The UK Auto Industry and the EU

By Professor David Bailey, Co-Director, Aston Centre for Europe

The UK government likes to boast that the UK’s auto industry is undergoing something of a revival, in assembly terms at least. Indeed the UK’s auto sector has experienced investment on an unprecedented scale of late. This has come on the back of a major upturn in auto assembly in the UK – up by over 50% from a low point of around a million cars in 2009 – combined with changes in economic fundamentals which are encouraging firms to build more cars here and to source more components locally.

Remarkably, over £8bn has been invested by major auto assemblers over the last 3 years. It’s hoped that the industry will – by 2020 – overtake its historical peak level of output of 1.92 million cars (a record set back in 1972).

At the same time, the UK government will hold an ‘In-Out’ EU referendum at some point over the next few years.

The impact of EU membership on the UK’s auto industry was explored in a recent UK in a Changing Europe event organised by the Aston Centre for Europe (ACE) and the Aston Business School. Participants heard a mix of views, with arguments in favour of continued EU membership, and also of exit.

Those in favour of continued membership of a reformed EU, including Mike Hawes of the Society of Motor Manufacturers and Traders (SMMT), John Leech of KPMG and Tony Burke of UNITE the union (@TonyBurke2010)

Mike Hawes, CEO of the SMMT addresses the audience at the Aston Centre for Europe event
Mike Hawes, CEO of the SMMT addresses the audience at the Aston Centre for Europe event

pointed to what they see as significant benefits for the UK’s auto industry from staying in the EU, particularly in relation to investment, growth and job creation (all the things that the UK’s auto industry has been enjoying of late).

Other voices, notably Alex Story from Business for Britain (@alexpstory), and automotive journalist Neil Winton, argued that the UK auto industry would do continue to do well outside the EU.

The pro-EU membership argument stresses that EU membership boosts both the attractiveness of the UK as a place to invest, and the competitiveness of the domestic automotive industry. Not surprisingly, it notes that access to the Single Market is fundamental to UK auto manufacturing, thereby supporting sales and facilitating supply chain growth.

Those pro Brexit, like Neil Winton, argue that if Britain left the EU “it would quickly (within hours?) negotiate a free trade deal with little difference to the current arrangements”.

That’s probably correct; a trade deal with Europe would probably indeed be done. But a second, more powerful argument centres on regulations and standards. Those in favour of continued membership highlight that the UK needs a powerful voice at the EU level to make sure that the specific needs of the UK’s auto industry are considered.

Over 50% of UK auto exports go to the EU, so even if the UK were to leave and maintain access to the Single Market, producers in the UK would still have to meet European regulations so as to sell into Europe.

That would mean having to anyway follow European regulations rather than helping to shape them, which might mean German of French firms shaping them for their own benefit.

At the moment, it’s argued that UK-based niche firms like Bentley, Aston Martin andJaguar Land Rover can benefit from the British government having a seat at the table when regulations are thrashed out that impact on the industry. They would lose that voice if the UK was no longer a member.

On that, the UK’s auto industry has actually benefited from the government managing to soften tough EU carbon emission regulations for its smaller niche manufacturers.

Again, the pro-Brexiters like Neil Winton are sceptical of this argument, pointing to how the likes of BMW and Mercedes are “hugely successful in the US and China, with no say in the politics at all” (although it should be noted that China has tended to follow the EU’s own ‘euro’ standards on engines over time).

Those supportive of the EU membership point to EU bargaining power in trade negotiations being critical to improving access to international growth markets, thus helping major exporters such as Jaguar Land Rover, and in ensuring mutual recognition of standards.

Pro-Brexiteers argue that the UK acting alone could anyway more quickly cut its own trade deals with other countries than an EU that has to please 28 countries. That’s probably the case but some critical issues would remain on ensuring mutual recognition and greater regulatory convergence across technical standards and approvals procedures (the SMMT cites CEPR work suggesting that transatlantic auto regulatory divergences are equivalent to a tariff of 26%).

It was interesting that at the Aston event new technological opportunities and challenges around autonomous cars and data protection were highlighted in the European context by discussants, both in terms of standard setting for new technologies and in maintaining access to research networks developing such technologies.

Professor David Bailey chairs a discussion with Stuart Young of Wragge, Lawrence, Graham and Co., along with Richard Burden MP and auto journalist Neil Winton
Professor David Bailey chairs a discussion with Stuart Young of Wragge, Lawrence, Graham and Co., along with Richard Burden MP and auto journalist Neil Winton

The latter point relates to some other arguments for remaining in the EU, such as on ensuring access to EU funding and research networks that has supported R&D and innovation at businesses and universities in the UK, and the free movement of labour which enables UK-based firms to combine domestic and international talent (which was seen as especially important by some at the event given skills shortages in the UK industry).

Of course, that doesn’t mean that the EU can’t be improved, such as through the simplification of regulations and reducing complexities for firms operating in the EU, something that those in favour of continued membership were keen to stress.

Overall, the debate on the importance of EU membership for the UK auto industry boils down to two views. On the one hand is a view that Brexit is compatible with retaining a strong auto industry, as trade deals would anyway be cut with Europe and other countries.

In contrast is the view of the SMMT that “being part of a strong Europe is critical for future success” in particular by being able to shape regulations in Europe and ensuring mutual recognition of standards in wider trade deals.

While the Aston event focused on the UK car industry, the issues it raised – in terms of the single market, influencing regulation, trade, access to funding and networks for innovation, and the free movement of labour – will no doubt be relevant for other sectors in the UK economy as the in/out debate gathers pace.

* This article was previously published in the Birmingham Post 

*Aston Centre for Europe would like to thank the ESRC’s “UK in Changing Europe” initiative (@UKandEU) for supporting this event

Why is Jeremy Corbyn stealing the show? Because he’s the only Labour candidate saying anything at all

Tom Lehrer, the American satirical lyricist, sang of the Spanish republican struggle against Franco: “He may have won all the battles, but we had all the good songs”.

Jeremy Corbyn seems to have all the good songs and is winning too. I say “seems” as the polls are always wrong, and yet, with the exception of Yvette Cooper, we go on believing every single one of them. And that belief has dramatic political effects. Whatever the truth, Corbyn is turning the contest to become the next leader of the Labour party upside down.

The election was already in terrible disarray, even before the polling caused such a stir. There was uproar in the party and confusion between the candidates over George Osborne’s benefit cuts, refracted equally confusedly through Harriet Harman, the acting leader.

None of the three mainstream candidates for the job – Cooper, Andy Burnham and Liz Kendall – is really proposing anything, only reacting. And as regards their own leadership status, all took a falsely modest position when asked who they might have in their shadow cabinet in the event of a win, each refusing to answer the question. Then Cooper and Kendall said they would not serve under Corbyn if they lost, and Burnham said he might.

Corbyn’s rivals have made it clear that they can already picture him at the dispatch box. All they are doing is enhancing his leadership status and diminishing their own even further. And he is already naming his cabinet – Ed Miliband will have the energy portfolio!

So what began as a spectacularly ill-judged scramble for Ed’s fallen crown (and reliable rumour has it they were manoeuvring even before it slid from his head) has now become a mission to stop the “Syriza-Podemos candidate”. No Pasaran.

The standoff is playing out across a series of television debates (that everyone is now watching). These started off with the three front runners patronising the radical warhorse from the 1960s but now he is riding a rhetorical coach and horses through their platitudes.

How did this happen? Let us get one thing clear; it has absolutely nothing to do with being left wing or right wing. Corbyn is making such a strong media showing because of his style and language. And the others are coming across as mediocre because of theirs.

They have the rhetorically disadvantaged position (which they themselves chose) of talking about nothing in particular. Did we overspend in the last Labour government? Yes we did (Burnham). No we didn’t (Cooper). This was when much of Labour’s post-May 2015 recruits were seven or eight years old.

What is Corbyn talking about? Everything. More importantly, he embodies a wide and deep tradition in the UK left that we can all recognise and engage with. And, more importantly still, he does it with elegance, conviction, modesty and intellectual coherence.

The mainstream candidates are all extremely clever, but what do they embody? What image of them do we retain after a performance? What have they told us about themselves as a political persona and potential leader?

We know that Kendall urges realism, but we don’t really know what that means apart from not what Ed was doing. You can’t “see” realism.

As regards Cooper, the media snapped up remarks from one of her supporters about being a working mother and (almost) turned it into a spat between the two woman candidates. This sexist trivia gets media mileage because none of the mainstream candidates embodies a vision of a Labour Britain.

Burnham is apparently true Labour because he has a Northern accent – his flat As are getting flatter by the week. At weekends he goes back to where he was brought up and still meets up with the people he used to play football with.

This is dire stuff. Corbyn wants to talk about all the things that make people want to vote Labour or not, or join Labour or not, or consider joining Labour, and so on.

He is giving us all a lesson in politics: you have to represent something, you have to embody a political view or tradition, and you have to perform it to rhetorical effect. And you have to be – or at least seem to be – authentic and sincere while you do it.

All four of the candidates are all of these things. Corbyn is just doing it much better than the others. The poll may indeed be wrong, but he is doing everything right. I suspect Corbyn’s bedtime reading is not Marx’s Grundrisse but Aristotle’s Rhetoric.

This article was originally published at The Conversation.

The new kid on the block? The EU’s attempts at becoming a relevant actor in cyber security- Workshop report, by Simona Autolitano and Helena Farrand Carrapico

Cyber security is increasingly becoming a fundamental issue that requires urgent attention. Digital technologies, such as the Internet, play a key role in the European societal and economic landscape. Incidents within cyber space, whether intentional or accidental, are growing at an alarming rate and, more importantly, are likely to disrupt essential services, such as water distribution, electricity and health care. As Dutch power outage case of March 2015 demonstrates, we have become deeply dependent on critical infrastructures not only for our daily lives but also our survival[1]. Since the cyber-attack against Estonia, in April 2007, paralysed most of the infrastructure of the country, ​​cyber security has become the subject of closer attention for worldwide governments. Unsurprisingly, the former United States Deputy Secretary of Defence William J. Lynn has described cyber space as the ‘fifth domain of conflict’[2], and several States have started to develop cyber security strategies. The European Union (EU) is no exception to this general trend, having labelled cyber security one of the most prominent policy priorities within the European agenda[3]. The presence of numerous institutions, as well as a variety of state and non-state actors has led to the creation of a dense matrix of initiatives under the common roof of a EU cyber security policy. The 2013 Cyber security Strategy also represents an important step for the EU in its effort to become a credible international security actor. In this context, it is important to ask what kind of cyber security actor the EU is attempting to become.

In April 2015, the Aston Centre for Europe organised an international workshop that proposed to explore the EU’s emerging cyber security actorness. Contributions stemming from International Relations, Public Policy, Law, and Philosophy provided thorough analyses of the EU’s security initiatives and approaches to cyber space. Above all, the workshop revealed a picture of the EU as an actor still attempting to find its footing in a ‘crowded policy implementation space’[4], and whose attempts at developing a coherent strategy have so far hit an intra-institutional cooperation brick wall. Within this broad picture, the workshop identified five relevant key topics: the role of the EU in Internet Governance; the governance of Critical Information Infrastructures; the EU agencies and institutions shaping policy development; the direction of cyber crime policies; and the place of privacy within cyber security.

Where Internet Governance is concerned, the United States and other western countries have for some time now been attempting to fragment the Internet, by imposing jurisdictional regulations. As a response, numerous Latin American and Asian countries started to build coalitions in order to balance the American control of the Internet. In this context, the workshop analysed different approaches used for Internet Governance: if, on the one hand, the American multistakeholder governance is no longer widely accepted, on the other hand, it is uncertain whether a multilateral approach could be a solution. A ‘coalition of the liberal’ between the US, the EU and other western democracies is seen as a credible solution, although one that is difficult to achieve.

Regarding the governance of Critical Information Infrastructures, the workshop underlined the importance of these structures for the good functioning of European societies, as well as their increased reliance on digital technologies and public-private partnerships (PPP). Such degree of dependency has led to serious concerns over the security of critical infrastructures. In particular, the issue of whether a public good such as security can, nevertheless, be handled as a private one, raised considerable doubts. For instance, there seems to be an evident contradiction, within market logic, in using network redundancy in order to achieve resilience of critical information infrastructures. Notably, duplication of information is clearly in contrast with the business rationale of efficiency. Looking at the banking sector practices, this statement can only be confirmed. It is nevertheless important to keep in mind that profits are directly linked to the proper functioning of critical information infrastructures and, therefore, to their safety as well. Bearing in mind the inherent contradictions between private and public actors’ priorities, new solutions must be devised in order to promptly address critical information infrastructures’ vulnerabilities. The European Commission should play a more prominent role, especially in terms of coordinating, as well as strengthening European cyber culture. Workshop participants, however, advised against the idea of ‘privatisation at all costs’.

In order to understand which actors are currently governing cyber space, the workshop also explored the role of European agencies, notably ENISA and EC3. This analysis provided a deeper insight into the European cyber security decision-making process, as discussions focused on these agencies’ regulatory and policy shaping potential in the area of cyber crime and cyber security. Looking at recent developments in the field of cyber space governance, it emerged from the workshop that the traditional Justice and Home Affairs model of cooperation agencies might be slowly in the process of being replaced by a regulatory policy shaping agencies’ model. In this context, the consequences that this shift may have on the European governance of cyber space were explored, in particular in terms of transparency and accountability.

Cyber crime was another key topic discussed in the context of the workshop. The reduction of cyber crime through the enhancement of operational capability represents one of the main priority objectives in the 2013 European Union’s Cyber Security Strategy (EUCSS). It is questionable, however, whether the EU has indeed effectively achieved a higher degree of security resilience in this area. As an example, the operational success of EC3 in enhancing the capabilities of member states is continually challenged by cultural, political, legal and economic issues. The differences between member states’ legal frameworks makes the real time sharing of intelligence, data and information even more challenging. Another example of the EU’s limited action regarding cyber crime is its role in addressing Internet radicalisation and in countering cyber recruitment for jihad.

The right to privacy in the context of cyber space was also an important focus of discussions. Given the multi-layered nature of cyber space, cyber security incidents have the potential to compromise both data and services. The balance between security and privacy, however, is complicated to achieve. The European legal framework regarding the protection of privacy and personal data has demonstrated that the EU has clear difficulties in conciliating fundamental rights with the growing need for security. Such difficulties are particularly noticeable on two different fronts: at the EU level, with differences arising between institutions, and at national level, with member states developing diverging stances. In this respect, the harmonisation of European national laws seems to remain one of the biggest challenges for ensuring the right to privacy.

As declared in the 2013 European Cyber Security Strategy, the EU is attempting to emerge as a new policy actor within the cyber dimension. Nevertheless, there are still numerous issues that must be faced. In particular, some member states still do not recognise cyber security as a key priority. As a result, harmonisation, coordination, and the efficient governance of the digital space have remained difficult to achieve.

[1] On the 27th of March 2015, large areas of The Netherlands were left without electricity for 10 straight hours, affecting telecommunications, transport and hospitals. For further information please see: Last accessed on 5th May 2015.

[2] Lynn, W.J. III (2010). Defending a New Domain: The Pentagon’s Cyberstrategy, in Foreign Affairs, pp. 97–108.

[3] Renard, T (2014). The European Union: A new Security Actor? EUI Working Paper RSCAS 2014/45. Available at:

[4] Majone, G (1989). Argument, Evidence and Persuasion in the Policy Process. Yale University Press: New Haven.

From Dallas to Dynasty: the Le Pens and the future of the French Far Right

At times, the recent family arguments within the French Front National (FN) and the Le Pen clan have seemed more like an episode of Dallas than an ideological or strategic disagreement between its new and old guard.

However, their familial drama tells us a great deal about how contemporary French politics functions, or rather, dysfunctions, as well as the wider significance of this for the future of far-right politics in Europe.

Earlier this month, the 86-year-old founder of the FN, Jean-Marie Le Pen, repeated his scandalous 1987 remark that the gas chambers of the Holocaust were a ‘detail’ of history and that the Nazi collaborator, Philippe Pétain, head of the Vichy State from 1940 to 1944, was a patriot and not a traitor.

There are two things to bear in mind regarding these remarks, over and above any emotional reaction one might have.

One is that Le Pen loves to shock. He’s a street brawler and an old-fashioned bully in the style of Oswald Mosley’s Blackshirts. As such, he is finding his daughter Marine’s ‘respectable’ success since 2011 galling.

The second is that, by uniting the myriad far-right groups in the 1970s, Le Pen brought the FN to the very edge of power by 2010, standing in five presidential elections, and even going through to the run-off in 2002. His outbursts about the Holocaust and Vichy are motivated by his disagreement about the current FN’s strategy and ideology, and his anger is directed mainly at Marine.

Read the full blog post here.

Don’t care, don’t know? Young voters and the European Union, by Charlotte Marelli, Pauline Minaud and Helena Farrand-Carrapico

Throughout its 42 years of European Union membership, the United Kingdom became well know for its anti-European attitudes and behaviour. Whether it was due to its politics of non- alignment in deeper integration, or to general popular mistrust of European institutions, the UK quickly gained the reputation of acting as the ‘awkward partner’. With the run up to the May election, the nature of the relation between the UK and the EU will be again hold the centre of attention, given David Cameron’s promise of an in or out referendum. So far, public opinion coverage has tended to focus on the older anti- European electorate, and its contribution to busting UKIP results. Other segments of the electorate, such as younger voters, rarely feature as the focus of media attention. On the 26th February, the Aston Centre for Europe and InterLand, at Aston University, provided young voters with a platform to voice their concerns, as well as a thorough academic discussion on the young people practices of engagement/ disengagement with European affairs[1].

The keynote speech of the conference, by Simona Guerra (University of Leicester) focused on young people’s attitudes towards the EU in a time of economic crisis. In particular, she tackled the question of what determines young voters’ support for the EU? Simona Guerra argued that income and education definitely affect attitudes towards the EU. Young voters are more supportive of the EU when they are educated, as they understand the asset of a supranational organisation. In addition, young voters tend to have a positive opinion of the EU, especially when domestic institutions do not perform well. This tendency is connected with the expectation that the EU could improve the quality of domestic institutions. On this basis, it is interesting to note that despite being the social group that has been hit the hardest by the financial crisis, young people cannot be labelled as the new Eurosceptics. However, feeling European and identifying with the EU do not equal supporting it. Although young people will be more pro- European than the rest of the UK society, their level of active engagement with the EU remains low, as does their voting intentions. In another example, young people in Croatia have the lowest level of turnout for EU elections but are generally supportive of the EU. This apparent contradiction can be explained by the fact that the EU did not meet Croatians’ expectations in improving their unemployment rate. What can therefore be done to increase young people’s support for the EU? According to Simona Guerra, the EU should try to create opportunities at the national and personal level, as well as work on higher level of identification.

Another very important highlight of the conference was the reporting on a series of workshops developed by NGOs on the topic of young people and the European Union. Selina Brown (Little Miss Creative) and Anisa Hagdadi (Beatfreeks) work towards empowering young people and providing them with a voice through art and social activities. While presenting their recent activities, they also underlined the existence of a deep political education problem in the UK, (in particular, the lack of teaching on voting procedures), as well as the need to make young people co-creators of policy-making. Both NGOs concluded that young people do care about politics, although they feel unwanted in this field. Politicians want to develop projects for them, but no one is ready to engage with them. As expressed by Jill Robinson (InterLand), young people are heard, but not really listened to.

Their conclusions were confirmed by Stuart Fox (University of Nottingham), Nat Copsey (Aston University), Paul Coppeland (Queen Mary), Nicholas Startin (Univrsity of Bath), William Patterson (Aston University), David Harley (Aston university) and Anneliese Dodds (European Parliament)’s contributions, who view this generation as a very distinct one, marked by a high level of marginalization, be it political, social or economic. They reviewed the NGOs’ conclusions by stressing the inability of young people to find meaning in politics, as well as a way to get involved in this field. Although fully aware of the vital interest of their participation, young people do not know how to participate in the national and European political life. As argued by Stuart Fox, this is the reason why young people love and hate politics at the same time. To resolve this problem, speakers suggested focusing on the promotion of EU policies in which young people are deeply interested in (such as human rights and the environment). Another interesting way to encourage young people’s participation in the EU would be to raise awareness among young people on how its policies influence daily lives.

[1] Further information on the European Commission funded conference ‘Young Voters’ Views of the European Union at a Time of Change’ can be found at


The Politics of Negotiating EU Withdrawal

Getting to Grips with Reform, Referendum and Brexit: Part VII

Our last blog post established that the UK would probably seek to negotiate a new agreement with the European Union that combined elements of two existing templates: (1) bi-lateral sector-by-sector agreements (Switzerland); and (2) the European Economic Area model (e.g. Norway). But the UK will only be one player in this negotiation. And it will also find itself in a very weak position. Our concluding post today looks at the politics of negotiating a UK departure from the perspective of the other Member States and then takes a look at what leaving the EU would mean for the UK.

Negotiating British Withdrawal: the view from Brussels

We should not underestimate how much of a blow that a UK departure from the EU will be for the other Member States – and how furious they will be. Their irritation and anger is likely to weaken still further Britain’s negotiating position as it withdraws from the EU and concludes a new agreement.

The perception in Brussels and the other national capitals is likely to be that: (a) the British already had a very good deal from EU membership, even before the pre-referendum renegotiation; (b) at the cost of considerable domestic political capital on their own part, they cut the UK an even better deal; and that (c) the British have repaid their consideration and helpfulness with a slap in the face. The temptation to think: “Fine. Well f**k off then!!” is likely to be overwhelming.

Many emotions will be swirling around the Brussels political mix in the wake of a No result in a UK referendum, but, in the first instance, anger, resentment and a sense of betrayal will tend to predominate over sadness. The depth of fury will depend, in my view to a great extent, on the other Member States’ assessment of the actions of the Prime Minister and his cabinet during the unsuccessful “In-or-Out” referendum campaign that triggered the British withdrawal from the EU. Here again, the Scottish referendum offers an insight: it escaped no one’s attention that the Prime Minister and his cabinet did almost no campaigning to keep Scotland in the UK. We know very well that this was a political calculation on the part of the Conservative party, motivated by the belief (we’ll never really know whether it was accurate or not) that it would actually harm the “Better Together” camp’s prospects to take part. But this was not widely picked up by our friends overseas. Outside the UK, the Prime Minister’s absence from the fight looked like complacency, even recklessness. A similar logic will apply to the EU referendum. If the Prime Minister and his cabinet have campaigned hard to keep Britain in the EU and lost, honourably, that is one thing. However, if they are seen to have campaigned half-heartedly, particularly if some of them have gone so far as to advocate rejecting the renegotiated membership package, then they will find no allies in Brussels.

So the risk here is that Britain will find itself alone and without allies at a moment of great vulnerability. Perhaps this point needs underlining: any negotiations on leaving the EU, we will be completely dependent on the warmth and goodwill of our fellow Member States. A country of 65 million people negotiating with a bloc of 442 million cannot expect to have the upper hand. And the UK will have very few chips to to bargain with. It will no longer be able to ask for backing with a promise of future British support for someone else’s policy goals; no voting British representative will be present at another EU negotiation to honour such pledges.

Our last blog concluded that the UK was likely to seek to a new kind of agreement with the EU that would draw both on Swiss bi-lateral agreements and the European Economic Area model. An agreement that is not disadvantageous to the UK will be exceptionally hard (if not impossible to win) for the following political reasons:

1. Under no circumstances will the EU conclude a deal with the United Kingdom that is, or could be interpreted as being, an improvement on existing membership terms. This is an obvious point that is too often ignored in the British domestic debate. In other words, there will be almost no room for the UK to pick and choose what it wants from the EU acquis.

2. Moreover, the EU will want to make sure that the departing British get a deal that involves more or less no concessions from the EU and many concessions from the UK in order to send a very clear signal of discouragement to any other Member State contemplating secession.

3. Negotiations will be asymmetric. Trade with the EU makes up about 45% of total British trade, but trade with the UK will be worth only about 10% of total EU-27 external trade, a similar percentage to Russia in 2011 (before the sanctions began).

4. The EU already considers the Swiss model as it stands to be annoying. It takes up far too much of the EU’s time to negotiate endless bi-lateral agreements with just one player. It would prefer to move Switzerland towards the EEA model of full compliance and automatic compliance with EU law. This will also be the start- and end-point for any discussions with the UK, despite its larger size.

At the same, it is important not to exaggerate. Of course, the UK will manage to get some sort of a deal from the EU. The EU would even have a legal obligation to pursue a close relationship with the UK since on leaving the EU, the UK will become a European neighbour of the EU, and Article 8 of the Lisbon Treaty states that “the Union shall develop a special relationship with neighbouring countries”. It’s obviously also in the economic and political interest of the EU’s Member States to have a good relationship with the UK. But let us be clear on this point: it will never be as important to the EU to have good relationship with us, as it is for us to have a good relationship with the EU. For that reason, it is ultimately the UK that will be making the nearly all of the concessions.

Life Outside the European Union

So what will happen, if we do leave, once we are out of the EU? I am going to assume that Britain will have a relationship that looks more or less like the European Economic Area.

1. Many laws will continue to be made in Brussels, but without British input (curiously around 40% of Swiss legislation derives from EU rules, a far higher proportion than for the UK as Member State!). This in turn means that:

2. The democratic deficit will grow enormously since Britain will find itself enforcing laws and standards over which we have no control, and which, obviously, will no longer be made taking British interests and preferences into account. This could be particularly damaging for strategic sectors of the British economy like financial services, which in turn may lead to a gradual relocation of certain kinds of business to Luxembourg, Paris or Frankfurt. The UK will be reduced to attempting to lobby EU lawmakers with greater or lesser (probably lesser) success, just like any other external supplicant. So much for “sovereignty”.

3. Much of the existing body of EU primary law and secondary law will remain on the UK statute book for the foreseeable future, not least since in many areas it is the only regulation that exists. Revising such legislation will take many years, take up much parliamentary time and, in many cases, will not result in much change to it. Why would a future British government want softer standards for environmental protection, safety at work or the regulation of financial services?

4. Westminster will, of course, continue to exercise its full sovereign rights by rubber stamping new EU laws, putting a royal arms cover sheet on EU-derived acts of parliament and so on.

5. A court outside the UK will continue to make decisions that are legally binding on the UK (it will either be the EFTA court, with a British judge, or the Court of Justice of the European Union, without a British judge). European countries simply cannot escape the EU legal order.

6. The UK will not develop new regulations of its own for industry or commerce, since it would be expensive and pointless to have in place two parallel sets of standards. It will just be easier to import our regulation from the EU, as Norway and Switzerland do.

7. There will be economic adjustment costs to make, likely to be quite painful in some sectors. But here again we should not exaggerate since much of the domestic economy has no connection with European trade. In terms of GDP, the loss may not be much higher than a few percentage points. We have no reason to believe that the UK outside of the EU would be any more successful in international trade than it is now. The UK is not a top 10 trading partner for China or India. Germany is, incidentally, so it is obviously not EU regulation that holds back trade. The Germans sell things that developing countries buy, such as machine tools. We sell things that developing countries don’t buy much of, such as financial services. Even though the loss to British GDP would be far from catastrophic, quite why a government would be willing to shave a few percentage points off national income and wealth to prove what for most voters is an arcane point about sovereignty is, frankly, beyond my powers of comprehension.

8. More worrying in the long-term for an open economy like the UK would be the effects of a British exit on Foreign Direct Investment. A very significant part (but again, let’s not exaggerate so, I underline, by no means all) of inward FDI comes from non-European companies seeking access to the Single Market (e.g. cars, banking etc.) from a British base. And they would keep that access with an EEA-style deal for the UK. But what would be added to the balance of risk for firms in making investment decisions would be the knowledge that they would no longer have a government to speak up for their interests in the EU decision-making process. That matters enormously in certain sectors, where, without British participation, the outcome of negotiations on new rules in recent years would have been very different. Some good examples here are the Alternative Investment Fund Managers Directive (AIFND, for hedge-funds, private equity and the like), the Capital Requirements IV Directive or the Credit Rating Agencies Regulations. These rules matter a great deal for the UK’s financial services industry. For that reason, some potential investors in the UK would be likely to conclude that it would make more sense to invest in the EU proper, where their legitimate interests can be protected by strong Member State governments and helpful MEPs.

9. The EU and the Eurozone will continue to exist and to integrate further without us. And the decisions that our closest neighbours make will continue to affect us, whether we want them to or not.

10. As we have noted in previous blogs, a constitutional crisis is likely to break out in the United Kingdom, which may then splinter into separate countries. Scotland, Northern Ireland (perhaps by joining the Republic) and even Wales will probably join the EU.

11. Whatever remains of the UK will be a greatly diminished player in world politics. The European Union has been the most important single means of leveraging British power and influence in world politics. Within the EU, the UK is a hugely powerful and influential Member State, especially on defence and foreign policy issues. Outside of the EU, there is no top table to sit around – and we can just forget about leadership. The Commonwealth is not waiting for British leadership and in any case it is little more than a talking shop. Inertia may allow the UK (or its successor) to keep a permanent seat on the UN Security Council, although the argument for doing so will be ever harder to make. Our relationship with the United States will continue to encompass shared bonds of language, culture and history, but we will not really be any kind of useful partner for the US in world politics.

This list is already long and depressing, so we’ll stop there, even though there will undoubtedly be other adverse consequences following a British exit from the EU. On the other side of the balance sheet, we will be able to comfort ourselves that the UK government (or it successors) will have the trappings of sovereignty. They will enjoy the theoretical right to vote against new EU legislation. But they will not be able to exercise it and keep access to the Single Market. That said, we may save as much as 0.045% of GDP in membership fees.

So that’s what life outside the EU would look like. Taking all these factors into account, it is hard to escape the conclusion that leaving the EU would amount to little more than an act of mindless political and economic vandalism.

But let’s not end on a sour note. As all the posts in this series have made clear, there is an alternative for Britain: leading the charge for EU reform and working cooperatively with our splendid European allies. Happily, this is the position of the all the mainstream UK political parties. And, as this blog has argued over the past few weeks, there are solid grounds to believe that we can succeed in our aims here, provided that we remember that EU reform has to be good for everyone, and not just the UK. Finding that win–win solution is the challenge for whoever wins the election in May. We wish them sound advice – and good luck.


This post brings our seven-part Brexit behemoth to an end. One or two related posts may appear in the coming weeks before the election on what Brexit would mean for specific sectors. But that’s it for the regular posts for now. I’ve had enough of this – and I expect you have too. Yet I can’t resist a final word. Europe isn’t just about economics, trade, cost–benefit analyses and so on. It’s also about deep bonds of friendship, mutual appreciation, human warmth, shared experiences, cooperation, affection, and, of course, conviviality. Our friends and allies in Europe bring us all these wonderful things. Long may it continue. On that note: Bon week-end!

Professor Nathaniel Copsey
Dr Anne-Claire Marangoni
Dr Helena Farrand Carrapico

Seceding from the European Union & Negotiating a New Agreement

Getting to Grips with Reform, Referendum and Brexit: Part VI

Thus far our Brexit blog has dealt with the politics of renegotiating our relations with the EU, the substance of those negotiations and their chances of success. We have also examined the politics of an “In-or-Out” referendum and its likely outcome. We concluded that a renegotiated deal is possible (even desirable for domestic political considerations) and that a referendum on membership is winnable. But referendums are uncertain things and the UK is playing a dangerous game in toying with the uncertainties of a possible exit. For that reason, this week’s blogs turn to what happens if the referendum is lost and the UK secedes from the EU. Today we discuss the Lisbon rules on leaving the EU and the possible substance of a new kind of UK–EU agreement. Our next and final post in the series will consider the politics of a UK departure from the EU from the perspective of the other Member States and take a look at the implications for the UK (or its successor states) of seceding from the EU.

The Fateful Day Arrives

It is 16 June 2017. On a beautiful summer’s morning, Prime Minister Cameron is about to step out of 10 Downing Street to greet the cameras. Descending the staircase, he senses for a moment that something is not quite right. Turning his head, he sees the ghosts of Conservative leaders past looking down on him from a Tory Olympus that has magically appeared at the top of the landing. They are all shaking their heads. Ted Heath glowers and sulks. Uncle Harold – supposedly Cameron’s idol as Tory leader – sighs and then, with a studied Edwardian languor, agrees with Alec Douglas-Home that young David just wasn’t up to it, before lighting a cigar and announcing that, on as bleak a day as this, he’s going back to bed with a Trollope. Margaret Thatcher, as usual, doesn’t get the joke, and wonders if she’s just heard something improper, but nonetheless nods in agreement with her predecessors. Cameron pinches himself and the disagreeable vision evaporates.

As he steels himself for the assembled journalists, the Prime Minister sucks his lips, as he does when he’s anxious. The rolling news anchormen who are covering this momentous occasion think they can detect a look of fear on his face. The Prime Minister’s hands are clammy. As Cameron begins to speak, he wears the same nervous smile that we saw towards the end of his first and last serious campaign speech during the Scottish referendum campaign, back in 2014.

Today is the worst moment of his political life. As the Prime Minister opens his mouth to speak, the much-quoted aphorism of controversial 20th century Tory springs to his mind: “all political careers … end in failure”. He begins.

“The people of the United Kingdom have spoken. And it is a clear result: they have decided to leave the European Union” …

Oh dear. The Prime Minister has lost his referendum – and his job. It really wasn’t meant to be like this. But it doesn’t stop there. The UK’s most serious constitutional crisis in decades looks set to break out as not only Scotland, but also Northern Ireland and (maybe) Wales demand their own national referendums on secession from the UK in order to stay in the EU. The morning’s headlines make it clear: “Cameron loses referendum, job and country.”

Although the above scenario is plausible, as I wrote last week, this does not mean that it will come to pass. We will agonize endlessly over the meaning of 2014’s Scottish referendum in the run-up to any ‘In-or-Out’ EU referendum. But if we do, there is a serious risk of fighting the last war, as the cliché runs. There is one huge difference between the Scottish and EU referendums: turnout. Some 85% of Scots voted in September 2014, up from 64% in the UK General Election of 2010 in Scotland (more Scots vote for Westminster than Holyrood which only manages 50%). Most of those extra 20 percentage points were people who never vote, and who under no circumstances will vote for the status quo. Such voters are, in my view, very unlikely to turn out to vote one way or another on EU membership. It’s just not important enough. When we add to that figure the Office for National Statistics (ONS) figure of 2.34 million EU citizens living in the UK who will get the vote (we can’t very well not let them vote since they had the vote in Scotland) and who will vote for the UK to stay in the EU, things begin to look rosier. There’s no room for complacency, but let’s not let the Caledonian gloom spread too far. An UK-wide ‘in-or-out’ referendum can be won.

But just supposing we do vote to leave the EU after a referendum, what happens next?

Leaving the EU: the rules

When European integration began in the 1950s, it was supposed to be a commitment that would last forever, like a marriage. By working together, the Member States would not only be better able to find common solutions to the public policy dilemmas they could not tackle alone, but through the process would gradually be drawn closer and closer together in such a way as to make any more European wars unthinkable. That’s what I understood that famous phrase ‘ever closer union’, which seems to excite a lot of people, to mean. Europe has always been about cooperation. It’s a nice idea, isn’t it? For what it’s worth, on balance, I think the EU works pretty well. Not perfectly. But then neither does the British state, the French state, the American federal model or indeed any other system of government in the world. They have their pros and cons and their strengths and weaknesses, like anything else. And that’s OK.

By the time the Lisbon Treaty came into effect in 2009, the European Union had taken a few serious knocks. So Article 50 of that treaty recognized the changes that had taken place in attitudes towards the finality of the European integration process by setting out formal procedures for withdrawal for the first time. I think it’s fair to say that no one anticipated that the article would be put into effect in the near future (if ever) at the time that Lisbon or the failed Constitutional treaty were negotiated. The text of the article can be summarized as follows:

1. The European Council must first be notified of a Member State’s intention to quit the European Union (presumably quite soon after a UK referendum result is formally announced).

2. A withdrawal agreement must be negotiated ‘taking into account … the framework for [the departing Member State’s] future relationship with the European Union’. This implies that two agreements will be simultaneously negotiated: (a) withdrawal; and (b) a new EU external agreement, negotiated in the usual way under the terms of article 218 TFEU.

3. The withdrawal agreement is to be concluded by the European Council on the basis of qualified majority voting, after consulting the European Parliament.

4. The new external agreement would need to be ratified also by all the Member States’ national parliaments (all 28 of them – we’ll include the UK too since it goes without saying that Westminster would have to ratify the agreement too) in addition to the Council of the European Union and the European Parliament.

5. A two-year time limit from the notification of a Member State’s intention to leave the EU is set for negotiating the withdrawal agreement. This can be extended if the Council decides unanimously to do so.

Although it does not say so in the Treaty, in practice we would want the two agreements to come into effect on exactly the same day, to avoid getting stuck in a legal no-man’s land between membership and a new contractual agreement with the EU. Negotiating two agreements and getting the new external agreement ratified by 28 national parliaments will take a while, so it is likely that the European Council will extend the 24-month deadline. At the same time, no one is likely to want to draw out the process for longer than absolutely necessary. There will be other things to do.

A nightmare scenario for HMG (I’m going to drop the terms UK and British in talking about a post-EU political configuration for obvious reasons) would be to find itself locked out of the EU’s Single Market. But it gets worse. We would not have any other free trade agreements in place either. Trade is an exclusive EU competence. That means that all of our current FTAs have been concluded by the EU, for the EU, with the UK as a Member State. If we leave the EU, we also walk away from the FTAs that have been struck with countries like South Africa, Mexico, Chile and South Korea, not to mention the deals that are under negotiation with Canada, the US, India, Brazil, Argentina, the Gulf states and so on. Such a nightmare is at least theoretically possible. All the same, leaving the EU but not concluding another agreement with it seems a bit far-fetched: it would, after all, be highly damaging to both sides. So what we are really talking about is not so much ‘leaving the EU to join the world’ but ‘leaving the EU to conclude a new agreement’ that is not full membership.

The Substance of a New Agreement

Various templates exist for relations between the EU and third countries (i.e. non-EU Member States). Much has already been written about the pros and cons of this kind of relationship, in comparison with full EU membership. We will not dwell too long on these in this blog, but in brief the alternative options are: (1) membership of the European economic area, like, say, Norway, which provides access to the single market in exchange for membership fees plus full and automatic compliance with EU law (the Norwegians really do have to accept the whole lot with no say in how laws are made, beyond feeding into initial consultations); (2) Swiss-style bi-lateral agreements providing sector-by-sector access (in theory, the Swiss need not accept all EU rules; in practice, they have to since they would lose access to the Single Market if they did not keep up with EU law. And, by the way, the Swiss do not have access to the Single Market in financial services, amongst other things); (3) a Turkish-style Customs Union with the EU which is only valid for trade in goods; and (4) trade with the EU within the framework of WTO rules, which would entail fairly high tariffs for our food and car exports (15% and 10% respectively).

Realistically, HMG is going to be looking for a new kind of deal, reflecting the uniqueness of its position as a soon-to-be “ex-Member State”. None of the four obvious options will suit the post-exit authorities. And a pragmatic package deal for HMG would, I suppose, have to look like a mix of the Swiss and EEA deals. This kind of agreement won’t return sovereignty to the Westminster Parliament unfortunately, since many laws will continue to be made in Brussels. Such laws would also be made without any input from HMG or our MEPs, which I think would lead to a democratic deficit of an order of magnitude far beyond that of the present low turnout in European Parliament elections.

The only way to overcome this democratic deficit would be for HMG to go for what you could call an “ideological exit”, i.e. no deal with the EU at all and a trading relationship through the WTO. Only this can restore undivided sovereignty to Westminster (when it becomes the Parliament of England again). But the fact that it would inflict serious damage on great swathes of the economy (at least in the short-term) rules it out. Some of the controversial elements in the negotiations on a new deal with the EU could be:

(1) Free movement of persons (HMG will probably want to impose some limits on this, which neither the Swiss nor the Norwegians have managed to do, but there really would have to be some tangible political benefit to leaving the EU so HMG would push hard on this point – as far as I can see, without success);

(2) The size of HMG’s contribution to the EU coffers (yes you have to pay membership fees even if you are not a member!). Judging from what the Swiss or Norwegians pay I think a future contribution from our side would be around 35–70% of the current net contribution of £130 per capita. We would keep access under such a deal to things like EU research funding and education schemes (we do well out of research funding; yet we do very badly out of the education schemes as any Vice Chancellor can tell you), but we wouldn’t get money from the Common Agricultural Policy or the Structural Funds – mind you, we lose money on these two now, so the net benefit here would be positive, even if HMG would have to pick up the tab for agricultural subsidies. And, yes, there would be agricultural subsidies outside the EU since every developed country in the world practices agricultural subsidy (Australian drought assistance looks a lot like agricultural subsidy to me, in case you are wondering).

(3) EU social and employment legislation. We would need to keep some, and maybe all, of the existing regulations and directives in this area (i.e. the Working Time Directive and the Temporary Agency Work Directive, for at least two good reasons. First, whatever the hardline free-marketeers may think, employment rights are popular with voters. The UK already has just about the most flexible labour market of any developed country. I can’t see the public accepting much less in the way of employment rights here; indeed, if you think about trends in paternity leave, the direction of travel in the UK seems to be going the other way. Second, if we are not subject to the same rules as EU firms, then it will be argued persuasively that we have put our firms at an unfair advantage vis-à-vis their EU competitors. EU companies will not hesitate to gain commercial advantage through the courts by arguing that the spirit of the single market level playing field is not being observed (putting the boot on the other foot, our companies would do just the same). I don’t think that we can wriggle out of EU laws in this area.

(4) Access to the Single Market for agricultural produce and food. It is very hard to see how tariff-free access to the EU can be won for the food and drink industry, which is the largest sector of the manufacturing industry with £18.9 billion of exports in 2013.

This list of controversial points in the negotiations will no doubt be far longer than these four items. And having to make concessions on such sensitive issues will be politically toxic for HMG. I’m reminded here a lot here of the precedent of the 2004 accession countries’ talks with the EU – they were so heated at times that there were worries that referendums on EU entry in Poland or the Czech Republic might not be won. When it comes to exit talks, the question could become: why leave the EU if we are going to have to carry on following rules we don’t like?

The outcome of the exit negotiations may in fact be a draft settlement that is far, far worse than the deal that the UK currently has as a Member State. In that instance, I would not rule out the collapse of the government that had been carrying out the negotiations through a vote of no confidence. Fresh elections with the deal struck by HMG at the heart of the campaign could follow. Even a second EU membership referendum might need to be held, which would in many ways be the most democratic thing to do. In a simple “In-or-Out” referendum voters are being offered a choice between a reality (EU membership) and a purely hypothetical scenario (whatever leaving the EU would mean). With a second referendum, to be held after exit negotiations were completed, voters would be choosing between two real and detailed alternatives. That seems fairer. Incidentally, there is nothing to stop a Member State from pulling the emergency cord and bringing a halt to the exit proceedings provided that: (i) the withdrawal agreement has not yet entered into force; and (ii) the two-year term (or longer if extended by the European Council) for negotiating withdrawal has not yet expired.

Today’s blog and indeed our whole “Getting to Grips with Reform, Referendum and Brexit” series has been written (just like most of our national conversation about “Europe”) as if the other 27 Member States and the Brussels institutions did not exist. Yet clearly it’s not just British politics that matters for a withdrawal from the EU by HMG, but also the politics of the whole EU (and the EFTA countries too, if HMG tries to go down that route). Our next and final post will turn to how the rest of the EU is likely to behave during exit negotiations. It will also take a look at the practical consequences of secession.

Professor Nathaniel Copsey
Dr Helena Farrand-Carrapico
Dr Anne-Claire Marangoni

Can an ‘In-or-Out’ Referendum be Won by the Yes Camp?

Getting to Grips with Reform, Referendum and Brexit: Part V

Thus far our Brexit series has looked at the politics and substance of the UK’s upcoming renegotiation of its membership of the European Union and considered the case for a referendum on its merits. Today we turn to the questions of what the campaign issues are and whether a referendum can be won.

Lessons from Past European & British Referendums

If the precedent of the second Irish or Danish referendums is anything to go by, a British referendum campaign in 2016 or 2017 is likely to be fought ostensibly on the concessions that a UK negotiating team wins from our European partners. Of course, this is not the real campaign. In practical and pragmatic terms, the referendum is about whether the UK is happy to continue as a Member State of the EU or not. The package deal won from the other Member States won’t change the fundamentals of that relationship and an honest campaign should make this point clear. Leaving the EU would change things seriously – even if few voters would feel the effects in the short-term. But then this is not the real campaign issue either. The question at the heart of the campaign for most voters is the disarmingly simple: ‘do I like the government and Prime Minister’? To very a small extent, the answer to this last question will be determined by the bargain struck by the British Prime Minister and his team since success or failure in defending ‘British interests’ will impact more broadly on the overall picture of government credibility. But most of the campaign will be about domestic politics, just as all European elections and referendums are – and will be for the foreseeable future.

It’s more or less impossible to predict how popular a British government will be in 2016 or 2017. We might suppose that a recovering economy and improving wage growth will translate into a “feel-good factor” and an impression of competence. Yet the possibility of funding shortages in the National Health Service (NHS) and public education as part of an ongoing overall deficit reduction strategy complicate matters further. In short, who knows? Let’s leave predictions of government popularity to psephologists and British political commentators and stick to the safer ground of what has happened in referendums past.

Past precedent in European referendums cannot, however, offer much guidance on the substance of the No campaign in a British in-or-out referendum. In the 2016/17 referendum the British, unlike the Dutch or French or Danes, will be not be voting on a particular new Treaty and some advances in European integration, whilst staying in the Union (although I think the Danes worried in 1992/93 that the rest of Europe would go ahead without them), but on whether they want to stay in or leave. The No (and Yes) campaigns’ visions of what life would look like outside the European Union matter a great deal here. The Scottish referendum offers some guidance, but the news isn’t good if you want the UK to stay in the EU. It’s always easier to present a bright-and-breezy vision of a new life outside the EU (or UK), than it is to argue for a continuation of the status quo at a time when voters are manifestly dissatisfied with politics-as-usual. It will also be hard for British politicians who have spent the past 20 years telling the electorate that Europe is irritating but necessary, to paint the EU in a more positive light.

The problem for the Yes campaign is that the day-to-day experiences of most voters, at least in the short-term, would hardly change at all after a British exit. Being outside the EU would be very bad news for certain kinds of UK businesses since they would find themselves potentially having to comply with two sets of regulations (UK and European, in order to keep access to the Single Market) – although it’s more likely that we’d just stick with the European rules in the UK for the sake of ease. We’d lose control, just like Norway or Switzerland, over how those rules would be made, even if we’d go through the motions of rubber-stamping them at Westminster. We’ll look in detail at all of these kinds of technical issues – in other words what Brexit really means – next week. For now we are only interested in the politics of a referendum.

At the epicentre of any meaningful debate about the EU is the question of sovereignty. Yet communicating to the public the nuances of the debate on the question of British sovereignty in an accessible way is a Herculean task. Globalisation has changed the scope of what national governments can do. Thus a part of the argument is that true sovereignty (i.e. the right to make meaningful choices in a globalized world) for some decisions exists only when we share it with others to form a greater whole. By the same token, a national parliament that simply rubber stamps legislation coming from elsewhere before it comes into force, whilst retaining the theoretical right to amend or block it (never exercised – just ask Norway or Switzerland), is not really exercising independent sovereignty at all. Yet for some the theoretical right to say ‘no’ (or ‘yes’, but I always feel that Euroscepticism is more about saying ‘no’ – perhaps I am being unfair) is paramount.

Apart from the central question of sovereignty and the usual stuff about trade, it’s fair to say that leaving the EU would also be bad news for foreign policy and much else besides. But these are not game changing issues for most of the public. “Vote to stay in the Union to avoid future legislation from the EU over which we have no control and in which we have little say becoming law in the UK” is not much of a slogan. Nor is “A Vote to Leave the EU provides only the superficial trappings, not the substance, of sovereignty” likely to mobilise wavering voters. [Given that this is the best I can do, you’ll be relieved to read that I’m not considering a new career as a political campaign strategist.]

The Yes campaign could fall back on the fact that more or less all the British establishment will line up behind a reformed package of EU membership, particularly if it is the mainstream Conservative party line. Labour, the Liberal Democrats, the SNP, the Greens, Plaid Cymru, and all the parties of northern Ireland (except Sinn Féin) will also probably support continued EU membership, along with the Trades Union Congress (TUC), the Confederation of British Industry (CBI) and the Institute of Directors. That only leaves the populist insurgent UKIP and various fringe groups (British National Party, English Democrats, Socialist Workers’ Party etc.) to back leaving the EU. But without a positive vision of what continued (reformed) EU membership would look like, all this support will not amount to a clear Yes victory in the campaign, as the near-disastrous Unionist campaign of 2014 in Scotland showed. Some comfort for the Yes campaign can be found in two areas. First, unlike the SNP, UKIP is not a credible government-in-waiting with a proven track record – an exit endorsed by UKIP really is a vote for the unknown. Second, as noted in our first blog, a vote to leave the EU is a vote to break-up the United Kingdom. Enough said.

So much for the value of past precedent. With so many unknowns, this blog can inevitably only give a very approximate picture of the UK political scene in 12 or 24 months’ time. Let’s turn now to politics of the reform package.

Will the Reform Package be enough?

One thing is certain in the run-up to a referendum on a package of EU reforms: the British government of the day will not get absolutely everything that it wants. It may very well get most of it, including some major concessions, but it will not get everything because that’s not how negotiations work. The question therefore will be, is it enough? First of all, will it be enough for the Prime Minister of the day to endorse staying in the EU on the new terms? Or will he recommend a free vote taken on the basis of the conscience of the individual voter? Or will he controversially plump for a recommendation of exit? My view is that whilst individuals could be found in his party, his government and even his cabinet who favour any of these options, unless something goes truly awry, the chances are that he will have to endorse a vote to stay in the EU. There is no reason why anyone else in the EU should be willing to negotiate with him if he himself is not willing to endorse the deal to be struck. Thus support for the outcome of the negotiations is a necessary, but insufficient, condition for their success. Choosing to endorse a free vote would make a Prime Minister look weak since the only reason he’d have for doing so would be the absence of control over his party. Backing a vote to leave the EU on the outcome of the negotiations would certainly be brave, but it comes with the sense that the Prime Minister of the day would be saying: ‘I’m not very good at negotiating; I have failed’. Voters don’t like governments that look incompetent, even if a government calling for an EU exit by referendum would be almost certain to get its way.

One technical element is important here too: the legal basis of the deal struck in Brussels. Past blogs have already established that Treaty change is impossible. So that means that the UK would be looking for an agreement with the other Member States that ideally has some legal force. European Council “declarations” are politically rather than legally binding. The problem here is that unless the package deal is legally binding, it is “just a piece of paper”. This will be an important determinant of whether the package Britain wins is “enough” for the Conservative party. Failing a legally binding agreement, the UK government will have to get some cast-iron political guarantees from the other Member States, which to an extent gives them a walk-on role in the political theatre of a UK referendum campaign to which we will briefly turn below.

Notwithstanding all these doubts, I would imagine that going into a referendum campaign, the Prime Minister of the day could take a leaf out of Harold Wilson’s book and echo his words to British voters in 1975: ‘after long, hard negotiations, [the government] are recommending to the British people that we should remain a member of the European Community. We do not pretend, and never have pretended, that we got everything we wanted in these negotiations. But we did get big and significant improvements on the previous terms’ (Referendum Booklet, 1975). Fine.

British Public Opinion and EU Reform

The second test of whether a settlement negotiated by a British Prime Minister is ‘enough’, or not, is, obviously, whether a majority of voters decide to endorse it. Assuming the government of the day backs the new settlement, and that it includes a few important concessions, on the face of it, all the signs are that a clear majority of Britons would vote to stay in. YouGov polling conducted over 18 months between December 2012 and June 2014 consistently showed a very clear majority of Britons in favour of staying in a ‘reformed EU’. With 57% in favour of staying in and just 22% in favour of leaving after renegotiation (and 21% undecided), the case seems pretty overwhelming. But polling can be volatile. When it came to staying in on current terms, matters were much more nuanced, with 28–44% of voters favourable to staying in, and 36% to 51% in favour of leaving. Putting these recent YouGov data into longer historical context, we can use Eurobarometer data from 1973–2014 to map positive or negative sentiments towards membership of the EC/EU. Unsurprisingly, these data show that for the vast majority of voters the EU is not particularly important or something that they follow very much. Those who ‘don’t know’ whether they like the EU or are neutral towards it amounted to between 24% and 61% of voters over the 40-year period. What the data also show is that the great majority of British voters change their view of Europe over time, waxing and waning in their support for the EU. Counter-intuitively, over the long-term the Europhiles seem to outnumber the Eurosceptics.

The View from Outside During the Campaign

An important, but, of course, very far from decisive factor, of a referendum campaign would be the attitude of other Member States and the European institutions. Although the British public would probably not be particularly bothered about what Jean-Claude Juncker as President of the Commission or President Hollande of France or Chancellor Merkel of Germany had to say, it goes without saying that their endorsement would be useful. There can be little doubt that the College of Commissioners would ban all its members from making disobliging comments about British membership of the EU. And the Member State governments would follow the lead of large Member States and EU institutions. Everyone in Brussels would know that the British Prime Minister would be facing the challenge of his political lifetime, would admire his courage and would rally round. This is, of course, assuming, as we will, that a British Prime Minister was arguing in favour of continued membership. Beyond the EU, I am sure that Britain’s other close allies, such as the US or Canada, would be in favour of continued membership. But I would be astounded if they broke with convention by intervening directly in British domestic politics.

Summing Up

As we have seen, a British ‘In-or-Out’ referendum on the basis of a new settlement could be won, but referendums and the campaigns that come before them are pesky and uncertain. EU politics is notoriously obscure and does not lend itself very well to a popular campaign for one thing. For another, voters seldom tend to answer the question that is put to them, preferring instead to see it as a proxy for a wider question of ‘do I like the government that is asking me this?’ By illustration, you can ask yourself how close the Scottish referendum would have been if Gordon Brown had been Prime Minister instead of David Cameron. As we have seen, much would depend on the party politics of the government of the day (which could be a coalition involving more than one party), the attitude of the opposition, the role of the media, the state of the economy, the level of general confidence in Britain and its place in the world and so on. These are all too uncertain to hazard. Much of British business and nearly all the trade unions would be likely to back staying in. Predictions that venture much beyond this are harder to make, but I won’t let that stop me.

Hazarding the Result of a Referendum

All things being equal, if the baseline scenario sketched out above comes into force, and provided nothing upsets the campaign, an educated guess based on currently polling is that (what the hell – let’s put a number on it) between 55% and 65% of British voters would decide to stay in the European Union. On balance, I still think this to be the most likely scenario, provided that an EU referendum campaign is headed up by a Conservative Prime Minister on the Yes side.

Yet the very fact that there are so many unknowns and that the stakes have been set so high means that we have to consider the realistic possibility of a British exit from the European Union. It is to the issues of negotiating exit and the alternatives for the UK to full membership of the EU that the next and final installments of this blog will turn.

Professor Nathaniel Copsey
Dr Helena Farrand-Carrapico
Dr Anne-Claire Marangoni

An ‘In-or-Out’ UK Referendum on EU Membership

Getting to Grips with Reform, Referendum and Brexit: Part IV

Last week our Brexit series looked at the UK’s upcoming renegotiation of its membership of the European Union, which is likely to be packaged as EU ‘reform’ (and quite right, too) to appeal to the other Member States. It concluded that an incoming Conservative (or Labour) government would be likely to achieve most of what it wanted during negotiations with the other Member States. Labour has pledged not to hold a referendum on the outcome of the negotiations. This is very sensible in my view since, bluntly, there is no way that a Labour administration could win such a referendum. We understand that a Conservative government would move from renegotiation to referendum in pretty short order. Indeed recent reports in the Daily Telegraph last week indicate that the Prime Minister is now looking at going for a referendum as soon as 2016, probably around 12 months after the General Election of May 2015. This week’s blogs look at the politics of Britain’s possible in-or-out EU referendum, beginning today with the case for a referendum.

The Case for a Referendum

If you read my reflections on the referendum in Scotland last September, you will know already that I really don’t like this particular tool of public consultation. My grounds for opposing the use of referendums are extensive, but let’s just focus on one point of principle for now. It is this: referendums pose a serious threat to any system of parliamentary democracy. Indeed they have always done so, reflecting their origins as revolutionary and Bonapartist instruments designed to give credence to the ‘authority from above, confidence from below’ school of government. That said, if we leave behind the age of revolution and empire in France, and return to the UK in 2015, there is a reasonable case to be made as to why I think that, despite all my usual misgivings, we need to hold a plebiscite on our membership of the EU. A number of points may be made here.

Firstly, and most importantly of all, holding an EU referendum matters fundamentally for the politics of the Conservative party. British Conservatives have struggled with “Europe” for 30 years. Europe laid low the government of John Major in the 1990s, accounted for a part of William Hague’s lacklustre result in the 2001 General Election (remember 12 days to save the pound?), distracted the party from forming a serious opposition to Labour for much of its 13-year spell in government and now threatens (again) to split the party completely. There isn’t very much remaining of a pro-European wing in the Tory party these days. Today’s approximate dividing line on Europe falls between the hardcore of perhaps 100 MPs who more or less publically advocate leaving the EU if nothing changes in British membership and the 200 or so more pragmatic members of the parliamentary party who feel that EU membership is Britain’s least worst option. Of those 100 Eurosceptics, perhaps 75 (who may be more careerist than ideological) could be won over by a referendum in which in the British people vote to remain in the EU. Following a resettlement, the remaining 25 or so hard-sceptics would either have to toe the party line – or leave the Conservative party. And, of course, if the referendum puts a British exit on the table, then the issue is simply settled the other way – and the Tory party becomes the party of the status quo, which would be outside the EU. Either way, the referendum would have a decisive effect on the internal politics of the Conservative party.

And if we don’t have a referendum under a Conservative government in 2016 or 2017, it seems likely to me that an opposition Tory party led by a new leader would be more Eurosceptic, possibly even advocating an EU exit in the General Election of 2020 without a referendum.

You might ask whether it is really worth risking a British exit from the EU on uncertain terms to save one of Britain’s largest political parties from meltdown. This is a valid point, but we shouldn’t underestimate the importance of the Conservative party set against the British political and constitutional landscape. The Tory party has existed in one form or another since the late 17th century, which must make it just about the oldest political movement in the world still to be represented in a national parliament. Conservatives represent a significant part of the electorate and guard interests that will continue to exist for so long as Britain is a parliamentary liberal democracy and a free market capitalist economy. That the body politic should enjoy rude health is dependent on the vitality of its constituent parts.

Second, a settlement on whether Britain is to be a Member State of the EU or not matters crucially both for the UK’s capacity to play an influential role in the EU, and for Britain’s place in the world more generally. On the former, our capacity for influence is undermined if the other Member States think that we are about to leave. As Herman Van Rompuy, the last President of the European Council, noted: “How do you convince a room full of people, when you keep your hand on the door handle? How to encourage a friend to change, if your eyes are searching for your coat?” Quite. Membership of the EU only makes sense if we are going to make a decent fist of it. Outside of the European Union, the UK’s capacity for influence in world politics would undoubtedly be seriously diminished, a point that has not been lost on our American friends. So let’s settle the issue of membership, through a referendum, and get back to doing what Britain does best: setting the agenda in Europe and winning the argument.

Third, there is a sound (albeit perhaps theoretical) argument to be made that it would be useful for Britain to have a public debate on the European Union (talking over what Tony Benn used to call ‘the issues’). On the face of it, it has been a long time since the UK referendum of 1975 and the EU has changed a hell of a lot since then. Public debate may be no bad thing, but we should not get too excited here. One of the most frequently aired, but sadly misinformed, opinions in Brussels is that the British (and all the peoples of the EU) would love the Union if they only understood it more. In other words, a thorough-going understanding of the Qualified Majority Voting Process, questions of subsidiarity and proportionality, direct and indirect effect and so on would make voters see how much they love and value Europe. I’m really not sure about this. Back in 1993, data from the second Danish referendum seemed to show that on some issues the more voters heard about Europe, the less they liked it. Or more truthfully perhaps, the more bored they were. In a British context, the Scottish referendum underlined the public’s lack of interest in nuanced questions of policy (depressingly, the vote seems ultimately to be have been swayed by fears about state pensions). And, to reiterate, the experiences of past EU referendums in France, Denmark and Ireland all show that the result is determined largely by whether they like the government that is asking them the question or not.

Fourth, and least important of all, is the substance of the re-negotiations on which the British public would ostensibly be voting. A reformed EU is still overwhelmingly going to look like the old EU. This is bad if you are a Eurosceptic and good if you are a Europhile. The Foreign Office’s Balance of Competences review showed (more or less) that Britain’s relationship with the EU is working fine as it is. Tinkering with access to the British welfare state is mostly political theatre (with no intended disrespect to the fine institution of political theatre). There is no substantial evidence of systemic abuse of the British welfare state since the great number of EU citizens move to the UK to work, not to claim benefits. Naturally, there is plenty of anecdotal evidence of the ‘my constituents tell me’ sort. I would hazard that the red card/yellow card/orange card rules on national parliaments will not attract much of the public’s attention, despite their intentionally matey locker-room nomenclature. Few voters will be sufficiently interested in completing the Digital Single Market or the Single Market in Services. There is something to be said from an insuring point of view that the UK needs some formal protection from an over-zealous European Central Bank, through formal guarantees that non-Eurozone countries will not be put at a disadvantage. But here again, it’s pretty technical stuff, not the popular politics of a referendum campaign.

A final point is more optimistic. The EU has been through a dreadful crisis in recent years (you can read all about it and its effects in my exciting new book. It’s reasonably priced and makes a good birthday/bar mitzvah/bat mitzvah/Christmas/Easter/name day gift). Above all else, Europe desperately needs a fillip in the form of a renewed political will to achieve collectively what we cannot achieve by ourselves. A vote of confidence would also be very welcome. Britain’s reform proposals could, we hope, achieve the former. And a Yes vote from those irredeemably sceptical Brits would provide the latter.

Can a referendum to stay in a reformed EU be won? Or will the UK head for the exit? What will the campaign issues be? Which side looks most likely to triumph? These questions will be the subject of tomorrow’s post. Join us then.

Professor Nathaniel Copsey
Dr Helena Farrand-Carrapico
Dr Anne-Claire Marangoni

How Likely is Britain’s EU Reform Agenda to Succeed?

Getting to Grips with Reform, Referendum and Brexit: Part III

Thus far our serious of blogs on Britain and the EU has focused on why the issue matters for the UK General Election of 2015, the process of reforming the EU and what the British are likely to ask of their European partners. This post focuses on how likely the negotiations with our 27 European Union partner countries are to succeed.

The Impossibility of Treaty Change

Since the Prime Minister has promised ‘meaningful’ change to the EU, he and his cabinet may be of the view that meaningful change equates to Treaty change, under the Simplified Revisions Process. No one is suggesting that an Intergovernmental Conference should begin or a Convention take place to discuss a new Treaty. The Simplified Revisions Process would involve all 28 Member States, plus the European Free Trade Area (EFTA) countries of Norway, Lichtenstein, Switzerland and Iceland. Pitting the UK against 31 other countries, all of which could potentially ask for anything from the UK in exchange for what it is asking for, just seems to be asking for trouble. But even more importantly, in our judgment, there is quite simply no way that Treaty change can be agreed before 2017, and, quite possibly for some time beyond that date. Germany is firmly opposed to any change to the Treaty, along with all the Member States we spoke to. In the first place, this opposition to Treaty change is the result of deep opposition to any attempts to change the fundamental principles of the European Union (i.e. the four freedoms, the Community method, and the balance of power between institutions and Member States and so on). In the second place, opposition to Treaty change stems from the domestic politics of the Member States. To illustrate with just one example, for the Republic of Ireland, the fact is that if they have to choose between Britain leaving the EU as a consequence of not getting Treaty change and the need to build a hard border with the north, then they will opt for a hard border with the north (this, of course, assumes that Northern Ireland does not leave the UK). Advocates of Treaty change need to bear in mind that in the wake of the Eurozone crisis, almost no Member State will be able to get a Treaty change through domestic ratification procedures, particularly where a referendum is needed, as is the case in Ireland. Voters are angry as the Greek elections of the 2015 or the recent protests in Spain and Italy have shown. In sum, whilst the other Member States are very likely to support British suggestions for reform of the EU, they will draw the line at Treaty change.

How Likely is a Reform Agenda Without Treaty Change to Succeed?

Putting aside Treaty change, when it comes to EU negotiations, we are in well-charted waters. The British have been remarkably successful at getting what they want out of the EU over the years. Taking stock not only of how the EU has evolved since the 1980s (it’s become English-speaking since the 1990s and steadily more liberal), but also the sheer volume of derogations, opt-outs and opt-ins that the British have won, there are solid grounds for optimism. Although there have been a few negotiations in the recent past that have not gone the way of the British negotiating team (i.e. banker’s bonuses), over time the balance sheet is solidly in Britain’s favour.

During the course of our investigations, we surveyed the attitude of the other Member States and the European institutions towards Britain’s proposals for reform. Taken at face value, a good part of the possible reform agenda to be put forward by the UK is likely to find favour with the Member States, as well as with the Commission (whose ideas some of the proposals are anyway), and with the European Parliament (which will be unlikely to oppose a clear majority of Member States). Moreover, even though the rest of the EU views the British as occasionally annoying (sometimes very much so), all of them would much prefer to keep the UK inside the European Union. Even if the emotional commitment to keeping the UK inside has been watered down by what are perceived in Brussels as distinctly non-communautaire actions (i.e. attempting to veto the fiscal compact or the unfriendly way in which the UK has completely distanced itself from the package of aid needed to save the Euro – which was a pragmatic if not neighbourly move on Britain’s part), the other Member States would be faced with serious problems if the UK were to leave. Of course, these problems are of a much smaller order of magnitude than those that would face the UK if it were to leave (which will be unpacked in explicit and gory detail following next week’s posts on the politics of an in-or-out referendum), but if the choice is between relatively painless concessions to the UK or a British exit, the Member States will choose the former.

To pick just a few of the reasons for keeping the British ‘in’: (1) the UK is a net contributor to the EU budget whose contributions would have to come from elsewhere (step forward Germany, France, Italy, the Netherlands, Sweden and the usual suspects!); (2) the UK is a staunch ally of the liberalisers and deregulators who run the European Commission; (3) Britain has the most developed capital markets of any EU member state and is a major source of Foreign Direct Investment as well as the EU’s investment hub; (4) when it comes to negotiations, the UK is unafraid to say difficult things that smaller Member States would like to say but prefer to keep quiet about; and, (5) in terms of grand strategy, the UK preserves a balance between Europe’s largest Member States. In bi-lateral terms a British exit would cause a whole range of seriously pesky policy problems for most Member States. Denmark, Sweden, the Netherlands, even France and many others would worry that their publics, who have always been more sceptical of the value of integration than their political leaders, would also push for the exit door. For the Spanish, the British overseas territory of Gibraltar is already a major headache that would not become any easier to handle if Britain leaves the EU. Spain would probably have concerns about how to handle the status of the 300,000 or so Britons living in their country, not to mention all those ex-pats in Portugal, Cyprus or France. The same is true in reverse for the 500–700,000 thousand Poles living in the UK, not all of whom have yet acquired British citizenship. The Dutch worry about possible damage to gigantic Anglo-Dutch concerns like Unilever or Shell. In short, nearly all the Member States have something to lose if Britain heads for the door.

A final point here is ideological. The history of the European integration process shows us that it has always been considered to be irreversible. The ideological commitment to Europe matters, especially in Germany. If you follow this argument further, even though the other Member States know that they might have to make a few concessions to keep the British in that perhaps appear to represent a slight regression from what has been achieved until now, this is far better than the alternative of a British exit. There is no historical precedent for a large and important Member State leaving and a British departure would, I submit, be worse for the EU than a Greek exit from the Euro or indeed the EU. The other Member States also know that politics in the Member States changes and that national governments and Prime Ministers come and go. They also understand the pressures that a Conservative Prime Minister is under from his own party, and from public opinion. Why risk a British exit? Whatever way you look at it, keeping the British in the EU by endorsing London’s reform agenda looks, on the face of things, to be the easier option.

Yet Britain’s tactic of implicitly or explicitly threatening exit as a bargaining chip if it does not get its way comes with serious risks. Let us be very clear: this is a departure from the usual way of negotiating in the EU. Britain, like all other Member States, has negotiated hard in the past and either won the argument or simply worn its fellow Member States down to the point of surrender. An old stager once likened the strategy for British negotiations of budget settlements and its treasured rebate to the Battle of Rorke’s Drift. Time and time again, the Member States come and keep coming, but are eventually exhausted by Britain’s dogged defence of its position in the face of overwhelming odds. Only once, in the British ‘renegotiation’ of April 1974 to March 1975, has the notion of the UK leaving the EU ever been seriously entertained. No one in Brussels will want this style of negotiation, which some could argue falls under the category of a kind of blackmail, to become standard practice. To mitigate this, a really convincing case will need to be put forward by the British team as to why its package of reforms are good for the whole of the EU-28, and not just the UK. This last point is all the more crucial given that the other Member States think that the UK already has a very special deal as matters stand.

Two further risks of the current approach deserve mention. In the first place, the UK may be overestimating the capacity and the desire of German Chancellor Angela Merkel to deliver what the UK wants. Germany may be Europe’s reluctant hegemon, but not only is it just one very important player amongst many, it also is worth noting that the German Chancellor is emphatically not the only player in German politics – and traditionally German Chancellors have much less independence of action than British Prime Ministers. A second risk lies in undervaluing the European Parliament whose support is needed to amend European regulations and directives, for example, on access to the welfare state. Leaving the governing European People’s Party group in the European Parliament was a decision where David Cameron ultimately had little choice, but this has taken a major chunk of British MEPs ‘out of the game’. The European Parliament also feels understandably resentful of the casual way in which some British MPs dismiss its very right to exist and take part in the EU decision-making process. Even if he is negotiating to change the EU, the British Prime Minister must deal with the EU and its institutions as they are, and as he finds them, rather than as he would like them to be.

For all of this, the most sensible judgment based on the current balance of probabilities is that, short of Treaty change, the UK can win a substantial reform package from the other Member States. The question that immediately follows is whether such a substantial package of reforms will be enough for the governing party, and enough for the British people. The referendum intended to answer this question shall be the subject of our next blog post. The series continues next week as we turn first to the politics of a possible British in-or-out referendum, before concluding with a look at the different options for Brexit – and what they really mean.

Professor Nathaniel Copsey
Dr Helena Farrand-Carrapico
Dr Anne-Claire Marangoni