The establishment assumption that Britons always vote with their wallets has proved a fallacy. The poll is a triumph for disruption.
After the panic and the howling in high places, what happens next? The in lobby’s bluff that we should stay in “a reformed EU” has been called, because it turned out there was no reform. Now parliament must be summoned to repeal the 1972 European Communities Act. The government must activate article 20 of the Lisbon treaty, legalising a member’s decision to withdraw. But it will also activate article 50 on the two-year timetable for renegotiation.
That will instigate the mother of all deals: between a traumatised EU and a shattered Cameron, cheered on (if he stays) by a gleeful Tory party. Trade between Britain and the rest of the EU is massively advantageous to both sides, marginally more so to the rest of the EU. There are fierce arguments over fish, farming, banking regulation and migration, as now, but there is no question that a new single market deal must emerge.
The options for such a deal are set out in dispassionate detail by Roger Bootle in his new edition of The Trouble with Europe. They embrace such arcane creations as a European “single-market-lite”, a Norwegian option, a Swiss option, an American option, and a free trade area with no labour mobility. Bootle’s guess is for the last, an ad hoc deal like those nowadays between the EU and the rest of the world.
Anyway, there would have to be a new treaty that meets, to some degree, Cameron’s original negotiating demands. They embraced parliamentary control over EU laws, an end to open borders, reduced regulation and safeguards for the City of London. The new treaty would be put, as is customary in the EU, to a second referendum.
Britain may still withdraw from the council of ministers, where its much-vaunted “top-table influence” has had zero effect. It could leave the commission, though for sure its lobbyists would remain in Brussels. The British economy might save £27bn in euro-regulations and/or lose 9.7% of gross domestic product, such being the spurious statistics now championed by each side. But parliament would have regained a substantial degree of autonomy.
One significant outcome of such a new deal is that the rest of non-euro Europewould be goaded into following Britain’s path. This would almost certainly be fed into the EU’s own next round of treaty amendments. Meanwhile the eurozone itself would be jolted. Germany would come to terms with its incompetent management of the zone. It might push the Mediterranean states into floating currencies and solidify a more homogeneous European core.
The essential point is that none of this would happen if in 2017 Britain votes to stay in the EU. Voting for the status quo would prop up the Lisbon treaty, that hoary monument to “ever-closer” federalism. It would exacerbate continued conflict between the need for free trade and today’s fervid Euro-nationalism. It would mean no change.
Last year’s close-run Scottish referendum was an object lesson. It panicked London into offering perhaps half of what a pro-independence vote would have won. It nudged devolution-lite towards independence-lite. A yes vote would not have secured true independence: it would have led to added layers of Scottish sovereignty in a more distant relationship with London. Cameron was shrewd last summer to make serious concessions to the Scots, and would be shrewd now to make more, including financial autonomy that might dent the nationalists’ popularity. Were the EU (which means Germany) equally wise it would treat Cameron as he treated the Scots. But there is no sign of that happening. Cameron’s demand for a “fundamental change in relations with Europe” was not some rightwing agenda. It chimed with at least half of British opinion. Europe’s trouble is that its institutions are not flexible enough to respond to such demands. It is a statist oligarchy.
Only by voting to “leave the EU” will Britain open up a real opportunity to negotiate a new deal with Europe. Such a vote would initiate not just a retreat from federalism, but an escape from the perpetual misery that is European policy at present. Rather than hacking through an ancient jungle, negotiators would seek new agreement across a meadow cleared of weeds.
Bootle rightly pleads for a distinction between Europe’s “identity, culture and civilisation” and the “particular set of political arrangements and institutions” by which Europe is governed. The EU’s fixation on ever-closer union was fit for purpose half a century ago. Today the common currency has driven a quarter of Europe’s young people into unemployment. Anyone who goes to Greece and sees the collapse into indigent dependency of a once-proud nation cannot cheer the euro or sing Beethoven’s Ode to Joy outside the European Central Bank.
Seen from Britain the EU has become a sham. It cannot handle Syrian migration. When George Osborne talks trade in China, the EU does not get a mention. When Cameron sends his drones to bomb Syria, he does not seek common ground with EU defence chiefs. The EU has long ignored, or rather harboured, personal and corporate tax evaders.
Some version of a new single market must be found. But no search will even begin if Britain votes to stay in the EU. Things will dribble on as before. Only a vote to leave offers negotiators the leverage they now so clearly lack. It would be a vote not to leave absolutely, rather for a new relationship between the nations of Europe and their supranational governors.
Any agnostic observer of the “European” argument must see sense in the two-referendum solution. Pro- and anti-Europeans can surely agree. They might fall out over a second referendum, but not over a first. Cameron has lost the battle for reform. A British vote to leave has become the precondition for a new Europe.