30 June 2016

The Morning After

Reflections on the referendum.

By John Watson

A deep dark cloud of gloom has descended over the London Borough of Islington. Here in the citadel of Remain, in an area full of lawyers, bankers and doctors, the Referendum result has hit us like an exploding shell.  How could 52% of our countrymen have disagreed with us?  Were they all too old, too stupid, too blind, too ill-educated?  Was it our fault for not explaining it all to them properly in words of one syllable?

I have always been an “In” myself, ever since the heady days of 1973 when I campaigned in the previous referendum, through a spell as a member of a pro-European political group to a career in the city, based on lawyering European deals. And then “poof!” All the certainties blown away in a moment, that horrible second when we heard the Newcastle result and began to realise that nothing would be quite the same again.

And yet it shouldn’t have been such a surprise.  For years the gap between the EU and the population of the member states has been widening, a little like the gap between a departing ship and the dockside. You don’t have to look very far to see why.  Look at the way in which the EU spent money (not least on its own offices) while the people of Greece were being racked for the last cent on the altar of austerity. Look at the way in which provisions from the Constitution which had been rejected in French and Irish referenda in 2005 reappeared in the Treaty of Lisbon two years later.  There is nothing technically wrong about that.  The treaty was approved by each member state but you can see why ordinary members of the public, those outside the political elite, began to feel that something was happening over which they had little control. Something way beyond the project to which they had given their consent at the time of their country’s accession.

Two things then happened to widen the gap.  The first was the migration of workers from Eastern Europe.  Now the decisions from which the public felt excluded began to effect their lives.  Many of the concerns about jobs and the strain on services were no doubt exaggerated, but there is no point in pretending that they were all racist or based on hate.  People believed that the neighbourhoods in which they lived and which they loved were being changed, possibly beyond recognition, by a bureaucracy which was too remote to understand.   It is not hard to see why that worried them.  The second was that things began to go wrong.  The huge achievements of the EU in integrating post war Europe and creating the single market became obscured by more recent failures, the unfortunate consequences of the EU’s overtures to the Ukraine, an inadequate response to the refugee crisis, a failure to bring the continent out of recession.

This wasn’t all the fault of the EU Commission.  It is no easy business managing a block of 28 countries which are reluctant to surrender their sovereignty.  The only answer was to call for greater union, for greater powers at a time when many Europeans already felt that they had been sucked into an experiment which was out of control.

It was inevitable that there would be an explosion, so the question became where.  Would it be France, where some 60% of the population are opposed to EU membership, or the UK where we now know that 52% are opposed, or the Netherlands, or Denmark, or Italy?  Someone was going to be the first to say that this was not what they had signed up for and that they were going to be the first to jump off the train.

I’m sorry it had to be us.  The country that walked away was inevitably going to pick up extensive collateral damage and my own instinct would have been to let the train run on in the hope that someone else would take the dangerous step. Perhaps that makes me wise. Perhaps it makes me overcautious but I am certainly not going to insult those who were bolder than I by calling them too old, too stupid, too blind or too ill-educated.

So where are we now? What sort of arrangements can we expect to emerge over the next two years? Well, there are lots of things which will presumably go on as before, albeit under new agreements. Take the sharing of information about terrorists, for example. That is an area where GCHQ leads Europe and it is hard to see why the EU would not wish to continue with intelligence sharing arrangements. What about academia? Why wouldn’t the Erasmus scheme continue and why would the research departments of universities in the UK and the EU not continue to work together?  Then there are things like the protection of the environment where common interest dictates a common approach.  Also patents and antitrust, where there seems little point in splitting things up. One would have thought that the exit agreement should contain a list of areas where things can go on exactly as before.

Against that, there are things which will certainly have to change.  Although existing EU legislation will presumably remain part of English law unless specifically repealed, new EU rules will only take effect if ratified by the UK legislature or in areas (such as those mentioned above) where things are delegated to the EU.  All this sounds reasonably easy to deal with (well, in relative terms anyway), but there is one issue which overshadows everything. What access will we have to European markets?

Lots has been written about the Canadian model, the Norwegian model, the Swiss model and reliance on the World Trade Organisation rules, rather as if they were sweets in the bag and that there was a good chance of the two sides deciding that they liked the same flavour. There is, however, a knot and it is a difficult one to undo. The EU links participation in the single market with the free movement of people. The Leave campaign was built on the proposal to restrict the free movement of people. It follows that it will be very difficult indeed for the UK to have unrestricted access to the single market.

That is quite a knot to unravel but, as so often with this EU debate, all is not quite what it seems.  The toxic gap between an EU centric political class and a populace which feels threatened is not exclusive to the UK but exists in other countries as well. Take France and try this as a scenario:

Next year there will be a French general election and currently the National Front of Marine Le Pen is surging in the polls. At some stage panic breaks out, exactly as it did when Mr Cameron was threatened by UKIP, and the other French parties come to the conclusion that the only way of keeping the far right out of power is to offer a referendum too.  As the referendum campaign takes hold it becomes obvious to the establishment that the only thing that will save them is a relaxation of the movement of people rules. By then, though, it is too late to get the relevant changes agreed by all twenty-seven members.  Nasty!  This is what Mrs Merkel, a wise and sensible politician if ever there was one, must have nightmares about when she has dined too well.

Ask yourself this then.  If you were committed to the continued existence of the EU, what would you do now? There is only one sensible answer. You would try to lance the boil by starting negotiations about the softening of the movement of workers rules so that the governments of member states have the ammunition to deal with challenges from the political fringes.  At some stage, then, the EU will probably revert to rules which would have defused the issue in the UK.

This is not the sort of thing for which you would hold your breath, and once notice is served under clause 50 of the Lisbon Treaty there will be a hard timetable.  Still, if we ultimately have to accept free  movement of workers as a condition of whatever market access we end up with, it will perhaps be a consolation that we are signing up to a freedom whose days are probably numbered.

There is another way of looking at this too.  The social challenges of the next few years will be novel and hugely important.  How do you combine a growing number of relatively fit old people with opportunities for the young?  How do you prevent robotics from destroying the employment market?  Will our independence from the EU enable us to tackle these issues in a more flexible and practical way than would be the case if we were part of it?  Of course the EU is wrestling with these points too but their tradition is far more academic than ours and Darwinism alone tells us that to find solutions in areas like these one needs plenty of experiments rather than a solution imposed from the top.

There is a long way to go here and lots of moving parts.  No one really knows how it will work out or whether any of the suggestions made above will be borne out.  One thing only is certain.  A big risk was taken on Thursday and we committed ourselves to a small boat on a stormy sea.  If I have to embark on a trip of that sort I can think of no one who I would rather have in my boat than the British people, be they Leave or Remain.

 

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