A lull before the storm? - The UK/EU referendum debate

16 October 2013
John Palmer (Former Political Director, European Policy Centre)

"The late Max Kohnstamm, Life President of the EPC and a close collaborator with Jean Monnet in the first decades of European integration, had an amusing story about British attitudes towards European integration. Monnet and Kohnstamm were invited to London in the early 1950s to brief the UK government about the planned European Coal and Steel Community. Unlike Monnet, Max was sceptical about Britain’s readiness to commit itself to Europe.

Monnet was pleased, therefore, when they were given a very warm welcome to London by a diplomat who wished them “every good fortune” in building a more united Europe. But it was Max’s turn to smile when the official turned to Monnet and said: “I have just one question. If we decide to join and change our minds later, how could we get out?”

It is tempting to conclude that the British capacity to be unhappy fully inside the European Union, while also being unhappy completely outside, is unaltered. But this is a simplistic and misleading conclusion. Beneath the surface of British politics, complex and conflicting economic, social and political currents are still competing to shape public attitudes to European Union membership.

For the moment, a relative (but no doubt temporary) quiet has descended over a frenetic domestic political debate about whether – and how – the British government should negotiate far-reaching changes to the terms of UK membership of the EU. But there are also signs of a growing realisation among decision makers and opinion formers of the complexities and perils which must inevitably accompany any attempt to re-engineer Britain’s position in the EU.

The change of tempo coincides with a seemingly abortive attempt by a prominent ‘backbench’ Conservative Member of Parliament to force the government led by David Cameron to bring forward its promised EU referendum from sometime in 2017 to October next year. The argument advanced for challenging the Prime Minister on such a sensitive issue is that there is a lack of public confidence that his 2017 referendum pledge will ever be honoured in practice.

The MP seeking to accelerate the timetable for an “In/Out” referendum, Adam Afriyie, is seen as a potential future challenger to David Cameron’s leadership of the Conservative party. His hostility to the Cameron strategy is widely shared among many – probably a majority – of Euro-sceptic Conservatives. His theme that Cameron’s promises are untrustworthy is also the daily mantra of the hard-line Euro-phobic UK Independence Party, which itself poses a potentially deadly threat to the Conservative Party’s prospects of winning the next general election.

In spite of this, the Afriyie challenge has triggered virtually no support from even the most dedicated of Conservative Euro-sceptics. Indeed they denounced Afriyie for threatening to undermine a planned move by the Conservative Party to get Parliamentary legislation passed next year which would prepare for a 2017 referendum. They fear – in the words of the old adage – “of losing a bird in the hand for the illusion of two birds in the bush.”

Afriyie did, paradoxically, win the backing of a handful of opposition Labour MPs in Parliament to support his attempt to amend the planned legislation for the 2017 referendum – to be decided by Parliament in November – so that it can be held in October 2014. Some Labour MPs relish the prospect of a renewed period of bitter internal strife in the Conservative party which might even lead to David Cameron being replaced as party leader before the next election.

A former Labour Minister for European Affairs, Keith Vaz, even argues that Labour would stand a much better chance of winning a referendum next year than it would in 2017 when Labour, on present trends, may well be in government. They insist that a new Labour government – or a Labour/Liberal Democrat coalition – would not want to negotiate any significant change in Britain’s membership but, consequently, would be vulnerable to a voter backlash and a disastrous “No” victory in any eventual In/Out plebiscite.

Historical precedent for re-negotiation of membership terms is limited but not discouraging. Following the so-called re-negotiation undertaken by the Labour Prime Minister, Harold Wilson, the 1975 EU referendum resulted in a clear “Yes” vote victory against earlier negative opinion poll trends. This was in spite of the fact that little or nothing had really changed from the original terms of membership of the (then) European Economic Communities negotiated by the Conservative government under Edward Heath.

It would be foolish, however, to count on the same naivety among voters in any future referendum. The Conservative Euro-sceptics are far better organised and have greater access to the media to support a campaign to give British voters a chance to pass judgement. Moreover the trend in opinion polls remains bleak for the European cause with a clear majority of the public presently favouring withdrawal.

As the prestigious YouGov opinion polling organisation reported recently “If current public hostility to the EU remains, it might look as if withdrawal is likely. Most of the time, the voters who want to leave the EU comfortably outnumber those who want to stay in. YouGov's latest poll, conducted on April 21-22, puts the margin at 43-35%. This eight point gap is actually lower than normal: in recent years the margin has normally been 15-20 points. And the bad news for those who want the UK to remain in the EU is that the gap currently seems to have been widening again.”

However, Yougov continues: “Imagine the British government under David Cameron renegotiated our relationship with Europe and said that Britain's interests were now protected, and David Cameron recommended that Britain remain a member of the European Union on the new terms.  How would you then vote in a referendum on the issue? Every time we have asked this question we have found that those saying “stay in” clearly outnumber those who say “get out”. Our most recent poll finds a three-to-two majority for remaining in the EU. The big switch occurs among Tory voters. At present they favour withdrawal; but, given a clear lead from the top of their party, most say they would vote to remain in the club.”

The question is, ‘Would this happen in a real referendum.’ Cameron certainly states that he wants to keep the UK in the EU. But if, as seems likely, his ‘renegotiation’ yields little in the form of transferring powers back from Brussels to Westminster, will any claim to have ‘protected Britain’s vital interests’ be sufficient to win a majority for a “Yes”? 

The tactical hesitations and disagreements of the militant Euro-sceptics about a very early referendum also reflect other developments. Important leaders of British business, including prominent figures in the City of London, have, after a long period of self-imposed silence, been expressing serious concern and even outright alarm at the prospect that Britain could drift, almost unthinkingly, right out of the European Union.

More significantly, the giant Japanese Nissan and Hitachi companies, which have invested heavily in UK car manufacturing plants, have warned bluntly that they might consider relocation if the UK was to find itself outside the EU. At the same time, some of the British government’s traditional allies within the EU – notably the Polish government – have also made it clear that, in their view, a referendum leading to withdrawal would further marginalise the UK in international affairs.

Britain’s traditionally closest ally – the United States – has also left no doubt that it is opposed to any risk being taken with Britain’s continued membership of the EU. Similar concerns have also been expressed by a number of the member governments of the British Commonwealth. In part, these concerns are fuelled by a fear that their own influence within the Union might be adversely affected by resentment at Britain’s tactics in threatening an “In/Out” referendum.

The Euro-sceptics have argued that Britain should seek a relationship with the EU based either on Norway’s membership of the European Economic Area or Switzerland’s complex bi-lateral arrangements with the Union. But closer inspection of these agreements and the very limited input of either country in influencing EU decision making seems to have reduced their appeal and led to doubts about such an outcome for the UK.

Two other factors are complicating the calculations of Euro-sceptics about winning an eventual referendum. The first are the growing doubts about whether the Conservative party can expect to win the next general election in 2015 – certainly on their own but also even in a new coalition with the moderately pro-European Liberal Democrats.

Much can change in the next 24 months but a more likely outcome seems to be either a majority Labour government, led by Ed Miliband, or a Labour/Liberal Democrat coalition. In either event, a new vote in Parliament could then reverse any legislation passed in this Parliament to hold an In/Out referendum in 2017.

The second development causing unease for the Euro-sceptics is the diminishing prospect of a major new EU Treaty negotiation in the run up to a 2017 referendum. The government in London calculated that a new EU treaty to bring about significant economic and even political union had been made unavoidable by the Euro area crisis. This would give them a crucial bargaining counter on the lines of, ‘We will not veto your treaty if you give us satisfaction on a sweeping repatriation of powers from the EU to us together with full and unfettered access to the Single Market.’

If, as seems likely, the German government and others opposed to a new treaty over the next few years get their way, that bargaining counter will disappear. Of course London could still demand unilateral exemption from a range of common policies – including social, labour market and justice and home affairs commitments – but what inducement could it offer in return, except to threaten a UK/EU In/Out referendum and self-defeating isolation?

Of course other EU government leaders – notably Chancellor Merkel – have hinted at a willingness to explore what “reforms” in the current balance of decision making competences between the EU and Member States might be introduced. This would also be something which, they calculate, would help to appease populist opponents of Brussels/Strasbourg “interference” in their own countries. It is difficult, however, to imagine such repatriation of powers being on a scale which would remotely satisfy Prime Minister Cameron’s Euro-sceptic critics.

Thus far, Ed Miliband has refused to bow to pressure – from within and out-with the party – to concede a referendum unless or until there is a new EU treatyinvolving a significant further transfer of decision making powers from the national to the EU level. However, as the clock ticks down to the next general election, it may become much more difficult to maintain this position. If he is in office after 2015, there will be enormous pressure to concede a referendum even without a new treaty or without any substantial re-negotiation of the terms of membership.

Whatever the doubts and divisions, the Euro-sceptics retain three further advantages. The first is the chronic weakness and lack of self-confidence in the avowedly pro-European lobbies in the UK. Cowed and demoralised by unremitting domestic political and media hostility in the past decade or more, the pro-Europeans do not seem to know how to change the political climate rather simply trying to react to it.

The second factor favouring the sceptics is the disheartening evidence of growing support for Euro-sceptic populist and far right parties in other countries in the European Union. This is, of course, related to a third factor: the Euro area economic crisis, austerity and mass unemployment.

It is unclear whether the wider European economic environment will improve significantly before voters may be called on to pass judgement in a referendum. The opinion polls predict that the UK Independence Party in the UK and the Front National in France will emerge as the largest parties in elections to the European Parliament next year.

Much may depend on the relative performances of the UK and the euro area in achieving sustained economic recovery. The latest statistics suggest that the UK economy has experienced a modest upturn in output but the jury is out as to whether this will be sustained, not least given the vulnerability of the important City of London banking and financial sector and low levels of investment in industry. Should the Euro area recovery accelerate, on the other hand, the economic issues in the UK referendum debate might blunt the Euro-sceptics’ claim that British prosperity would be better guaranteed outside the EU.

The future of Britain in Europe is not cast in stone. It has yet to be decided. But unless the pro-Europeans discover how to articulate convincing strategies for European recovery and compelling visions of a more democratic and socially responsive European Union, the public will not be engaged in shaping that future. Tomorrow, it is not only in Britain where forces of European disintegration and reaction may gain dangerous traction."

John Palmer was a Founder and Political Director of the European Policy Centre.