With some modest EU reform Britain could stay in Europe while obtaining the deal it wants—all that is needed is flexibility from both sidesby Anatole Kaletsky / July 14, 2016 / Leave a comment
Published in August 2016 issue of Prospect Magazine
If there is one fixed point in the hurricane of politics in post-referendum Britain it is the dogma that referendums are sacrosanct. The people, it is claimed, have made an irreversible decision to take Britain out of the European Union—and however dire the consequences of this decision, democracy requires “the people’s will” to be obeyed. This dogma is a travesty of true democracy. Insisting that a referendum vote can never be reversed or even challenged conflicts with history, with law and, most importantly, with democratic principles. In genuine democracy nothing is ever irreversible, since every decision, regardless of the majority that supports it, is always open to debate.
This principle of continuous challenge must be restored—and quickly—if Britain is to avoid an economic and political catastrophe: a deep recession that will cause greatest hardship among the very groups that have been most aroused by the campaign for Brexit, and thereby magnify the public anger and political chaos already unleashed by the referendum.
To avoid the crisis three conditions will be need to be fulfilled. First and foremost, politicians, media commentators and business leaders will have to stop parroting empty slogans such as “Brexit means Brexit” or “the voice people has spoken” and instead begin a serious debate about the appropriate balance between direct and representative democracy in Britain’s constitution. Second, the new government will have to devise a detailed programme on how to preserve the most important benefits of EU membership, while keeping faith with democracy, and then present this to the voters. Third, political leaders from the rest of Europe will have to show greater flexibility and a stronger instinct for the EU’s self-preservation than they have so far.
The first condition to save Britain from self-inflicted disaster will be the creation of a political movement to challenge the assumption that democracy requires unquestioning obedience to a referendum result. The point is not to try to delegitimise the vote, but to refute a dangerous dogma: that once “the people have spoken,” anyone who questions “the people’s will” is guilty of treason.
The essence of democracy is the right to challenge and reverse majority votes. It is exactly what happens after every election. The defeated party picks itself up off the floor and becomes the official opposition. The opposition party’s mission is, by definition, to contest the “will of the people” and to change the minds of voters before the next election. To brand such opposition as illegitimate is to flirt with tyranny, not respect democracy.
Why should this logic not apply to a referendum? A standard answer is that a referendum is a message directly from “the people” and so creates a mandate that is more powerful than an election or parliamentary vote. This is manifestly untrue, both as a matter of legal principle and of practical politics.
Britain, like every other successful democracy in history with the partial exception of Switzerland, is a representative democracy. Parliamentary representatives are entrusted with decision-making, instead of voters, precisely because “the will of the people” is often inconsistent or ill-informed and sometime dangerously repressive.
That is why Margaret Thatcher called referendums “a device for dictators and demagogues.” And why Edmund Burke, the father of modern British democracy, famously told his Bristol constituents in 1774: “It ought to be the happiness and glory of a representative to live in the strictest union, the closest correspondence, and the most unreserved communication with his constituents. Their wishes ought to have great weight with him; their opinion, high respect. But his unbiased opinion, his mature judgment, his enlightened conscience, he ought not to sacrifice to you. Your representative owes you not his industry only, but his judgment. And he betrays, instead of serving you, if he sacrifices it to your opinion.”
As for the “will of the people,” these very words smack of fascism. This is why Germany excluded referendums from its post-war constitution after their abuse in Adolf Hitler’s rise to power. Democracy is not supposed to serve some monolithic abstract entity called the “people.” Democracy represents the diversity of individuals, each with their own fluid opinions and shifting motivations. The purpose of democratic politics is not to enact the mystical “will” of an abstract “people.” It is to create pragmatic coalitions of individual voters who back one programme or group of politicians above another—and then to keep persuading these voters that they should change their minds.
The general principle that referendums have less legitimacy than acts of parliament was specifically recognised in the legal status of last month’s vote, which was merely “consultative,” in contrast to the 2011 referendum on the voting system, which was defined as “post-legislative,” meaning that parliament was committed in advance to putting its decision into effect.
Efforts to keep Britain in the EU after last month’s vote are as democratically legitimate as efforts to stop the Tories being re-elected. To campaign against Brexit in the months ahead will be no more disrespectful of democracy than it was to challenge the Iraq war or university fees or the Poll Tax or a host of other issues that have inspired grassroots political movements.
Accordingly, the first and most important step in the response to June’s referendum should be a campaign to secure a second referendum or general election to judge any new settlement with Europe proposed by the new prime minister.
Once we accept that public opinion is fluid—and ought to be in any democracy—we see another, more pragmatic reason for challenging the outcome of the referendum. A referendum expresses public opinion on a specific question, in specific conditions and at a specific time. If the conditions change or the question turns out to be irrelevant, then public opinion can also be expected to change.
In the case of Brexit, “buyer’s remorse” is already setting in among the voters and will surely intensify as economic and political conditions deteriorate in the next year or two. And we can be sure that options available if Britain decides to go through with Brexit will be very different from the rose-tinted imperial nostalgia offered by the “Leave” campaign.
The voters were asked to choose between facts and fantasies. A slim majority voted for fantasies. But if there are now to be fundamental and irreversible changes in the structure of Britain’s economy, society and political system, voters must make an informed choice on these specific reforms, either through a General Election or a second referendum.
A basic principle of the British Constitution is that parliament cannot bind future parliaments. But if today’s parliament cannot bind the next parliament, why should a referendum in 2016 on a question that will no longer be relevant by 2020, bind all future parliaments and the voters they represent? The contrary claim, that referendums are irreversible and permanently binding, recalls the parody of democracy imposed by juntas and dictators after military coups: “One man, one vote, one time.”
Once politicians and voters accept the principle that it is democratically legitimate to question a referendum, Britain will be in a position to seriously reconsider its relationship with Europe and the outcome may well be a decision to stay in the EU.
Provided the possibility of continuing EU membership, on slightly modified terms, remains open and voters are given the opportunity to compare any new deal on offer with the status quo, they will notice that Brexit involves many costs and almost no benefits. They will realise not only that full separation would be economically very painful, but also that practical implementation of any new arrangement is literally impossible from a legal and administrative standpoint on anything like the timescale promised by the “Leave” campaign. They will discover that many of the “Leave” campaign’s claims on immigration, job creation and spending on public services, were simply propaganda and that substituting British for EU regulations will entangle them in more bureaucracy, not less. As for dealing with the constitutional problems created by the possible secession of Scotland and Northern Ireland or the intermingling of British and European laws, these will require thousands of pages of new legislation and court decisions, completely monopolising parliamentary time and political attention for five or even 10 years. In the meantime, inequality and regional disparities will widen, public services will deteriorate and jobs will disappear.
Trade relations provide the most specific and alarming illustration. The “Leave” campaign’s promise that new trade relations can be established not only with Europe, but also with the US, Japan and other major economies, in time for the end of EU membership in 2019, will turn out to be totally unrealistic. For example, current EU law implies that any new trade agreements with Britain would not even start to be discussed until the withdrawal process is over. The resulting hiatus will mean Britain operating under plain World Trade Organisation rules from 2019 onwards. This would mean an irreversible disaster for service industries locked out of the single market and also for manufacturers such as Nissan, Ford or Toyota, whose car plants in Britain would then face the same tariffs, customs inspections, quotas and additional regulatory burdens in the rest of Europe as cars imported directly from Japan or the US.
“Before plunging Britain into a constitutional and economic crisis, the government will need a new mandate”
With the prospect of all this economic and social disruption coming into focus, investment decisions will be frozen, businesses will stop hiring and property transactions will come to a standstill. As in the period of political and economic confusion that followed the 2008 bank failures, a significant part of Britain’s business activity will hit a brick wall. And with interest rates already near zero, there will be no scope for reviving the economy with monetary stimulus, as in 2009.
This economic shock, along with the associated deterioration in government finances, is bound to transform the politics of Brexit. As a result, two additional conditions will fall into place for a serious reconsideration of the referendum result.
The new leadership chosen by the Tories in September will have no electoral mandate and only a small majority in parliament. Before plunging Britain into a constitutional and economic crisis it will need a new mandate. But to have a good chance of winning re-election, the government will need to pull the economy out of recession. That, in turn, will require a lifting of the uncertainty about the future of finance and trade.
Since new trading relationships will be impossible to finalise until the next decade, the only way to provide the necessary clarity for businesses, investors and consumers to resume spending, will be to commit to a future relationship with Europe that maintains the key economic features of the status quo. In other words, to win an electoral mandate and pull the economy out of recession, the new government will have to commit to full membership of the single market as the overriding priority in re-negotiating the EU relationship. But if single market membership becomes unequivocally the top priority, by far the least costly way to achieve this will not be to seek some variant of Norwegian or Swiss arrangements. It will be to remain an EU member, subject only to some small but symbolically important reforms.
Which leads to the next essential condition for averting Brexit: European leaders will have to offer some modest additional concessions, so that the new British government can ask voters to reconsider their decision. A few modest changes, all of which would help other European governments facing populist protests, would probably be sufficient to keep Britain inside the EU.
First, would be to allow national governments greater freedom to withhold some welfare payments from immigrants, as suggested by Denmark five years ago. A form of this concession was offered to David Cameron but immediately withdrawn after the Brexit vote. If instead this concession were extended and offered to all EU governments, it could mark the start of an EU reform process popular in Germany, Holland and Scandinavian countries, not just the UK. A second concession might be the “emergency-brake” system, now also demanded by Switzerland, that would permit national governments to impose temporary limits on sudden surges in immigration. A third essential reform would be explicit recognition that the EU will always have two distinct types of membership: the eurozone, which must move towards closer integration, and the non-euro countries, which will never join the euro, will never be included in the euro’s fiscal framework and must stop being described as “pre-ins.”
If these EU reforms could be secured, a new British prime minister could justifiably claim to have regained some control over immigration and reversed the long march towards a United States of Europe. Such reforms would serve the interests not only of Britain, but of other national governments and of the EU as a whole—and they could easily win the endorsement of British voters in a general election or second referendum.
In sum, some modest EU reforms could still keep Britain in Europe—and keeping Britain in Europe could save the EU from disintegration. All it requires for this mutually beneficial outcome is a proper understanding of democracy and some flexibility on both sides: it’s not over until it’s over.