bottom will continue to do very badly,” Elliott continues, before cautioning that he is referring to the short term. 

“In the long term,” he says, “it will depend if anything is done to address the big structural problems which have blighted parts of the country. There’s clearly been massive de-industrialisation, a hollowing out of manufacturing in the north of England, Wales and Scotland. As a result of that, Britain is now divided by geography. So, nearly all the wealth and income gains are being made in one corner of the UK. That’s a problem because we have an overheating south east and a very, very cold rest of the country. There needs to be an injection of demand into those parts of the country that need it most.”

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