The Brexit environment demands that deliberative democracy meets inclusive growth

What is the connection between deliberative democracy and inclusive growth?

Deliberative democracy and inclusive growth are both concepts which have featured in the pages of Local Economy. Deliberative democracy has at least informed evaluations of local democracy in terms of renewal and co-production in Britain (Ersoy, 2016; Shaw and Robinson, 2007) and in urban USA (Addie, 2009). Elsewhere inclusive growth is in the background of several analyses notably in reference to European economic agendas (Smith and Atkinson, 2011; Talbot et al., 2015; Walburn, 2010). However, reflective of the broader bodies of knowledge, these two concepts have existed in distinct academic debates and disciplines. Academically, what they have in common is that definitions are divergent, without common consensus in the literature. However, as core concepts, the ideas that underpin them are straightforward, superficially attractive and well understood. The contention of this article is that core virtues of these distinct schools of thought represent complementary ideas that can combine as a powerful lens through which to view afresh contemporary developments, notably around the Brexit environment, and lend weight to normative debates about reform. While partial, it identifies both ‘participation’ as the conceptual crossover and a set of high-level virtues which broadly characterise the combined theoretical approach. It argues that for these concepts to prosper systemically, requires them to mutually support each other by combining in practice.

As Chambers (2003) demonstrates in an invaluable review, deliberative democracy comprises very broad debates with differing understanding of the specific meaning of the concept. Early foundational literature was understandably theoretical and idealised (Habermas, 2015; Young, 2011) but centred on the hope that political outcomes can ‘secure broader support, respond more effectively to reflectively held interests of participants, and generally prove more rational’ (Dryzek and Braithwaite, 2000: 242).

This article allies itself closer to the systemic and empirical assessments which characterise recent studies of deliberative democracy (Mansbridge et al., 2012; Owen and Smith, 2015; Parkinson, 2006) to set the examination firmly in real world experiences and systems. This paper does not seek to develop the theory discretely and even though it is empirical in its approach neither does it significantly advance study of its application which is also examined elsewhere (Steiner et al., 2004). Rather this analysis represents an appreciation of the broad concept of deliberation where ‘citizens make political choices freely, following extensive debate and discussion regarding the implications and consequences of those choices, both for themselves as individuals and for the society as a whole’ (LeDuc, 2015: 139). This reflection on ‘implications and consequences’ is essential since it shifts the process from rational choice – where voters simply maximise benefits – to one where citizens take responsibility for political (and economic) choices. This article is concerned with relatively high-level conceptual ‘virtues’ grounded in real life systemic experience. Here it is possible to draw on both Mansbridge (1999: 212) assertion of ‘citizen centred’ democracy and Dryzek’s (2009: 1380) repeated in Stevenson and Dryzek’s (2012: 2) idea that real democratic deliberation involves a system which is ‘authentic, inclusive and consequential’. That is a crucial observation for this discussion since the contention here is that inclusivity should be broad enough to embrace participation in economic growth since a prime function of government policy is to sustain and strengthen output supporting commercial business and enterprise. This conceptual crossover brings deliberative democracy firmly within the sights of the complementary concept of inclusive growth.

The literature on inclusive growth is similarly wide ranging and an excellent overview of its development is offered by Ranieri and Ramos (2013) to which this article is indebted. They demonstrate the parallel early emphasis on conceptualisation rather than empiricism or measurement (Kakwani and Pernia, 2000; Rauniyar and Kanbur, 2010). The literature remains in its adolescence and there is the admission that ‘what we don’t know about inclusive growth significantly outweighs what we do’ (George et al., 2012: 681), lending credence to the extension outlined here. Nevertheless, conceptually useful for this discussion is the emphasis, in some of the literature, not only on outcome but also opportunity; socially, economically and in distribution (Ali and Son, 2007). This is a core idea that has resonance in deliberative democracy since the process of arriving at a decision is an essential part of a good outcome. While much of the focus of the existing body of work applies itself to development (Klasen, 2010; McKinley, 2010), the recent high profile Royal Society of Arts Commission on Inclusive Growth in the UK shows just how relevant the topic is to economies like Britain, particularly in the wake of the EU referendum which it discusses. Defining the concept as enabling ‘the widest range of people and places to benefit from economic success… to achieve more prosperity alongside greater equity in opportunities and outcomes’ (RSA, 2016: 3) there is an emphasis placed not only on aggregate outcomes (‘trickle down’) but also the dispersion. (This research will develop this theme into the comparator of disaggregate experience.) Here there are positive implications for the nature of the local economic environment in which businesses are launched and sustained; jobs created and developed (Sivaev, 2013). This is consistent with other studies and underlines some key virtues to be adopted here. Klasen (2010), for instance, promotes the mutual advantage of inclusivity (or ‘disadvantage-reducing’) where one group does not simply benefit at the expense of another while it should be possible for society’s poorest to secure greater benefits. Nevertheless, the stress in much of the thinking remains focussed on high-level economic structures. While looking seriously at the ‘damaging structural gap between economic and social policy’ (RSA, 2016: 7), for instance, the approach of the Commission remains rather top-down, elite-led. Here, by contrast, the pooled virtues of inclusive growth and deliberation offer a way to finesse the combined concept in a more bottom-up manner, able to draw citizens into the decision-forming process, taking responsibility for decisions such as those that support the business environment, innovation, skills and infrastructure. As such dispersion should also be political with mutual advantage transforming citizens into participants in the process and beyond electoral consumers attracted by the ‘best’ offer.

There is no real agreement on how inclusive growth can or should be measured. McKinley (2010) proposes an index around employment, infrastructure and equity measures while Almeida Ramos et al. (2013) focus on outcomes and the specific impact of growth. Both are useful but are interested in developing economies. However, one indication, so far overlooked by the literature, could be the degree to which citizens are able to participate not only in the proceeds of economic success through the reduction of inequalities but also and just as importantly in the deliberative process of economic and social policy making. While likely to be at least partially more qualitative such an assessment would emphasise the power of the combined concepts. In deliberative terms, this is about more than casting a vote (or even many votes) characterised by rational choice models and instead about engaging in the details of sometimes complex decisions reflective of national, regional and local economic needs and potential.

To work in practice there needs to be more than pleasing theory. Such a model would be reliant on access to information and experts to interpret and guide; there would need to be opportunities to deliberate as well as participate in process as much as outcome. This is not about passing responsibilities from national experts to local amateurs but accepting that ‘while experts may be the best judges of scientific evidence, they have no special claim to finding the right answer about priorities when degrees of risk and trade-offs of costs and benefits are involved’ (Gutman and Thompson, 2002: 158). Expertise remains central but decisions would involve more of those whom they affect (not simply ‘elites’), with citizens expected to take greater responsibility alongside politicians (themselves more accountable to communities) and other stakeholders such as local and national business leaders. Treating voters as consumers, existing democratic experience demands simple answers to complexity – answers that that do not readily exist particularly in terms of economic policy. In this new way, decisions could be more democratically inclusive but also based on persuasion, reason and mutuality; driven much less by populism and ‘post truth’ that characterised the Brexit vote (Hobolt, 2016). It is argued that any shift in favour of inclusive growth cannot fully prosper without a corresponding move towards deliberative democracy (and vice versa). Consequently, these concepts should be considered together. Crossing over at ‘participation’ they can be combined with the creation of a kind of ‘list of virtues’ cherry picked from the mainstream literature outlined here and this is presented in Figure 1.

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Figure 1.

Systemic virtues of deliberative democracy and inclusive growth.

While partial in its view of both concepts, it is suggested that this point of crossover used to combine theories enhances both disciplines. If decisions are to involve those whom they affect, then it is a reasonable extension to include the population more widely in the benefits of economic success. Consequently, it is argued that systems which display these combined virtues can be said to be more deliberative and inclusive politically and economically. As such no distinction is made between a virtue derived from one concept over the other and neither is it claimed that all of these virtues need to be present. Rather this is a broad partial view of qualities common to a combined theoretical approach.

This is a first attempt to capture core virtues of the combined concepts. As such its view is limited but highlights qualities common to each concept in the combined form. The motivation is to keep the crossovers at a fairly simple level. It is not intended to be comprehensive but is presented as an opening provocation to inform the analysis of the Brexit environment set out here and upon which other scholars might build. It also draws on the further discussion found later in this article to capture primary enablers and restrictors to the process and these are included at this stage as further provocation. This section makes the case for combining these two concepts and sets a challenge to others, of how to measure the degree of deliberative and economic participation. While not addressed here, it is suggested that it would need to draw on these virtues to combine the sort of economic measures around the benefits of economic inclusion such as business enterprise opportunity, income, health, skills and education benefits with those of democratic participation and discourse quality.

How does the Brexit environment illustrate deliberative and inclusive shortcomings?

Much has been made already of the social, political and economic divisions revealed by the UK referendum on membership of the EU. The analysis of Goodwin and Heath (2016: 13), for instance, shows that the vote for Brexit was reliant on

citizens who have been pushed to the margins not only by the economic transformation of the country over recent decades but also by the values that have come to dominate a more socially liberal media and political class. In this respect the vote for Brexit was delivered by the ‘left behind’- social groups that are united by a general sense of insecurity, pessimism and marginalization.

The consequence was not only the rejection of advice given by elites but also an anger that meant voter motivation was driven as much by rejecting a jaded establishment as it was in responding to the (near) binary choice before them. The referendum, then, had ‘elite defying consequences’ (Hobolt, 2016: 1272). This included rejecting politicians, economists and big business – though small business was more evenly split on the issue (Guardian, 2016). Political elites comprising professional politicians who do not reflect those they represent have been a source of resentment in the campaigns and the subject of recent academic interest (Barber, 2014a; Cowley, 2012) and are now joined by business leaders and liberal media establishment. Perhaps UKIP Leader Nigel Farage (2016) summed it up himself when he told a reception at the Ritz, planned to celebrate the ‘Brexit victory’ that

when people look back in 100 or 200 years, 2016 will be seen as one of the great historic years - a year of big political revolution. Brexit was the first brick knocked out of the establishment wall and then look what we got on 8 November. The election of The Donald was something of a completely different order.

Since the section largely critiques their absence, rather than simply categorising through a structured model, the approach is to weave the virtues identified in the earlier section into the discussion to analyse the deliberative and inclusive shortcomings of the political and economic system which formed the backdrop to the 2016 EU referendum. It examines the referendum campaign and the broader Westminster model which mitigates against participation in policymaking and deliberative politics, instead resorting to unrealistic rational choice offerings. It questions the meaning of economic success by distinguishing aggregate and more disaggregate levels. It argues that the rejection of the established order owes as much to political as it does to economic participatory failings.

The referendum campaign and the Westminster model

Adopting the ‘take back control’ mantra that would be driven home over the following three months, Boris Johnson’s (2016) first speech in the EU referendum campaign was to label Brussels as ‘demented’ and ‘a club that wastes our money massively, that subverts democracy in this country, takes away people’s power to elect the people who take the decisions, reduces the competitiveness of the European economy, and all for no real economic benefit’. The intention was neither economically or politically inclusive and set the low tone for the referendum campaign that ensued. It also suggested that participatory failure could be blamed on the EU rather than a prevailing Westminster politics which had just delivered on the promise of a national referendum.

There is debate about whether direct democracy is compatible with deliberation since the

deliberative model emphasises the importance of Voice whereas referendums by their nature concentrate on votes. A deliberative model would involve citizens at every stage of the political process, whereas a referendum vote often only brings them in at the very end. (LeDuc, 2006: 140)

If these qualitative assessments show the feeble value of the discussion, Loughborough (2016) media tracker underlines the myopic range of issues debated. Beyond coverage of campaign conduct, the competing negative scenarios about the economy versus immigration dominated through to polling. Figure 2 reproduces in chart form the most prominent issues as reported across all media during the election campaign and shows how little attention a vast number of important issues received. It contrasts these with the activities of House of Commons’ Select Committees in the months following the referendum result. Long accepted as the most deliberative part of Parliamentary work (Mattson and Strom, 1995), it identifies inquiries and sessions instigated by these Committees which reference Brexit in their terms. The breadth of coverage, scope of impact and complexity of issues tackled in the aftermath of the vote diverges starkly with the simplistic messages of the campaign. No less than 36 inquiries and sessions were instigated by Commons’ Committees in the eight months following the referendum result. These are varied politically and economically ranging through the implications for trade, industry, labour market, foreign policy, education, culture and inter-regional relations. The complexities involved in these evidence gathering and reporting processes will be meaningful in different ways to citizens across the UK and yet it is clear that not only did the referendum campaign fail to offer participation in qualitative terms, but it also failed quantitatively.

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Figure 2.

Most prominent issues as reported in all media.

Le Duc, an optimist over the theory that referendums could represent systemic support for deliberative democracy, largely serves to demonstrate empirically through the examination of referendums across the world just how deficient they have proven to be in this respect. Unfortunately the British experience in 2016 only serves to underline this failure. The process did not promote deliberation (through voice or access), concentrated on winning votes and in no real way lived up to the ideals articulated in the research. Alongside this, the experience highlighted the broader failure of the referendum’s setting within the combative Westminster model. This system amounts to confrontational, adversarial politics (Bevir, 2008) which punishes politicians who make unpopular policy with the threat of a replacement from the alternative sat on the opposition benches. As a consequence Oppositions tend to attack unpopularity rather than attempt to improve policy. The model promotes rational choice over deliberation and exaggerates differences between parties even in coalition (Barber, 2014b; Norton, 2013). The consequence is an emphasis on vote amid an arms race of unrealistic promises made to the electorate which in economically precarious times fuels resentment.

There is at least some heuristic evidence about the failure of the Westminster model offered by the experience of the EU referendum and the role of Scotland where Remain prevailed. While devolved Scottish politics cannot be said to live up to conceptual ideals of deliberation, being both still relatively confrontational and relatively controlled by elites, the establishment of the Holyrood Parliament and political discourse since 1999 has at least had the ambition of more deliberation than its Westminster mother (Davidson and Stark, 2011). It is possible to observe north of the border at least a greater correlation between the vote for Remain and a devolved parliament which has a greater priority for deliberative democracy. Here every single Scottish local authority voted Remain. While the data breakdown reflects the sort of divisions experienced in England (for instance wealthy Glasgow North returned 78% Remain compared to 56% in much poorer Glasgow East), ‘ ‘voters’ of all ages and educational backgrounds in Scotland were more likely… to want to stay in the EU’ (Curtice, 2016b). There is no definitive explanation with Curtice himself suggesting the voter identification with the pro-Remain SNP as a possible factor. But there is also the relative weakness of voices such as UKIP north of the border and a devolved politics that is more closely connected with citizens and communities.

There is another less edifying observation. Unlike in the 2014 Scottish independence referendum, Labour’s unwillingness in 2016 to cross party boundaries and even to appear wholeheartedly on platforms with Conservatives did not break down tribal attitudes as had been the case in 1975 when Britain first voted on membership of the European club. Back then Roy Jenkins (1991: 412) was able to celebrate the natural consequence of ‘the encouragement of a coalition of mood if not form’. This time Conservative politicians dominated the media coverage on both sides claiming two-thirds of relevant appearances (Loughborough, 2016). Consequently, in 2016 the entrenched party positions not only harmed the Remain campaign but also further re-enforced the Westminster model which acts as an impediment to deliberation. The divisions demonstrated the absence of mutuality either democratically or economically. They emphasised vote not voice and denied citizens access to the process of making decisions and with it the requirement to persuade deliberatively. The observation is epitomised by the infamous claim by Leave campaigner Michael Gove that people ‘have had enough of experts’. Such failure became clear afterwards with the realisation that there was no plan for leaving the EU and the advanced complexity of issues government now needs to address as is partially reflected in the parliamentary inquiries detailed in Figure 2. This serves to underscore the criticism of the House of Commons as an effective institution for delivering on the demands of government but one which is very poor at deliberation (Steenbergen et al., 2003). In this vein the Westminster model as practiced in the UK has also been successful in ignoring populism with an ‘unspoken consensus’ of ‘no change’ areas even where there is a majority in favour of a proposition whether this be capital punishment, the foreign aid budget or (until now) membership of the EU (Barber, 2016b). Experience now shows that by ignoring such feeling rather than addressing issues deliberatively, only serves to fuel resentment among citizens who view themselves as ignored.

The absence of such deliberation meant that the binary choice made in the referendum did not always represent an intelligent assessment of the debate but rather as an opportunity to express dissatisfaction with the political and economic establishment. Unfortunately this expression has worrying implications for business, jobs, earnings and the broader economy. While again little more than correlation, there is a notable crossover in that the post-Brexit RSA Commission places so much emphasis on the benefits of devolution ‘not an end in itself, but an important part of the means’ through which models of inclusive growth can be created (RSA, 2016: 8). Here are some semblance of the virtues of access and opportunity, choice and persuasion, largely absent in the referendum campaign as a whole but where there is some suggestion of presence in devolved Scotland.

Economic participation and political voice

The consensus that large segments of the British population (particularly outside Scotland and London where a majority also favoured Remain) felt ‘left behind’ by the modern globalised world and had ‘nothing to lose’ by voting to pull the country out of the largest single market in the world, responsible for a considerable portion of UK prosperity, can be juxtaposed against aggregate economic facts that inform central government policy. Economic ‘success’ largely formed the backdrop to the 2015 general election as is illustrated by David Cameron’s claim in the foreword to the Conservative Party Manifesto (the same manifesto that promised a ‘straight in-out referendum’): ‘Over the last five years, we have put our country back on the right track’, he wrote,

Five years ago, Britain was on the brink … Since then, we have turned things around. Britain is now one of the fastest growing major economies in the world. We are getting our national finances back under control. We have halved our deficit as a share of our economy. More people are in work than ever before. Britain is back on its feet, strong and growing stronger every day. (Cameron, 2015)

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Table 1.

Aggregate measure/disaggregate experience comparator.

	Aggregate experience		Disaggregate experience
	Real GDP (2013 = 100)	Real GDP growth	Real per capita GDP (2013 = 100)	Real per capita GDP growth
2007 Q3	98.8		102.6
2008 Q3	97.4	−1.4	101.4	−1.2
2009 Q3	93.5	−4.0	96.1	−5.2
2010 Q3	95.9	2.6	97.8	1.8
2011 Q3	97.0	1.1	98.2	0.4
2012 Q3	98.7	1.8	99.4	1.2
2013 Q3	100.4	1.7	100.2	0.8
2014 Q3	103.5	3.1	102.4	2.3
2015 Q3	105.4	1.8	103.6	1.2
2016 Q3	107.5	2.0	105.5	1.8

Source: ONS.

Despite suffering from the longest and deepest recession since the great depression of the 1930s, the British economy had recovered the output lost after 2008, returning to pre-recession levels in the second quarter of 2013 and GDP per head in the first quarter of 2015. By the time of the 2016 referendum, GDP per head was one of the highest in the world and a new peak having previously retreated. Unemployment fell rapidly to just 4.9% with employment reaching 74.5%, the joint highest since comparable records began in 1971 (ONS). And despite ‘austerity’, nominal public spending continued to rise to £753 bn following a decade 2000–10 when it grew exponentially from £374 bn to £692 bn (HMT). Moreover, despite considerable attention given over to the social as well as economic benefits of economic equality, something which was popularised by Wilkinson and Pickett’s best-selling The Spirit Level (2010) overall aggregate relative inequalities have closed at least marginally (Crossley and O’Dea, 2016). And yet the aggregate data jars with the world that many citizens experience and perceive. Table 1 compares these aggregate measures with the disaggregate experience of many citizens at a local level to highlight that while overall GDP might have recovered, it took much longer for the per capita measure to return to pre-recession levels while real earnings have experienced a long squeeze since the downturn. Elsewhere departmental budgets have experienced a sustained reduction year on year since Chancellor George Osborne began implementing the ‘long-term economic plan’. This has had a disproportionate impact on lower income families and in work poverty levels have worsened. Moreover, there was a noticeable impact on business of all sizes but particularly on SMEs where most people in the UK are employed. Recession in 2008 and 2009 meant that some 800,000 businesses closed while there was a shift in some sectors from secure work to self-employment (DueDil, 2012).

The aggregate message of economic ‘success’ prevailed at the polls and yet the Brexit environment demonstrates just how unconvinced were segments of the population either by the economy or indeed the political process itself. Alas the General Election failed to offer the opportunity for many people to express their voice since the system marginalises deliberation, concentrating on a minority of swing voters. The consequence is that most people vote for losing candidates and the last two majority governments (2005 and 2015) were elected on 35 and 36% of the vote, respectively. Furthermore, with Cameron enjoying a majority of just 12, the six most marginal Conservative seats were decisive. By way of illustration as to the proportion of votes which matter to competing parties in the British system, just 870 votes cast differently in these seats (Gower, Derby North, Croydon Central, Vale of Clwyd, Bury North, Morley & Outwood) could have denied him a majority (being half of the 1740 combined majorities). Most voices do not matter. Decisions are made in the aggregate economically and there is little motivation for broad political or economic participation since the Westminster model relies on relatively few votes and construes parliamentary majorities from largest single minority votes. Such an environment allows for ‘place-less leaders, that is, people who are not expected to care about the consequences of their decisions for particular places and communities, [to] have gained influence in the modern era’(Hambleton, 2015: 168). This is, he argues, a disconnect exacerbated by the economic implications of globalisation. It is a theme that can be found elsewhere in Local Economy. Jones (2010: 376) criticised the ‘stream of centrally-driven programmes or projects aimed at resolving specific problems or market failures in enterprise, innovation, skills, poverty, and urban decline. These have often been too short-term and insufficiently embedded in local structures’. That is decisions about skills, jobs and the enterprise environment that supports business are removed from the local economies in which they exist.

There is quantitative aggregate evidence to suggest that the economic system does ‘work’ for the vast majority of citizens by these measures (most people are in work, can access public services and benefit from redistributive spending), the contradiction is with the disaggregate experiences of large numbers of citizens who chose to reject the very data that drives central government policies since the referendum itself offered a unique opportunity to do so. Table 1 serves to illustrate these divergent measures going some way to evidence the need to bring economic decisions closer to those who experience the implications of policy. The situation was acknowledged eloquently by the Governor of the Bank of England Mark Carney (2016): ‘Despite such immense progress many citizens in advanced economies are facing heightened uncertainty, lamenting a loss of control and losing trust in the system’, he told an audience in Liverpool, ‘To them, measures of aggregate progress bear little relation to their own experience. Rather than a new golden era, globalisation is associated with low wages, insecure employment, stateless corporations and striking inequalities’.

Here the sense of control plays directly into the combined concept of political and economic participation. Wage arbitrage as a result of globalisation and recession has meant stagnated earnings and reduced security for many of those especially in unskilled or low skilled work (Wadsworth et al., 2016). In that way a sizable segment of the population have not been included in economic success or indeed in the decision-making process that devised the economic policies which helped create the Brexit environment. These are the routine workers who believe they have little control over their lives, a phenomenon that according to survey evidence has worsened over a decade (Painter, 2016). This reflection is one of deliberation as well as economic inclusivity. They are the communities which are classified as existing at the ‘base of the pyramid’ (Prahalad, 2009) internationally but whose disenfranchisement can be identified in industrialised society. The RSA analysis demonstrates that in areas where Leave was 60% or higher, there is a correlation with post-industrial towns and cities where ‘people felt left behind by globalisation and decades of ineffective government and regional policy’ (RSA, 2016: 17). Here new business and opportunities for enterprise have not emerged sufficiently strongly to replace the industry of the past. Part of the blame for this must rest with the reluctance to cede decision-making powers downwards. Again Hambleton (2015: 170) notes the dynamic of regional devolution where devolved powers ‘are expected to be accountable in minute detail ‘upwards’ to distant figures in Whitehall when it should be obvious that any sensible system of local democracy requires politicians to be accountable ‘downwards’ to the citizens who elected them’.

These issues reflect the reality that advanced economies such as Britain are facing much harsher global conditions. The UK has gradually moved from being a welfare state to a competition state (Jessop, 2004) but the protracted political dialogue has barely acknowledged this change, remaining firmly rooted in unrealistic rational choice; something which came to a head ushering in the Brexit environment. A fundamental economic deficiency it would appear is a systemic failure to offer either adequate participation in economic growth or in the decisions that lead to the formation of public policy. Instead political elites focus on the aggregate and are incentivised to promise the undeliverable.

The referendum campaign for Leave capitalised on fears over migration and free movement but this is a debate which could have lent itself to both greater deliberation and economic inclusiveness. There is broad expert agreement that migration is good for economic growth and that falls in wages experienced after 2008, and recorded in Table 1, can largely be attributed to the economic crisis and globalisation rather than influx of foreign workers (Wadsworth et al., 2016). Some of the resentment identified in the public, however, can be explained by recent research which demonstrates that while a majority of economic migrants can be classified in terms of being high skilled, only a minority hold high skilled employment which is responsible in Britain for what they describe as a ‘supply shock’ (Dustmann et al., 2016). The research attempts to understand why studies on the effect of immigration on wages reach different conclusions and part of their complex explanation is the problem that allows immigrants and indigenous populations to be imperfect substitutes. Such observation also reflects upon some of the short-term strategies pursued by British business who continue to seek what Finegold (1993) described as a ‘low skills equilibrium’ almost a quarter of a century ago.

Increased labour supply can and does of course increase output but given the appalling productivity growth exhibited in Britain (recorded in Table 1), it suggests that economic policy has been reliant on aggregate labour supply, overlooking the need to invest in skills, aspirations and local needs to connect economic strength with the ability for business or the non-commercial sectors to innovate. Not only is this economically non-inclusive but it also demonstrates little attempt to include such voices in a politically deliberative process. After all, the relationship between low earnings and growth needs to be acknowledged since families which find themselves poorer are less likely to invest in education with the corresponding implications for productivity (Dabla-Norris et al., 2015; OECD, 2014). Here there is a clear connection to a development in the literature termed ‘inclusive innovation’ which is ‘the development and implementation of new ideas which aspire to create opportunities that enhance social and economic wellbeing for disenfranchised members of society’ (George et al., 2012: 663). To this must be added the virtue of voice which has been systemically missing from the Brexit environment.

Institutional failure

The Brexit environment can be viewed as a combined failure of deliberative democracy and inclusive growth. It is no coincidence that dissatisfaction with the economic system has been accompanied by a deterioration in confidence in political institutions. As Davidson and Elstub (2014: 368) attest ‘citizens are becoming increasingly disillusioned, dissatisfied and disenfranchised by the dominant political institutions and decision making processes’. It is an observation which is reflected across mainstream literature over a number of years (Bogdanor, 2009; Stoker, 2006). And for Hay (2007: 197) the explanation is similarly reflective of the impact of economic globalisation since the ‘internalization of the assumption of instrumental rationality on the part of political actors has led, in a variety of policy domains to a series of processes of depoliticization’. This analysis has argued that there is more to the dysfunction than simply identifying some citizens who have been ‘left behind’ by globalisation. More than this, many citizens are unable to participate; decisions are taken by elites while (or as a consequence) growth has been uninclusive. Decisions are made that are in the interests of the country but at the aggregate level and where politicians have to promise increasingly more to win votes. Deliberation by contrast provides opportunities to consider disaggregate experience.

While public debate has moved to the so-called JAMs (‘just about managing’) the veracity must be that the rejection of the EU (or a vote for Trump) was not exclusive to such groups (Curtice, 2016). Plenty of economically comfortable voters rejected the establishment in 2016. It is necessary then to bolster the analysis of economic participation with democratic participation. It is highly instructive that the referendum served voters with an opportunity to voice economic and political concerns that the formal systemic democratic process of a general election a year before did not. Former cabinet minister and Leave campaigner Iain Duncan Smith (2016) unwittingly provided an explanation for this in the small hours of 24 June when he told Radio 4 listeners following the results that the referendum was not like a general election because here ‘every vote counts’. It is a point backed up empirically by Goodwin and Heath (2016) who show that turnout in the most pro-Brexit areas was higher than at the general election and indeed support more intense than previous support for UKIP.

This section has discussed the referendum and the Brexit environment to demonstrate poor alignment with deliberative and inclusive virtues. It is suggested that these failures are ones of systemic and institutional proportions.

Conclusion: What are the implications for policy and systemic renewal?

The failure of the Brexit environment can be viewed as a failure of deliberative democracy and inclusive growth which should be considered as two sides of the same coin. Brought together theoretically, they represent positive and healthy political and economic virtues centred on the idea of participation; useful conceptually to understand the Brexit environment and which offer a normative yardstick by which to determine reform capable of delivering stronger economies, better business environments and engaged citizens in this sphere. Just as Flinders (2010: 67) considered the fallout from the expenses scandal to represent an ‘ultimately wasted’ window of opportunity for more deliberative systemic reform, the Brexit environment which denotes a shock of far more seismic proportions to political legitimacy and economic success, could be the impetus for change so often resisted in the past. In demonstrating the deliberative and inclusive shortcomings uncovered by the EU referendum, this article argues that reform should encompass political systems and economic opportunities.

It is difficult to include the population in the benefits of growth if they are excluded from the democratic process that forms priorities and if there is inadequate deliberation over the implications of economic decisions. It has been suggested here that an important element of inclusive growth is the degree of participation in decision making. Consequently, it is essential to address the concepts together not only theoretically but also practically, in doing so offering weight to reform agendas.

In a very real sense, the literature on deliberative democracy and inclusive growth leans heavily towards the normative since conceptually they envision a more attractive, idealised, world delivering greater social justice. This concluding section is offered in that vein.

The Brexit environment has represented a shock and political elites across the spectrum have been sensitive to the need to respond. Recognising the failures of economic policy making focused almost exclusively at the aggregate, Prime Minister Theresa May (2017) promised a ‘country that works for everyone’ and later a ‘shared society’ of wealth and opportunity. Chancellor Phillip Hammond’s 2016 Autumn Statement was billed similarly as an ‘economy that works for everyone’ and included greater infrastructure spending outside the capital. There is a growing consensus dating back to the coalition that an Industrial Strategy is required to support business prosperity and sustainability in what is a volatile global economy. The final RSA report explicitly connects inclusion to industrial strategy, in particular, raising skills and progression towards the lower end of labour markets. The British government’s response so far is to be seen to be listening more and directing policy to spread the fruits of growth a little further. But it remains a conservative approach, characterised by modest change that will result in the preservation of an established order; importantly the confrontational Westminster model, which this article has argued acts as a block to more deliberative democracy and more dynamic inclusive growth. The failures revealed by the Brexit environment cannot be resolved with small centralised shifts in favour of redistribution or protecting low skilled work from inevitable competition. It is, however, a singular window of opportunity for reform.

Institutional reform to the Commons, Lords and regions has been on the agenda in recent years (Barber 2014b, 2014c; Bogdanor, 2005, 2009; Flinders, 2010; Shaw and Robinson, 2007) and while there have been some developments, significant change has been resisted successfully by the political establishment. The combining of theory in this article argues that what is usually termed ‘constitutional reform’ can be viewed as more than an issue for ‘political anoraks’ as is sometimes portrayed and has implications for economic success, inclusiveness and the vibrancy of regional business environments. Reform to the way we elect and incentivise politicians, which makes politicians more representative and debate more deliberative has the potential to improve participation in economic success. Elsewhere, devolved power would mean greater emphasis on the needs and potential of local economies and mutuality of outcomes. The analysis here has suggested that devolution must be more meaningful than passing power from national to local elites. In one way at least, this article departs from the prescriptions of the RSA in its post-Brexit analysis of inclusive growth. In place of the ‘next generation of Joseph Chamberlains’ (RSA, 2016: 27) with their visionary leadership for regions, it favours citizens assuming real opportunities to participate deliberatively in decisions, themselves assuming greater responsibility for policy and its consequences.

The appropriate mechanisms for combining deliberative democracy and inclusive growth – whether these be in the form of wider public consultation, reform of Westminster, regional representation in policy formation, citizens juries, local chambers of commerce or more complex minipublics – are a task for future research. However, it can be concluded that economic issues, in particular, are complex and usually non-binary. Policy usually means trade-offs and the existence of losers cannot always be avoided. Deliberation does not make decisions any easier but bringing them into the public sphere and involving those whom policies will affect should make them better. This means opening up government to make policy in public, drawing on expertise but emphasising citizens’ voice – all of which weaken rational choice and easy populism to be replaced by a way of transforming economic access.

It is possible to speculate on some of the consequential developments. For instance, it is difficult to conceive of how individuals could participate significantly more either economically or politically in the absence of more responsive and effective education and skills development. This is not simply because complex issues require skills to evaluate properly but also because innovation is essential to future economic prosperity and business growth. It is notable that the areas of Britain most pro-Leave are those with the lowest educational attainment and that those without qualifications were the most likely to vote Leave (Goodwin and Heath, 2016). The unskilled have been left behind by global economic progress where labour is cheaper overseas and there is competition at home from economic migration. Given that manufacturing output in Britain is in a comparable range to that of the late 1970s, but that it both represents a lower proportion of the economy and employs increasingly fewer workers as business has automated, there is limited future or security in low skilled work in an advanced economy. An inclusive economy engaged in deliberation would likely invest in its citizens throughout their lives and facilitate greater opportunities to innovate and improve the UK’s terrible productivity growth. This is perhaps all the more important since the vote to leave the EU in itself cannot address the economic concerns of citizens and many of those who voted Leave are likely to be those hardest hit by the economic consequences of departure.

Rather than the failed centralised attempts at tackling market failures in enterprise that Jones (2010) identifies, consider how much more effective deliberative and inclusive decision making could be in supporting business start-up and growth. Ranging from skills to infrastructure to services, decisions could be more capable of not only supporting business and the diversity of local economies but also sustaining longer term horizons and improving productivity growth. Here it could be possible to realise Sivaev’s (2013) ambition of real engagement with local business to identify growth potential.

Elsewhere, it is possible to conceive of a more deliberate and inclusive approach to addressing ‘housing crises’ experienced in many regions. Rather than the grand plans of central government which fail to materialise or prove inadequate or which serve developers’ needs, a new approach might meet not only the housing needs of local areas but also economic ones. They might be responsible for generating output and incentivising industry to invest in skills necessary to deliver on longer term strategies of regions.

What can be argued economically to be good for the country at an aggregate level but where many citizens in local economies do not recognise the disaggregated benefits to their own lives has been shown by the Brexit environment to alienate politically. The conclusion for this analysis is that to understand and begin to rectify the dissatisfaction expressed by voters in the Brexit environment, is to move beyond questions about raw economic success into a more deliberative appreciation of individuals’ economic lives.

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	Aggregate experience		Disaggregate experience
	Total nominal public spending (TFE, £bn)		Real resource DEL all depts £bn (2016 prices)	Real average weekly earnings £(2000 = 100)
2008	604.0		–	117.60
2009	658.5		–	117.40
2010	692.5		–	115.60
2011	714.1		–	113.70
2012	715.1		–	110.90
2013	730.8		331.54	109.10
2014	735.9		319.93	109.00
2015	746.6		308.06	110.40
2016	753.0		306.87	112.70

Source: ONS; HMT; Archived HM Treasury PESA.

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	Aggregate experience		Disaggregate experience
	Employment rate (%)	Unemployment rate (%)	Output worked per hour	In work poverty (%)
2008	72.6	5.0	−0.7	8.5
2009	70.9	6.3	−1.5	6.7
2010	70.4	7.5	1.2	6.8
2011	70.3	7.7	1.4	7.9
2012	71.0	8.2	−0.8	9.0
2013	71.5	7.7	0.4	8.4
2014	72.9	7.0	0.1	–
2015	73.7	5.0	0.9	–

Source: ONS.