One week ago, against the advice of its political establishment, Britain narrowly voted to leave the European Union. Within a few days, that establishment was in the process of a full-scale implosion: the country is effectively without government or opposition, shorn of leadership, bereft of direction. As the pound crashed and markets tanked, the chancellor of the exchequer went missing for three days while Boris Johnson, the most prominent member of the Leave campaign, spent the weekend not sketching out a plan for the nation’s future, but playing cricket and writing his column for the Telegraph. Having asserted its right to sovereignty, the country can now find nobody to actually run it.

Meanwhile, the very prize won in the referendum – to leave the EU – remains unclaimed. Article 50 of the Lisbon Treaty sets out the process for leaving the EU. Once invoked, a country has two years to negotiate the terms of the divorce. But no one will touch it. Prime Minister David Cameron, who led the losing campaign to remain in the EU, announced his resignation within hours of the result, insisting that his successor should be the one to pull the trigger. Johnson, who is favoured to replace Cameron, protests that there is “no need for haste”. During the campaign, our departure from the EU had many proud and pushy parents. In victory it is an orphan.

Cutting the figure not so much of a failed state as a state intent on failure, the nation’s credit rating was downgraded, its currency devalued and its stock market depleted. On polling day the Leave campaign reminded us that we were the fifth-largest economy in the world and could look after ourselves. By the following afternoon our currency was sufficiently decimated that we had fallen to sixth, behind France.

Brexit: a disaster decades in the making Read more

In the ensuing panic, some politicians argued that we could simply ignore the referendum result: David Lammy, the Labour MP for Tottenham, suggested it was “advisory and non-binding”, and urged parliament to call another referendum, in order to avert economic catastrophe. A huge number of people petitioned the government to do the same – while the eminent barrister Geoffrey Robertson insisted a second referendum was not necessary to overturn the result: parliament could just vote it down. “Our democracy does not allow, much less require, decision-making by referendum,” he wrote. “Democracy has never meant the tyranny of the simple majority, much less the tyranny of the mob.”

It was argued that we could not leave the final word on such momentous decisions to ordinary voters: they didn’t know what they really wanted, or they had been tricked into wanting something that would hurt them, or they were too ignorant to make informed choices, or maybe they quite simply wanted the wrong thing. A significant portion of the country was in the mood for one big do-over – a mood enhanced by considerable class contempt and the unmistakable urge to cancel the universal franchise for “stupid people” incapable of making the right decisions.

Everything had changed – we had decided to end a more than 40-year relationship with our continental partners and the consequences were far-reaching. In Scotland independence was once again in play; in Westminster, resignations from the shadow cabinet came by the hour; in the City, billions were wiped off by the day. Indeed, one of the few things that didn’t budge was the very issue that had prompted it all: our membership of the European Union. The only thing we know for sure is that we don’t know how and when we will actually leave it. We are simultaneously in freefall and at a standstill, in a moment of intense and collective disorientation. We don’t know what is happening and it is happening very fast.

But the only thing worse than the result and its consequences is the poisonous atmosphere that made it possible. The standard of our political discourse has fallen more precipitously than the pound and cannot be revived as easily. This did not happen overnight, and the sorry conduct of the referendum campaign was only the latest indication of the decrepit state of our politics: dominated by shameless appeals to fear, as though hope were a currency barely worth trading in, the British public had no such thing as a better nature, and a brighter future held no appeal. Xenophobia – no longer closeted, parsed or packaged, but naked, bold and brazen – was given free rein. A week before the referendum, an MP was murdered in the street. When the man accused of killing her was asked his name in court he said: “Death to traitors, freedom for Britain.”

On the day after the referendum, many Britons woke up with the feeling – some for better, some for worse – that they were suddenly living in a different country. But it is not a different country: what brought us here has been brewing for a very long time.

The thing people often forget about Aesop’s fable of the boy who cried wolf is that in the end, there really was a wolf. Indeed, the story wouldn’t have its moral if the wolf didn’t show up and ravage the shepherd boy’s flock. Lying has consequences that last far longer than individual acts of deception: it ruins the liar’s ability to convince people when it really matters.

The source of the mistrust between the establishment and the country isn’t difficult to fathom. Next week the Chilcot inquiry will publish its findings into the Iraq war. After Iraq, we faced an economic crisis that few experts saw coming until it was too late. Then followed austerity; now the experts said this was precisely the wrong response to the crisis, but it happened anyway.

Facebook Twitter Pinterest Boris Johnson the day after the EU referendum vote, which his leave campaign won. Photograph: Reuters

When leaders choose the facts that suit them, ignore the facts that don’t and, in the absence of suitable facts, simply make things up, people don’t stop believing in facts – they stop believing in leaders. They do so not because they are over-emotional, under-educated, bigoted or hard-headed, but because trust has been eroded to such a point that the message has been so tainted by the messenger as to render it worthless.

This was the wolf we were warned about. It is now mauling our political culture and savaging our economic wellbeing. We were warned of it by leaders in whom we had no confidence. So we all chose the facts we liked, and we all suffered. The wolf does not discriminate. As Aesop reminds us at the end of the fable: “Nobody believes a liar, even when he’s telling the truth.”

When leaders choose only the facts that suit them, people don’t stop believing in facts – they stop believing in leaders

This distrust is both mutual and longstanding, prompting two clear trends in British electoral politics. The first is a slump in turnout. In 1950, 84% of Britons voted in the general election; by last year it was 66%. The decline has not been uniform, but the general trajectory has been consistent. Between 1945 and 1997 turnout never went below 70%; since 2001 it has never reached 70%.

The second is a fracturing in political allegiance. For most of the postwar period, British electoral politics was effectively a duopoly. In 1951, 97% of votes were cast either for Conservatives or Labour. By last year, the combined total was 67%. Fewer people want to vote, and fewer voters want the two major parties. With a first-past-the-post system, designed to ensure that one of those parties wins a majority, our governments now preside with diminished legitimacy over a splintered political landscape. Cameron’s Tories were elected last year with only 24% of the eligible vote. In 1950, Winston Churchill was defeated even though 38% of eligible voters backed him.

These trends had similar consequences for the tactics of the two major parties. Under Cameron, the Conservatives, who had lost two prime ministers to the question of Europe, were able to abandon the most nativist elements of their base in order to pursue votes in the centre, rebranding themselves as the sensible party of British modernity. No longer “the nasty party”, the Conservative leadership embraced gay marriage, aggressively sought non-white spokespeople, and took a more moderate line on Europe than its members felt comfortable with.

Labour could also reposition itself, in the knowledge that it could keep winning elections even as it kept losing voters. Those who voted for Brexit tended to be English, white, poor, less educated and old. With the exception of the elderly, these have traditionally been Labour’s base. But the party has been out of touch with them for some time. The New Labour project made the party’s appeal both broader and shallower: there was a sharp pivot rightward, made with the conscious calculation that its core supporters had nowhere else to go.

The coalition of metropolitan liberals, city-dwellers, ethnic minorities, union members, working-class northerners and most of Scotland slowly began to fray. Poverty went down and inequality went up. Appeals to class politics gave way to more aspirational messaging. While covering the 2001 election, I recall the indifference that met Tony Blair on the campaign trail. He would appear in front of small, curious crowds, and then wave over their heads into the middle distance for the cameras. They voted for him – the alternative was William Hague running around in front of a pound sign – but they were not remotely engaged or inspired by him or his party.

The leave campaign did not invent racism. The deployment of bigotry to suit electoral ends has a longstanding tradition

In areas that Labour once had a stranglehold on, its vote slumped. Blair took his third victory in 2005 with only 9.5 million votes – fewer than Neil Kinnock managed when he lost to Margaret Thatcher in 1987. As long as the economy was doing well, a significant proportion of voters just stayed home – and there was no way to tell how soft the remaining support was until it was tested. Now those tests have come: in Scotland from the SNP, and in England and Wales from Ukip.

It may seem a minor matter in the wake of this referendum to say that our political parties are failing in their historic mission, but we would not have arrived here were they not doing so. The party set up by trade unions to represent the interests of workers in parliament no longer commands the allegiance of those people. True, almost two-thirds of Labour voters did vote remain – but an overwhelming number of the working-class, the poor, and the left-behind put their faith in leave. Meanwhile, the party of capital and nation has presided over a painful blow to the City and the Union. Neither party is fit for purpose.

The leave campaign did not invent racism. The deployment of bigotry to suit electoral ends has a longstanding tradition in this country, which is often denounced even by those who have done exactly that. Neglect, both benign and malign, and indulgence, both covert and overt, left those prejudices open for opportunists to exploit for their own ends. This was one such opportunity.

Liberal commentators have come to automatically identify poorer Britons with an ingrained loathing of foreigners, but in fact the British working class has a distinguished history of anti-racism: from the Lancashire mill workers boycotting cotton picked by slaves in the American Confederacy to the battle against fascism at Cable Street, and the campaigns of the Anti-Nazi League and the Anti-Apartheid Movement. In the last year, thousands of ordinary people have made their way to Calais with supplies for refugees.

Like all classes in Britain, however, it also has a bleak history of racism, which can make the journey from the street to the ballot box. Sometimes this has taken the form of open calls for white racial solidarity against non-whites. Sometimes it has taken organised forms, in the shape of Oswald Mosley’s New Party, the National Front, or the British National Party. And at other times, it has been neatly folded into the fabric of mainstream politics.

The National Front rose to prominence in the 1970s, but saw its advance blunted by Margaret Thatcher, who promised to be tough on immigration, and expressed sympathy for people who “are really rather afraid that this country might be rather swamped by people with a different culture”. Then came the BNP, which triggered a brief period of intense scrutiny and concern when it won a council seat in the Isle of Dogs, east London, in 1993. By 2003, the party had 17 councillors, and by 2008, more than 50 around the country. By increments, the BNP became a constant, if contested, fact of British municipal life. In the 2009 European elections, the party’s leader, Nick Griffin, won one of two BNP seats in the European parliament. That same year, Griffin found himself on BBC1’s Question Time. The rise of Ukip would later suck up all the oxygen on the far right, and Griffin would disappear, only to be replaced by Nigel Farage. More blokey and garrulous, less abrasive and boorish, Farage narrowed the focus to Europe and, by doing so, widened the far right’s appeal.

The divisions such movements sow have always posed a particular challenge for Labour, since the party’s core base of support is vulnerable to social and economic change to start with. That is why nativist parties always play best during times of recession, when resources are scarce and people are looking for someone to blame. In a letter from 1870 that, with a few words changed, could have been written any time in the past few years, Karl Marx vividly described this dynamic: “Every industrial and commercial centre in England possesses a working class divided into two hostile camps, English proletarians and Irish proletarians. The ordinary English worker hates the Irish worker as a competitor who lowers his standard of life … This antagonism is artificially kept alive and intensified by the press, the pulpit, the comic papers, in short by all the means at the disposal of the ruling classes.”

The Tories have consciously fanned these flames. In 2005, when the Tory leader Michael Howard ran his whole general election campaign on immigration, with the insidious slogan “Are you thinking what we’re thinking?”, the party’s MP in Castle Point, on the Essex coast, asked in one leaflet: “What bit of ‘send them back’ don’t you understand Mr Blair?” During that election, I drove from the least diverse constituency in the country – St Ives in Cornwall – to the most, which was in east London. In Cornwall, the Liberal Democrat MP, Andrew George, said the racism he was hearing was a particular worry. “It’s the one resonance issue that’s favouring the Tories,” he told me. “On the doorstep people aren’t saying: ‘I’m voting Conservative because of their tax spending plans.’ People have been saying, ‘We only came down here to get away from the blacks,’ and there was no self-consciousness about saying it out loud. I’m very disturbed about it. Maybe they’re not playing the race card. But they’re playing the immigration card and that’s right next to the race card in the deck.”

Facebook Twitter Pinterest Theresa May gives a speech in 2005 during the general election campaign, with the Conservative party’s slogan to the fore. Photograph: Graeme Robertson/The Guardian

This week, David Cameron condemned “despicable” xenophobic attacks in the wake of the EU referendum. But just last month he was galvanising the Tory faithful in London with claims that the Labour mayoral candidate, Sadiq Khan, was in cahoots with an imam who, Cameron alleged, supported Isis. That claim was so utterly false that if the prime minister did not enjoy parliamentary privilege against charges of defamation, he would have had to pay damages to the imam, as the defence secretary Michael Fallon was forced to do when he repeated the remarks outside the House of Commons.

With a few notable exceptions, Labour’s response has been less crass but no less calculated. Labour tends to condemn outright bigotry before clothing it in the cosy blanket of understanding and concern for the bigot. It protests and then it panders. It routinely points out that racism is bad, but is rarely brave enough to make the case for why anti-racism is good. This leads to the worst of all worlds. Racism and xenophobia are condemned but never challenged, which leaves those who hold such views feeling silenced and ignored, but never engaged. This, in turn, leaves them prey to hucksters like Farage, who can claim to speak for them.

After his party lost a seat in Smethwick, West Midlands, in 1964 to a notoriously racist campaign, the Labour minister Richard Crossman concluded that: “It has been quite clear that immigration can be the greatest potential vote-loser for the Labour party.” This view was shared by Tony Blair’s government. Blair chose the white cliffs of Dover for a 2005 election speech on refugees and immigration – when it was time for the photo call, there wasn’t a black face to be seen. In 2006, as the Iraq war descended into chaos, home secretary John Reid turned his focus on the enemy within – intolerant Muslims. “This is Britain,” Reid told the party conference. “We will go where we please, we will discuss what we like, and we will never be browbeaten by bullies. That’s what it means to be British.” A few years later Jack Straw lectured Muslim women on what to wear when they came to his surgery.

The effect was not to blunt the rise of organised racism but to embolden it, making certain views acceptable and respectable. It was embedded in our political language and institutions and then left to fester.

We have yet to see a general election in which race and immigration are the defining issues. If that were the case, one would expect to see Ukip do far better that it has previously. At an election, people vote for parties that they believe, on balance, identify with their concerns on a range of issues. But this was not a general election. It was a referendum on membership in an unloved institution that was the source of mass migration on a scale that the government had not anticipated, and that most Britons were not prepared for.

Although much has been made, since the referendum, of results showing that areas with little migration were most opposed to it, we should not underestimate the jolt that accompanied the effects of free movement within a newly enlarged European Union. I left Britain for America in 2003, before it opened its borders to the east. After a few trips back in 2005, I simply stopped assuming that white people in London spoke English any more. The transformative potential was clear even then: states may import workers, but it is people who actually come. My parents came from Barbados in the 1960s, planning to stay for a few years, make some money and head back “home”. Instead they had kids and stayed. I saw no reason why many of these new immigrants wouldn’t do the same – and I wondered how the language we used to talk about race and migration would change now that there were so many new arrivals who were white but not British.

Facebook Twitter Pinterest Tony Blair in Dover where he gave a speech on immigration in 2005. Photograph: Dan Chung/The Guardian

In the past, pollsters and politicians had elided the two issues – considering “race/immigration” as a single area of concern. That was never true or accurate, but the new situation made it even more clear that we needed to have a sophisticated conversation about migration and race. Not the conversation that politicians always claim we are avoiding, about the dreadful impact of migration – but a conversation about our needs as an ageing nation, about our economic and foreign policies, about how immigrants contribute far more in taxes than they take in benefits, and about the fact that there are considerably fewer of them than British people think. (For instance, in a recent Ipsos Mori poll, on average, respondents thought that EU immigrants accounted for 15% of the population – the true figure is about 5%.) But that is not all: we needed to have a conversation about the resources that communities require to accommodate an influx of new arrivals – school places, hospital beds, housing – and about who was responsible for cutting the budgets that used to provide these things.

But that is not the conversation we are having. It is not even the conversation we have never had. It is the conversation our leaders have desperately and wilfully avoided. For decades, the issue of race (the colour of people) and immigration (the movement of people) have been neatly interwoven, as though they are one and the same thing – as though “British” people are not also black and black people are not British.

It has been profitable for politicians – and not only Nigel Farage – to sow confusion about the difference between migration from the EU and elsewhere, or the distinction between economic migrants and asylum seekers. The argument that this was a vote about “economic” issues – since the hated European migrants were not brown or black – is belied by the deliberate commingling of every type of foreigner. It was not an accident that the “Breaking Point” poster, revealed by Farage on the morning of Jo Cox’s murder, showed Syrian refugees coming into Slovenia, an image with almost no relevance to the issue on the ballot. Xenophobia and racism are easily blended, and they become an especially potent toxin among a population that no longer trusts its own leaders.

To describe this as a working-class revolt against the elites is to give the elites more credit than they are due. With both sides run by Old Etonians and former Bullingdon boys, the elites were going to win no matter who you voted for.

It would be more accurate to say that the results reflected an ambivalence toward the elites on both sides. When leaders who you believe don’t care about you – and can do nothing for you – tell you what is in your best interest, it’s reasonable to ignore them. People who were told they would lose out in the recession to come felt they didn’t have much to lose; people who were told that belonging to the EU gave them certain rights and advantages did not see they had any value. It would be as much of a mistake to assume these people consciously voted for Faragism as to think they could never be tempted by it.

On this point, those who voted remain should, at the very least, concede that had we voted to stay in, the country would not be having this conversation. If remain had won, we would already have returned to pretending that everything was carrying on just fine. Those people who have been forgotten would have stayed forgotten; those communities that have been abandoned would have stayed invisible to all but those who live in them. To insist that they will now suffer most ignores the fact that unless something had changed, they were going to suffer anyway. Those on the remain side who felt they didn’t recognise their own country when they woke up on Friday morning must spare a thought for the pensioner in Redcar or Wolverhampton who has been waking up every morning for the last 30 years, watching factories close and businesses move while the council cuts back services and foreigners arrive, wondering where their world has gone to.

Many of those who voted leave will undoubtedly feel that they have had their say after years of being ignored. But they are beginning to discover that they have been lied to. Even when it feels that there is nothing left to lose, it turns out that things can always get worse. And even when it feels like nobody tells you the truth, it turns out that some factions of the elite can and will do more damage to your life than others.

One of the defining illusions of the populist rightwing agenda is that it possesses a unique ability to rally the poor on the basis of race and nation – but even here, it cannot deliver on its own terms. The leaders of the leave campaign have been in a furious retreat since their moment of triumph: they have walked back promises to control immigration, to quit the single market, and to “give our NHS the £350m the EU takes every week”. Leaving the EU does not diminish the power of the multinationals that moved manufacturing jobs overseas, or the financiers whose recklessness led to the closure of libraries and the shrinking of disability benefits. We have not opted out of global capitalism. Something will now be done about the free movement of labour – but capital will still have the run of the place.

The anger that has been unleashed is not being directed at the elites. Instead it is flying every which way to alarming effect: black people are being abused in the street; a Polish community centre has been defaced; eastern European children are being taunted in schools. Liberals are blaming the poor, Cameron is blaming Boris, the Daily Express is blaming the EU (“Brexit Vote is EU’s Fault: Ignoring Britain was Big Mistake”), business is blaming Cameron and Boris, Scotland is blaming England, London is blaming the rest of England, children are blaming their parents, and the EU is blaming all of us.

Facebook Twitter Pinterest The Vote Leave battle bus in Portsmouth. Leaders of the victorious campaign have already stepped back from the pledge to spend £350 million on the NHS. Photograph: Matt Cardy/Getty Images

On 31 December 1999, as American television viewers watched around-the-clock coverage of the arriving millennium, one time zone at a time, the ABC newsreader Peter Jennings offered an appraisal of recent British history as he watched the fireworks light up the sky over the Thames. “This country has been through so much,” he said. “In 1900, when Queen Victoria was on the throne, Britain ruled over one-fifth of the world’s population. But for all this fantastic show, Britain’s possessions have dwindled to … Well, Hong Kong has gone now and, well … The Falklands are still British.”

Ever since the Suez crisis, Britain has struggled with its place in the modern world. Nostalgic about its former glory, anxious about its diminished state, forgetful about its former crimes, bumptious about its future role, it has lived on its reputation as an elderly aristocrat might live on his trust fund – frugally and pompously, with a great sense of entitlement and precious little self-awareness.

Trident: the British question | Ian Jack Read more

Once great, now not so great, it has struggled to find a status in its post-colonial iteration that fits its size and budget. We punch above our weight culturally, have significant clout economically and suffer painful delusions of grandeur militarily (let’s not talk about football). Where foreign policy and defence are concerned, Britain’s desire to be taken very seriously is the chief obstacle to it being taken more seriously. One of the central reasons for keeping the Trident weapons system, we are told, is so that we can keep “a seat at the table”. Our military involvement in Syria was intended not to be decisive but to send a message. And then there was Iraq. In most cases Britain craved a role for itself as the sole reliable conduit between America and Europe. Peripheral to the action; central to the process.

The fact that our ability to fulfil that function for the US has been severely diminished – President Barack Obama asked us to remain and we wouldn’t even listen to him – may be one of the few good things to come out of this whole mess. Indeed, our lesser status has already become clear from the attempts that have been made to negotiate ourselves out of the situation we just voted ourselves into.

While we were in the EU, Europe was prepared to try and make it work, even though we were a severe irritant. Now that we’ve voted out, they just want us gone. The German chancellor, Angela Merkel, could not have been clearer. She’s not interested in Britain holding another referendum, and is not inclined to give it any special favours. There would be no “cherry-picking. There must be and there will be a palpable difference between those countries who want to be members of the European family and those who don’t.” In other words, we will now be treated like any other country – which is precisely what we assumed we weren’t.

This melancholic grasping for our former glory has not served our politics well and is a key to understanding how this happened. In the absence of any substantive argument about how “taking back control” might look in the 21st century, we got men like Farage and Johnson waving flags and pounding their chests.

The route map out of this sorry situation will not be achieved by reversing the results of an election (even if that were desirable) or renegotiating a deal with the EU (even if that were possible). It will come through some broader reimagining of Britain that pays more attention to work, fairness, community and equality, than to flag, nation, anthem and culture. For the last 15 years, governments and the press have stoked fears about whether British culture could withstand the integration of Muslims – of whom 70% voted for remain – when they should have been worried about how to integrate the white working class into the British economy.

Brexit didn’t create these problems. It exposed them and will certainly make them worse. The decision as to whether we live in or out of the EU has been made. The choice before us now is whether we are finally ready to confront the issues that we have blissfully denied and engage with the communities we have carelessly ignored.

Main Photograph: Rex/Shutterstock

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• This article was amended on 30 June 2016. An earlier version referred to Slovakia where Slovenia was meant.