CHAPTER 8

Brexit: A Consequence of Globalization or a Case of British Exceptionalism?

Roger Liddle

The vote to leave the European Union (EU) in the June 2016 referendum was a momentous event in British politics. But we are far from a full understanding of why the Brexit vote happened, what Brexit will actually mean, what new ‘national strategy’ for Britain in a world of globalization will emerge, and how Brexit may eventually reshape British politics.

How far can the Brexit vote be interpreted as a populist reaction against globalization? Was it, as many now see it, a protest revolt of the ‘left behind’, a signal of cultural alienation from multiculturalism and modernity, and ‘two fingers’ to a discredited elite? Can Brexit be viewed paradoxically as a very European (and also Trumpian) phenomenon of a growing populist reaction to mainstream politics? Or is it more a case of a peculiarly British exceptionalism?

The governing Conservatives are deeply divided on what Brexit means. The Brexiteers’ distinctive interpretation is a reassertion of national sovereignty for at present hazily-defined ends, but not a protectionist ‘taking back control’. Their vision of a Global Britain represents a different world view to the populism that magnified Vote Leave. What will be the reaction if the reality of Brexit both disappoints its ‘Global Britain’ champions and the quite different motivations of its many supporters? What will be the shape of post-Brexit politics and its impact on Britain’s European policy? Of one thing one can be certain: Brexit will not abolish the European question in British politics, only change its nature in ways we as yet imperfectly understand.

The chapter first considers how globalization changed the European question; and then discusses how far structural change or contingency explains the Leave victory. The final section speculates about Britain’s future national strategy and the shape of post-Brexit politics, given the likely economic prospects and the starting assumptions of the present political parties.

How Globalization Changed the European Question in British Politics

Controversies over the European question in British politics well predate ‘globalization’. The founding purpose of the Schuman Plan in 1950 was to make war between France and Germany unthinkable. Britain’s Labour government fatefully rejected its proposed pooling of national sovereignty over the coal and steel industries. From a shaky start, the simple, noble goal of a United Europe triggered a hugely powerful integrationist dynamic, which Britain eventually saw no alternative but to join. Yet British opponents of EU membership always smelt a conspiracy to create a United States of Europe. While Margaret Thatcher was reluctantly persuaded that the single market was a Continental extension of her free enterprise vision, she put up such fierce resistance to the single currency as an unacceptable step towards a federal Europe that it brought her down.

From the 1990s, the EU began to think of itself as the answer to the challenges of globalization. Globalization and European integration were close relatives, in part a product of EU success. The Common Market had made itself the driving force in global trade liberalization in partnership with the United States: key political choices that created the necessary conditions for globalization. Secondly, ‘social market’ capitalism had proved a superior model to communism, contributing to the Soviet collapse. The British left once doubted that outcome, confident that, for all the Soviets’ totalitarian deficiencies, state planning would ultimately emerge victorious as the superior economic model. That influence still lingers, and will become more influential if post-Brexit economic performance lags in line with expert forecasts.

In contrast, modern progressives hailed the rules-based order of the EU as an exemplar of how to manage globalization. The EU’s ‘step by step’ pooling of national sovereignty could be replicated across the globe. Events have not turned out quite as both progressive globalizers and hubristic pro Europeans assumed: Vladimir Putin and Xi Jinping sustain their legitimacy with unabashed nationalism; Trade liberalization has stalled since the effective suspension of the Doha world trade round in 2008; Now with the Trump Presidency, Obama’s TPP and TTIP trade initiatives have been abandoned. Trump’s rhetorically aggressive, ‘America First’ protectionism is the biggest threat to free trade since the 1930s, though the Brexiteer champions of free trade appear not to have noticed. The ‘global order’ now looks frighteningly unordered.

Instead of becoming the confident exemplar of rules-based global governance, the EU has limped along. Why? Mainly because ambition has run well ahead of the practical possibilities of achievement. Three big EU projects contributed to public disillusion.

The euro crisis tested the EU’s internal unity. Although sufficient was done to ensure the currency’s survival, in spite of many British Eurosceptic predictions, the euro nevertheless became perceived as a mechanism of divergence, austerity and social stress, not an expression of European solidarity. In Britain, Gordon Brown’s decision to oppose euro membership became the received wisdom and was hailed as one of his proudest achievements. The euro was ‘for them, not for us’, just as the Schuman Plan had been for Attlee and Bevin in 1950. Yet if Britain was to become the self-confident equal of France and Germany within the EU, it had at some stage to join the euro, as Tony Blair consistently argued. Had Britain joined, the cause of eurozone reform would have been strengthened. The City of London could have played a decisive role as the financial centre of Europe, whereas Brexit now imperils the City’s position. Labour’s decision to steer clear of the euro strengthened the semi-detached mentality that led to Brexit.

Enlargement, on the other hand, at first appeared a historic success for which Britain could take significant credit, integrating the liberated central and eastern European nations into an EU that upheld human rights, the rule of law and democracy. While rapid economic convergence has been sustained, nationalist governments in Hungary and Poland have dented that initial optimism, not just as a result of their challenges to media freedom and an independent judiciary, but also their fierce opposition to EU burden sharing in the refugee crisis, on the anti-liberal grounds that acceptance of Muslim refugees is a threat to their homogeneous Christian societies. This anti-immigration sentiment contrasted with the ‘free movement’ rights of EU citizenship that enabled new member state citizens to settle elsewhere in the EU. In Britain this proved hugely controversial, raising immigration – and the EU’s role in it – to the top of electoral anxieties.

As for common foreign policy and defence, the EU struggled to become a credible global actor in its own right despite successes such as the global agreements on climate change, the Iran nuclear deal, the negotiation of a fragile truce in Ukraine, sanctions against Russia, and various EU peace-keeping missions without US participation. But the rupture over Iraq in 2003 highlighted EU ineffectiveness. EU common foreign and security policy will always be weak without consensus between the big member states. Bluntly, Europe’s national leaders need to show the same level of loyalty to each other as had bound them together through the Cold War. In this context, Tony Blair’s uncritical support for George Bush in Iraq in face of French and German opposition, must surely be judged a mistake. Britain should have prioritized hammering out a common policy with France and Germany which might have had greater leverage over the United States. Instead the defeats and sacrifices of Iraq and Afghanistan have strengthened isolationism. The use of military power for humanitarian ends has been discredited. As the Syria tragedy shows, Britain, in common with the EU, hates the world as it is, but lacks the moral confidence and military capacity to change course.

Where has the EU gone wrong? To simplify grossly, to be sustainable, globalization requires some combination of strengthened, rules-based global governance with fewer ‘neo-liberal’ domestic policies. Without the latter, domestic political support for economic openness inevitably erodes. Without the former, an inadequate supply of the public goods needed to manage the multiple, burgeoning challenges of interdependence persists. The EU is active on many fronts, but that hyperactivity has failed to demonstrate a ‘Europe of results’. Eurosceptics ascribe these problems to integrationist overreach. Europe bit off more than it could chew. European integration has assigned itself tasks which it cannot fulfil for the simple reason that there is not the consent within the member states to pool the necessary sovereignty to make EU policies workable. The EU is caught in an awkward middle ground. EU integration has weakened the powers of individual member states to respond – however imperfectly – to their electorate’s concerns: for example, to keep out unwanted migrants, to stop foreign takeovers, to defend local jobs. Yet there is not the popular consent for further centralization of power to enable the EU to respond more intelligently to such concerns. Hence the appeal of ‘taking back control’.

This analysis defines the fundamental issue for the EU as over-ambitious political integration. A legitimate criticism of EU leaders has been their failure to prioritize: instead of European Council conclusions that promise far more than they can realistically deliver, Europe’s leaders failed to identify a limited number of issues where political consent to a further radical pooling of sovereignty is essential in order to sustain public confidence in the European project. The most politically salient failure has been in developing capability to police the EU’s external border effectively and to limit migration flows to sustainable levels.

This links to the EU’s second major flaw in managing globalization: the neglect of the social. The EU’s value system always made much of its commitment to ‘social cohesion’ and ‘solidarity’. In the first decades there was real policy substance to this commitment. The Coal and Steel Community established a Social Fund to cushion industrial decline. The Common Market was balanced by a Common Agricultural Policy that slowed the movement of citizens off the land. British and Irish membership led directly to EU regional policy. The Mediterranean enlargement was accompanied by a doubling of EU Structural Funds.

The interaction of the single market, enlargement and globalization has had profound structural effects. The commitment to offer full EU membership to the new democracies of central and eastern Europe member states, where wages were a fraction of the EU 15s, resulted in investment shifting east, and citizens in search of work coming west. Chinese imports made large sections of European manufacturing uncompetitive, particularly the textile and footwear industries in Italy and Portugal. Help for the new member states was constrained within an EU budget restricted to roughly 1 per cent of EU GDP. Less EU funds became available to cushion the impact of economic change on the EU 15s ‘left behind’ regions. Nor was much practical commitment to social cohesion on display in the euro crisis: EU fiscal rules and the management of the crisis accentuated divergence, rather than promoting the convergence that had hitherto been the EU’s principal mission and achievement. The very notion of a ‘transfer union’ became a toxic obstacle to balanced solutions. In Italy and Greece this was compounded by a not unjust perception that on migration, the EU let them down.

The root of the EU malaise is surely social – and that requires a social answer, not a crude attack on European integration. This is not an argument for a centralization of social policy at EU level. In limited areas ‘more Europe’ is needed – for example to control borders, to ensure transnational corporations pay their taxes, and to set social standards that prevent a race to the bottom. Fundamentally, a different concept of a more holistic political economy is required that all member states share, where fiscal responsibility goes hand in hand with more ambitious social and infrastructure investment to renew the social market economy; and conditional transfers from richer to poorer countries are made as ‘money for reform’, if a member state’s ability to borrow is constrained by bond markets,.

Globalization’s optimists were too ‘laissez-faire’. They forgot that rapid economic change almost always has wrenching social consequences. In Western Europe as a whole, the dynamic of economic and social change shares many common characteristics: the disappearance of ‘good’ working class jobs; trade union decline; the emergence of a new ‘knowledge and service’ economy with plentiful opportunities for the educated, but less good news for those dependent on low paid, mostly non-unionized, private sector service jobs; demographic trends raising costs of health and pensions but squeezing resources for future-oriented public investments to spread life chances, widen educational opportunities and strengthen innovation; huge transformations in the role of women, yet with persistent gender pay gaps and patchy access to affordable child care; more diversity of lifestyles as well as ethnicity and religion; with migration a rising public concern and integration a huge cultural challenge.

Europe has witnessed a growing divide between those who embrace this pattern of change and those who feel alienated by it. In a paper I co-authored for the European Commission President in 2007, The Social Reality of Europe – before the 2008/9 banking crisis – we drew attention to the gulf in attitudes between ‘cosmopolitans’ and ‘communitarians’ and the risks of growing populism.1 Populist parties on both right and left have surged in strength: with some exceptions, they share a deep Euroscepticism: in Southern Europe, Syriza in Greece and Podemos in Spain define themselves as pro-Europeans backing a ‘different’ Europe to the present neo-liberal model; in Italy, the Five Star Movement may be backing away from anti-European populism. Elsewhere, the populist right and the traditionalist left are strongly hostile to European integration.

Immigration has greatly extended electoral support for the populist right. In some cases, the motivation is economic: witness the role that the ‘Polish plumber’ played in the 2005 French referendum. But key sections of European electorates feel alienated at a deeper level from growing multiculturalism, particularly older white working class voters who left school at the first opportunity. Terrorism has heightened these cultural fears and strengthened Islamophobia. The EU’s impotence in the 2015 refugee crisis joined together anti-EU and anti-immigration sentiments.

Here there has been no British exceptionalism. There may have been no alternative to the brutal deindustrialization that took place under the Thatcher governments of the 1980s: it overcame, at least partially, Britain’s chronic post-war weaknesses of dysfunctional industrial relations, persistent inflation and declining competitiveness. But it led to severe and permanent social scarring in many old industrial regions, reviving memories of the 1930s Depression. In the medium term this provided a base for Labour recovery. When Labour returned to power in 1997, rebranded as ‘New Labour’, it launched a massive programme to improve public services, extend life chances and tackle poverty. Labour also set aside resources for urban regeneration and regional development, but it failed to overcome the deep-seated problems at the economic base of once proud industrial communities that had seen their economic heart ripped out of them. Manufacturing decline continued apace. A political price was paid in the high Leave vote in many declining areas in the 2016 referendum.

UKIP capitalized on these discontents. Founded in the 1990s to take Britain out of the EU, in Nigel Farage it had a gifted populist leader. In a 2010 general election TV debate, he infamously linked the strains on Britain’s NHS with African immigrants allegedly making their way to Britain to seek free NHS treatment for AIDS. With the impending Bulgarian and Romanian accession in 2014, Farage played successfully on the link between the EU, its free movement rules, unrestricted EU immigration, squeezed wages and public services creaking under austerity. In the 2016 referendum, he claimed five million Turks were about to settle in Britain as Turkey was about to join the EU! Because EU rules forced unwanted immigration on Britain, Islamic terrorists would be free to enter and do their worst.

While in Britain EU membership always aroused opposition for reasons with little direct bearing on globalization, since the 1990s a combination of EU weakness, disconcerting social and economic change and growing opposition to immigration magnified potential support for Brexit. There is, however, one key contrast between Britain and the rest of the EU. On the Continent, extreme populist parties have never broken through. In the 2016 referendum in Britain, potential support for Leave was translated into a narrow overall majority. But as the next section argues, there was no structural inevitability about this outcome.

How Far does Globalization Explain the 2016 Referendum Outcome in Britain?

Analysis of the Leave referendum victory has tended to be simplistic: immigration trumped all else; a revolt of the ‘left behind’; payback time from the ‘losers’ from globalization. Yet the golf clubs of comfortable England contained plenty of Leave voters. Cities that voted Remain – Glasgow, Liverpool and London – include the most deprived communities in Britain. There were significant age, class and level of education differences in the pattern of voting (Clarke et al. 2017: 154/155). Sixty-six per cent of over 65-year-olds, 64 per cent of social class DEs, and 60 per cent of those without degrees voted Leave: nonetheless so did 35 per cent of ABs and 37 per cent of university graduates – a corrective to those who see the result as representing an unbridgeable social polarization. A majority of Conservative voters backed Leave not Remain: the reverse was true for Labour.

Leave support was strongest in areas that have suffered sharp economic decline (the Black Country, the Potteries, the old coal fields from the North East to Nottinghamshire, the South Wales Valleys); market and coastal towns, particularly in Eastern England; and on London’s Essex fringe. Ethnicity mattered too: 53 per cent of those identifying as ‘White British’ (and a much higher percentage of those who identify as ‘English’) voted Leave, whereas only 23 per cent of ethnic minorities did so.

Leave polled strongly in white working class and lower middle-class neighbourhoods, but won the support of relatively few graduates. These groups may perceive themselves as ‘left behind’, but socio-economic analysis would not identify them as amongst the most deprived: the Leave vote was highest among older voters who tend today to be better off. Why did they vote as they did? Might they have voted differently in different circumstances? The Leave victory can be described through the metaphor of the Russian doll. The outer layer consists of the failures of the Remain campaign itself: contingencies that might have been different, but in the end weren’t.

Remain focused almost exclusively on economics, based on polling evidence that undecided voters were Eurosceptic at heart, but would not vote to make themselves poorer. This choice of strategy replicated Project Fear’s success in the Scottish independence referendum two years before. Yet Remain’s predictions of Brexit gloom did not shift sufficient voters into their camp. Exaggeration and over-precision may have lessened the message’s credibility, as did public weariness of the messengers: the endless procession of politicians, bankers, industrialists, Bank of England governors, IMF managing directors and eminent economists. If ordinary people had had no pay rise for a decade, why listen to their words of wisdom? Hadn’t the 2008 crisis demonstrated that the elite had been caught with their fingers in the till? Why not trust your own gut instincts, rather than this discredited ‘expertocracy’?

Conservative backing for Remain was seriously compromised by the Johnson/Gove decision to lead the Leave campaign. Boris Johnson emerged as the most popular campaigner, with his perceived ‘authenticity’ crucial in boosting the Leave vote (Clarke et al. op cit: 173). Cameron was wrong-footed by this and unwilling to attack his colleagues directly in ways that would damage party unity. For example, while Farage was a strong motivator of large section of the electorate, it was a minority. But Cameron baulked at attacking Johnson and Gove for putting themselves in Farage’s pocket.2 The Johnson/ Gove camp showed no such restraint, with their claim that on Brexit, there would be an extra £350 million a week for the NHS, and their backing for the 5 million Turkish migrants scare. While Johnson’s ratings soared, Cameron suffered a huge plunge in popularity. Having spent his political career mouthing Eurosceptic mantras, his sudden enthusiasm for EU membership did not ring true.

There was no proper cross party campaign and it mattered. Remain was far too dominated by Cameron and Osborne. As Labour leader, Jeremy Corbyn fought a lamentable campaign probably out of deliberate choice (Shipman and Collins 20163). As a lifelong Eurosceptic, he showed a token loyalty to Labour’s pro-Europeanism and the overwhelming views of Labour MPs, trade unions and party members, including many who had recently joined the party to support him. In another misjudged lesson of the Scottish referendum, Labour leaders refused to share platforms with Conservatives. Alan Johnson’s Labour campaign for Remain was largely ignored. Given Labour’s absence from the field, the referendum came across as an internal Conservative row, alienating Labour’s traditional supporters. This posed a huge problem for Remain with the Labour base. An unexpectedly high turnout of mainly working class voters who had not voted for decades gave Leave its decisive edge. Two and half million abstainers in the 2015 general election voted in the referendum: some 80 per cent voted Leave. A stronger Labour effort for Remain campaign might have made all the difference.

No one really knows what motivated this howl of protest. Immigration dominated the polling, but was also a proxy for more complex social discontents. It proved crucial to the Leave surge. Britain needed to ‘take back control’: a message brilliantly driven by UKIP’s Farage, but endorsed by Johnson and Gove, despite their posturing as ‘global liberals’. The pro-Brexit media relentlessly focused on immigration. In the 1975 referendum, all the national press, with the single exception of the Morning Star, advocated ‘Yes to Europe’. In 2016, the Express, Mail, Sun and Telegraph were stridently Leave. Press influence has declined since 1975, along with newspaper readership, but the press still has an agenda-setting capacity in the broadcast media. Uniquely in this referendum, the BBC interpreted the ‘editorial balance’ obligations of the BBC Charter, as awarding strictly equal time to Leave and Remain views, rather than subjecting the claims and counter-claims of both sides to their customary rigour. This served the purposes of unscrupulous advocates: remember the Goebbels principle that the ‘larger the lie, the bigger its impact will be’. Undoubtedly the Remain side made absurdly exaggerated claims for which broadcasters should have held them to account, such as need for a post-Brexit emergency budget. The Leavers’ ‘extra £350 million a week for the NHS’ was challenged, but much less so the alleged ease of establishing ‘free trade’ with Europe and the supposed certainty of five million Turkish migrants landing on British shores.

In a bad error, Remain chose to ignore immigration. Yet this was a huge dominating issue. The massive rise in EU migration following the 2004 enlargement occurred simultaneously with the squeeze on real wages. Then in 2015 the tens of thousands of refugees making their way to Germany added a new dimension of fear. There was little pushback against the assumption that migration was a wholly bad thing and that as an EU member, the nation state was powerless to act. Yet non-EU migration accounted for half the UK total and the failure to cut that number was no fault of the EU’s. Studies of public opinion suggest that the majority of voters are not racist bigots. Their attitudes to migration are highly nuanced. But they want to feel their government has a plan.

Tony Blair in his heyday would never have made such a fundamental campaign error. He would have acknowledged legitimate public concerns, presented a coherent plan for what could and should be done to address them (both domestically and in terms of necessary EU reform), yet attacked extreme Leave claims as crossing the line into racism and xenophobia and argued that Islamophobia is morally wrong. The referendum campaign gave voters the false impression that the British state was powerless on migration and its abuses. In truth, British governments of all stripes had adopted too ‘laissez-faire’ an approach to migrant rights and labour market regulation, as well as doing little to relieve pressures on housing and public services. This admission should have been coupled with a defence of the benefits of migration and openness to genuine refugees.

The third layer of the referendum’s Russian doll consisted of disillusioned ‘valence’ voters, supporters of EU membership in the past, put off by weak EU performance since: expensive bureaucracy, endless meetings, and little action. Plenty of voters repeated the refrain, ‘we originally voted to join a free trade area, not what the EU has become…’ to justify their change of heart. Remain was at fault in not explaining what the EU is, what the benefits of pooling sovereignty have been and most importantly, how a vote to Remain in the EU would be a vote for further EU Reform.

This was not what Cameron and Osborne had originally intended. In 2012, they assumed the euro crisis would require comprehensive treaty change, out of which Britain could position itself as comfortable members of a non-euro outer tier, thereby demonstrating that EU membership was not ‘an escalator to a European superstate’. Cameron’s January 2013 Bloomberg speech, in which he conceded an In-Out referendum, advocated a bold EU wide reform agenda. But there was to be no comprehensive Treaty revision within Cameron’s arbitrary referendum timetable, designed to keep his anti-European backbenchers quiet. Only then did Cameron switch to a British specific set of ‘renegotiation’ demands. As a tactic this re-negotiation proved a flop. The Brexit media ridiculed its content. Any positive impact was completely overtaken by the Johnson/Gove decision to back Leave. Unwisely Cameron allowed future EU reform to disappear from the campaign debate. Gordon Brown seized on this mistake. In the Scottish referendum he instigated ‘The Vow’: a cross party declaration of how the devolution agenda would advance should Scots reject independence. Now Brown pushed hard for a vote to Remain to also become a vote for Reform. This never happened.

The inner core of the Brexit ‘Russian doll’ consists of long term opponents of European integration. The roots lie deep in national psychology. The post-war impulse to build a United Europe never touched Britain. Britain’s peaceful development as a democracy, without suffering invasion or brutal territorial adjustment, (brilliantly described in David Cannadine’s recent Victorious Century, 2017) reinforced faith in the sovereignty of Parliament, simply too precious and providential a gift to surrender. British exceptionalism overruled the very idea of pooling sovereignty and sharing the nation’s destiny with Britain’s Continental neighbours. More crudely, why debase ourselves in a putative union with unreliable foreigners with imperfect democracies whom we had seen off in the World War II!

The only reason an In/Out referendum was ever held in the first place was because of a failure to establish a national consensus among the political elite behind our EU membership. Public support for EU membership was weak, but generally positive, fluctuating over the decades with events. But it was not a highly salient issue with the electorate until Cameron made it one. As recently as the 2010 general election, only 10 per cent of voters put Europe among the top three issues they cared about. This emotional opposition to the EU became largely an elite Conservative obsession, latterly reinforced by UKIP ‘noises off’.

Initially Labour was badly split: the party did not reconcile itself to European integration until the late 1980s, some 30 years after the German SPD. Around the same time as Labour became mildly pro-EU, the Conservative elite – the party in Parliament and the country, and the ‘party in the media’, as Professor Tim Bale astutely describes it – became rancorously divided on matters European. Margaret Thatcher’s ejection from the premiership in 1990, in which her increasingly strident objections to Europe and the single currency played a significant part, left lasting wounds. The ideological basis of this Conservative split has remained essentially the same through three decades. Leaving Europe was the necessary means to complete the Thatcher revolution. Many hoped and predicted the EU would break up. If not Brexit should be the goal. This position achieved huge traction among the ageing and dwindling ‘selectorate’ of the Conservative rank and file and was sustained by the virulently anti-European press.

Ever since 1990, supporters of Britain’s EU membership have been dragged down a Eurosceptic path by a constant guerrilla war with hard core Conservative anti-Europeans. As a result, Britain’s vision for Europe became generally narrow, too economistic and increasingly qualified and flawed. The bigger case for EU membership was never consistently made. Tony Blair was a partial exception: he wanted Britain to ‘lead in Europe’, but he chose to spend the political capital he had carefully built up on the US venture in Iraq. After 2003, the cause of Britain in Europe was on the defensive.

In the Conservative party division on Europe never went away despite Cameron’s plea on becoming Leader that they should stop banging on about it. Whereas the wartime generation of Conservatives felt a Churchillian warmth for a United Europe, the Thatcher/Major generation were much cooler, and the Camerons cynical. As self-defined Eurosceptics, they accepted the reality of Britain’s EU membership, adumbrated in William Hague’s 1999 slogan: In Europe, But Not Run by Europe.

Osborne proved staunch in his support for Britain’s EU membership, but for reasons few Continentals would empathize with. In his view, by reason of geography alone, Britain is bound to need a close working relationship with its immediate neighbours. Could anyone suggest a better arrangement than the semi-detached relationship offered by Britain’s EU membership? The UK secured all the economic and security benefits of membership, but through the ‘opt outs’ successive British governments had negotiated, and the vetoes they had deployed, was protected against being sucked into a degree of integration it found uncomfortable, still less a federal United States of Europe. This may be cold realism, but in a referendum it proved difficult to turn into a convincing rallying cry. The Brexiteers had conviction in spades.

The contingency of the euro crisis convinced Cameron ‘to lance the boil’ by conceding a referendum. Contingency as much as any predetermined structural factors led to precisely the opposite outcome. But if there was no predetermined reason why the referendum was lost, does this suggest at some point in future a new pro-European case could be won?

The European Question in British Politics Post-Brexit

The politics of the next decade may well be defined as follows: to bowdlerize Dean Acheson (1962),5 ‘Britain has lost its EU membership, and has not yet found a national strategy to replace it’. EU membership was not a perfect national strategy, but it helped Britain share the benefits of globalization – witness the success of the City, inward investment in the car industry, a booming service sector, and our internationalized universities. It kept Britain at the top table in world affairs, disguising the realities of post-Imperial decline. The downsides were the growing economic and social imbalances within Britain which European economic integration may have accentuated, though more activist domestic policies might have been able to correct. But Brexit has torpedoed that national strategy. The question facing Britain now is what, if anything, can replace it.

Brexit is legally set for 29 March 2019, but its precise shape will be far from determined by then. The Withdrawal Treaty that parliament must first approve will only contain a framework for treaty negotiations6 that will take place after Brexit. The aspiration is to complete these treaty negotiations by December 2020 – the end of the transition period in which Britain will remain, in practice, an EU member while losing all formal say in EU decisions. This transition period may be extended,7 raising the intriguing possibility that Britain will not fully have left the EU by the final date for the next general election in 2022.

In 2018, Labour hopes Cabinet divisions will lead to an early general election. This seems unlikely. In 2017 the Conservatives gambled on a Brexit general election, imagining they would sweep the country on a platform of strengthening Theresa May’s negotiating hand. The gamble failed. Conservative strategists will be wary of fighting another election on Brexit. Even if they proved unable to muster a Commons majority for the Brexit the Cabinet majority favours, a general election would be high risk. Were divisions to reach the point of parliamentary crisis, say on the question of a Northern Irish hard border, a further referendum may suddenly seem more attractive. The hazier the outcome of the Brexit talks by the autumn of 2018, the less problematic will be parliamentary approval of Brexit. Brexit can still mean different things to different people. Even post-Brexit, maybe under a new prime minister, the party will be cautious about a general election that could turn into a referendum on Brexit or for that matter, expose acute Conservative divisions on the complex trade negotiations still ongoing. A general election looks much more realistic in 2021 or 2022.

Even then the eventual terms of these treaties will not finally settle the future British-EU relationship, for two big reasons: First, ‘events’ will constantly challenge the ‘status quo’ and require new interpretations of what is meant by such mushy concepts as ‘mutual recognition’, ‘equivalence of outcomes’ and ‘managed divergence’.

Secondly, and more fundamentally, British politics is unlikely to cohere around the treaty settlement. The final outcome will almost certainly fall short of Brexiteer ambitions. Before Brexit, the Brexiteers will tolerate this, because for them ‘any Brexit is better than no Brexit’. But once out, the Brexiteers will not let go, because their Brexit vision, incoherent though it may be, is fundamental to their ideological and political position. With Theresa May’s impending demise, a personal and ideological battle for contested visions of Britain’s future will open up within the Conservative party.

The Conservatives are fundamentally divided between pragmatists and ideologues. In the referendum, the majority of the party elite ended up as reluctant Remainers. Sceptical, half-hearted and opportunistic as was their backing for Britain’s EU membership, they know Leaving is bad news, especially for the party of the wealth creators. Their basic motivation is to limit the damage. Many would prefer ‘Norway’ to ‘Canada’, but they have to stick with the mantra Theresa May unwisely established in her October 2016 party conference speech, that Brexit means Britain will be leaving the single market and customs union. Their strategic problem is twofold.

Firstly it will be extremely difficult to persuade the EU 27 to grant quasi-membership of the single market on the basis of continued regulatory alignment’ while Britain claims theoretical sovereignty over its money, laws and borders. Why should the EU make a special case of Britain and relax their insistence that full access to the single market is indivisible and requires full compliance with the EU’s four freedoms and its acquis? If Britain is allowed to be a special case, why not others?

Secondly while staying as close as possible to the EU is arguably the best means available to defend UK national interests, domestically it lacks political inspiration and vision: essentially its vision for post-Brexit Britain is ‘making the best of a bad job’. The argument for continued EU alignment depends on the undoubted advantages of the ‘status quo’. Being part of the EU and its related trading agreements, accounts presently for 60 per cent of all British trade. As Sir Martin Donnelly, former permanent secretary to the Department of International Trade put it, ‘why give up a three course meal for the uncertain prospect of a bag of crisps?’8

Thirdly, this pessimistic realism is anathema to Brexit’s true believers and their ambition to build a ‘Global Britain’. That very phrase conveys a spirit of optimism and patriotism. Hard facts make little impression on the Brexiteers. Theirs is a religious faith that a sovereign Britain, free to set its own regulatory rules and negotiate its own trade agreements, would be able to seize global opportunities in a way Britain cannot, if we continue to tie ourselves to the EU. The proposition rests on an indisputable truth that the balance of economic power in the world is shifting away from Europe: while Remainers had a powerful argument that best way to open up these opportunities ‘beyond the oceans’ is through the collective power of the EU trading bloc, outside the EU, Britain loses that influence.

At present the Brexiteers disingenuously refuse to come clean on how they would use the regulatory sovereignty they crave. Of course all their past statements suggest a determination to enhance British competitiveness by eliminating the ‘burdens’ of EU regulation: in practice the social, worker, environmental and consumer protections that Britain’s current membership of the single market offers. They are also naïve about the deregulatory implications of the free trade agreements they could realistically negotiate, which would in turn lead to further restriction of UK access to EU markets. As Thatcherites they may relish the growth stimulus they believe Britain would enjoy as a lightly regulated, free trading, mid-Atlantic tax haven. However, to suggest that this vision is in tune with the aspirations of people who voted Leave on the housing estates of the industrial Midlands and North is, to say the least, a bit of a stretch. The Brexiteers must be aware that they have not yet constructed a broad base of political support for their strategy. At present they are holding to the view that ‘any Brexit is better than no Brexit’ and that their opportunity to craft the Brexit they want will come later.

By 2022 it will have been five years since the Brexit vote. The Conservatives will boast by then that they have put a system of national immigration control in place, though it will be far too early to judge its effect. The British electorate will doubtless be offered some Brexit dividend in terms of additional funding for the NHS, even though if economic growth is less than it would have been without Brexit, the proposition is essentially bogus. Although the economy will have been protected against a sudden cliff edge as a result of a (probably extendable) transition period, most economic forecasters predict that Brexit uncertainty will have had a dampening effect on business confidence and investment. Robust world economic growth may somewhat disguise this, but Britain will have become a global laggard – that is if the overwhelming weight of economic research on the impact of Brexit is right.

The interesting question then will be the nature of the Conservatives’ ‘future offer’. They are bound to assert that their national strategy is to make the best of Brexit for Britain. Their economic policy will attempt to offset the disincentives that Brexit has put in the way of business investment by promising lower corporate taxes, increased public money for research and innovation, visa schemes for high skilled workers, new freedoms for the City, and deregulation to cut business costs. Whatever trade deals can be cobbled together with the rest of the world will be trumpeted as examples of Britain’s widening post-Brexit global influence. Noises off from the EU that this policy platform amounts to ‘social dumping’ or ‘unfair regulatory competition’ will be met with nationalistic bluster, though eventually it risks trade retaliation.

Will this work politically? The weakened state of public services and poor relative growth performance will be negatives for the Conservatives. The Brexit vision of a buccaneering Britain will be hard to reconcile with Theresa May’s concerns to unite the country and help the ‘just about managing’. Some sense a growing public mood that Britain needs less inequality, less emphasis on private gain, less tolerance of private sector excess, more public investment and more state intervention to make markets work in the public interest. Corbyn (or his Labour successor) will be standing a programme of ‘state socialism-lite’. The hole in Labour’s programme is explaining Labour’s post-Brexit growth engine for the economy. If Brexit has knocked away the national strategy for attracting investment that successive governments pursued over 40 years, what replaces it? The Conservatives will have an answer, however imperfect, in ‘Global Britain’. What will be Labour’s? Maybe the sense of populist grievance will be enough. It will then have been a pretty dismal 15 years since the financial crisis, and maybe that will be enough to secure a change of government.

Of course Labour could argue that it wants to get back closer to Europe – to seek membership of the single market ‘Norway’ style, perhaps even to explore how Britain could re-join a reformed EU. Under the present leadership, this is unlikely. The state socialists now in control of the Labour party fear the EU would get in their interventionist way. They see Europe is an issue that divides Labour’s traditional support. Labour Leave voters back migration controls. Better therefore to concentrate Labour’s pitch on the safer ground of attacking the rich and big business, and defending the NHS and other public services. However, without any direct appeal to the Remain support among progressive middle class and well educated under 45s that produced such rich and unexpected electoral dividends for Labour in 2017, Labour may find itself in tougher territory than it was then. The outcome in 2022 may be a further stalemate in which the old two-party blocs with around 40 per cent of the vote cancel each other out.

In time, the negative long-term consequences of Brexit will become clearer. Slower relative growth will induce a feeling of national decline. Disillusion will grow among Leave voters that Brexit – and migration controls – have not delivered a better life for them. This may be a danger moment for British politics. A new populism of the right could emerge: more likely the Tory Brexiteers will move more onto the ground of populist nationalism as the fallacies of Global Britain are exposed. But the inability of Brexit Britain to manage the challenges of globalization will have become all too apparent.

Conclusion

Our conclusion is that conjuncture could provide the opportunity to remake the case for British re-engagement with the EU. The precise terms will be unclear and depend on developments within the EU itself. It may be a more confident pro-Europeanism than Labour demonstrated in the 1990s – less hung up on appeasing business and the City, less uncritical in its support for the United States, more willing to pool sovereignty to achieve progressive ends, for example on climate change or taxation of the global corporations and the rich.

This pro-European impulse may come from within the Labour party. Many of the new members who support Jeremy Corbyn are strongly anti-Brexit. Brexit has for the first time created a vibrant pro-European activism in British society. Europe could provide a key strand of a new generation progressive appeal once the older generation of state socialists have left the scene. Renewed British commitment to the single market would provide the growth and investment stimulus Britain will need, while offering at the same time higher standards of environmental and social protection that the Brexiteers will have unwound.

If Labour cannot make itself the vehicle for this new generation of progressive pro-European aspiration, surely the present two-party system will not survive. The 2017 General Election was seen as consolidating the two-party system. Brexit would still break it apart. As we have seen, Brexit was in part a consequence of globalization, but within a decade, reversing it may have become the only national strategy for Britain to manage globalization.

Notes

1.    (ec.europa.eu/citizens_agenda/social_reality_stocktaking/docs/background_doc). The paper drew heavily on Dutch experience and the work of the political scientist, Rene Cuperus.

2.    The tactic Cameron had used so successfully in the general election the year before, when he had warned of the danger of an SNP-Labour Coalition and Conservative Central Office ran a poster campaign with a miniature of Ed Miliband peeping out of Alex Salmond’s top pocket.

3.    See particularly Chapter 19 ‘Labour Isn’t Working’.

4.   For many Conservative backbench MPs, worries about losing their seats as a result of the huge domestic unpopularity of the ‘poll tax’ probably counted as much.

5.    ‘Great Britain has lost an Empire and has not yet found a role’. Dean Acheson speech, US Military Academy, West Point, New York, 5 December 1962.

6.    Apart from trade, the EU 27 anticipate treaties will need to be negotiated in three other areas: defence and foreign policy, internal security, and areas of common cooperation such as research and education.

7.    The British Cabinet is presently pressing for what will almost certainly be classified as a so-called ‘mixed agreement’ because it would embrace all areas of economic activity and affect member state as well as EU competencies: any such treaty will require a full ratification process in accordance with each member state’s constitutional requirements (e.g. ratification in Belgium by regional as well as the national parliaments and possible referendums in other member states such as Ireland). A free trade agreement in goods only would be simpler and quicker, but less beneficial to the UK.

8.    Lecture to the King’s Business School, 28 February 2018.

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