A Brexit elite of hedge-fund managers, footloose multi-billionaires, rightwing politicians and newspaper proprietors have led the UK into diplomatic and economic margins, Nick Clegg, the former deputy prime minister, said on Thursday.

Clegg who lost his Sheffield Hallam seat in the general election, also suggested for the first time that neglect of public services, including social housing, had made Britons more susceptible to the appeal of populism than other Europeans. This went for Americans too.

Speaking at Chatham House, Clegg expressed his deep frustration at the UK’s plight, saying its negotiators now possessed few cards at the EU negotiating table, and would inevitably have to compromise.

Reflecting on the political limbo in which the UK now sat, Clegg tried to turn the tables on those who claimed a pro-European elite had been defeated in the referendum. He said the true elite were the super-wealthy Brexiteers united by a desire to drive the UK towards a low wage, ultra-flexible, labour force described as “Singapore on stilts”.



Clegg identified the leading players of the Brexit elite as “the hedge-fund managers for whom EU-wide regulations are an overburdensome hindrance to their financial aspirations”.

He added: “[They are also] the owners and editors of the rightwing press, whose visceral loathing of the EU has shaped their respective papers’ tone and coverage for decades; the Tory backbenchers, many of whom still inhabit a preposterous past in which Britannia still rules the waves and diplomacy is best conducted from the royal yacht; a handful of multi-millionaire businessmen who have, in some cases over 30 years or more, bankrolled whichever party, or politician, stands on the most aggressive EU-bashing platform.”

He recognised that this elite had uniquely been able to play on the insecurities of British and American voters, adding that the best way to fix populism was to fix the economy.

Clegg said: “Mainstream politicians of all stripes are failing to deliver on the bread and butter issues that matter to voters. The housing problem in particular has been festering for years, with social housing in decline, too little affordable housing, skyrocketing rents, and an over-reliance on a dysfunctional private sector that has not built enough homes, and not enough good-quality homes.

“Populism has not been defeated in mainland Europe, but it does appears to have been contained. We were told a few months ago that [Geert] Wilders would win in the Netherlands, that Le Pen would take the [French] presidency and pull France out of the euro, and that Angela Merkel’s position was in doubt. None of those things have happened. Yet in Britain, a revolution overturned four decades of EU membership, and in the US a completely unsuitable candidate was elected president.”

He said it was possible that squeezed living standards, and welfare cuts in the wake of the financial crisis made UK voters open to populist ideas. He pointed out: “The UK stands alone as a rich economy that experienced a strong economic recovery in which the real wages of workers fell.”



By contrast, although mainland European states had experienced mass unemployment, “the majority were protected by a generous welfare state and those who did not lose their jobs remained in employment and saw their wages grow”.

It was possible, he concluded, that the much-maligned European welfare model did a better job of preserving a sense of common purpose at a time when British society and politics felt as if they were fraying at the seams.

Describing Paul Dacre, the editor of Daily Mail, as “vile” Clegg said “what he did day after day after day to millions of people is conflate the Mediterranean refugee crisis with violence and terrorism in the European Union. Quite understandably a lot of people said ‘Whoah I am not sure I like that.’ It was cynical, it was untrue and it was devastatingly effective”.

Clegg stressed many factors led to the vote to Leave but added “the British tabloid press used the refugee crisis as an emotional calling guard to voters who were still making up their mind”.

Clegg, one of the British politicians best connected with his European partners, said that in the wake of the last general election Britain faced three possible outcomes in the EU talks: “A disastrous collapse, an extension to the timescale, or a significant softening of the government’s negotiating stance to allow a generous transition period in which many of the features of EU membership continue to apply.”



He said there were already signs that the UK was being bypassed diplomatically as leaders from India and China beat a path to the door of Germany and France rather than the UK.

“Far from increasing our standing in Washington or Beijing, the decision to leave the EU is already seen as a sign of Britain’s decline, pushing us to the margins in international affairs,” he said.