Brexit seems like a massive disaster, but experience in the field tells me this too will pass

The thing that struck me from reading William Keegan’s latest book was not so much who was right or wrong at the time but how things that once seemed alarming have turned out all right in the end

It is going to be a pretty important week in UK politics, for the vote on Brexit in the Commons must rank towards the top end of the political league. But on a long view, is it – or indeed the whole Brexit decision – that huge? Is the division in the country that stark, when compared with clashes of the past? Is the economic disruption the UK potentially faces greater than in, say, the early 1980s?

Conventional wisdom says that this is the most important decision the UK will make since it joined the Common Market in the first place. But I’m not sure.

For some perspective I have been reading William Keegan’s new book Nine Crises – Fifty years of covering the British economy from devaluation to Brexit. Bill Keegan, who I should acknowledge is a friend, has written about his experiences as a financial and economic journalist for a variety of newspapers, including the Financial Times and The Observer. It is essentially about how it felt to be writing about big economic events at the time.

His crises are devaluation in 1967, the oil crisis and the three-day week in 1973, the IMF bailout of the UK in 1976, what he dubs “sadomonetarism” and the Thatcher recession of the early 1980s, the Lawson boom and bust of the late 1980s, Black Wednesday in 1992, the crash of 2007-09, Osborne’s austerity and, of course, the referendum and threat of Brexit.

This is a personal memoir and Bill’s own political take is clear: he would acknowledge that he is a pretty unreconstructed Keynesian. But the thing that struck me was not so much who was right or wrong at the time but how things that once seemed alarming have turned out all right in the end.

Devaluation was a huge political row but with hindsight clearly the right thing to have done. The IMF bailout helped Denis Healey, one of the author’s (and my) political heroes, re-establish financial discipline. The labour unrest of the 1980s is now, mercifully, a thing of the past. And Black Wednesday, when the UK came out of the European exchange rate mechanism, set the scene for the longest growth phase the UK has ever experienced.

And Brexit? Bill Keegan thinks it is a disaster – potentially the biggest crisis he has had to cover. But the message I take from his book is that it is just one more event that will, in a few years’ time, seem no more important that the other eight events he so vividly chronicles.

Yours,

Hamish McRae

Economics commentator