First Brexit, then break-up

The possibility of Britain’s exit from the EU raises important questions about our competing national identities – and the answers might even force England finally to come to terms with reality.

Illustration by Nick Hayes
 
For the first time since 1975, when the British people voted by a two-to-one majority to stay in what was then called the European Community (EC), Brexit – British exit from the European Union – is a possibility. The odds are still against it, but the margin between stayers and would-be quitters is narrowing all the time. Part of the responsibility lies with David Cameron. He is the Ethelred the Unready of the 21st century. He has forgotten that paying Danegeld (the protection money that Viking raiders demanded) only encourages the Dane to come back for more. The Europhobes in the Tory party walk ever taller, partly because Cameron has been afraid to cut them down to size and partly because he is petrified by Ukip.
 
But Ed Miliband and Nick Clegg are also to blame. Miliband must know that social democracy in one nation is unfeasible. The voracious, masterless, resurgent capitalism of our time and the gross inequalities and social fragmentation that are its stigmata cannot be held at bay by a single, mediumsized European nation state, however well intentioned its government may be. Outside a European Union moving slowly but surely towards more political and economic integration, a Miliband government would be as tightly constrained by the forces of global capitalism as were the Blair and Brown governments of yesteryear. Yet “one nation” Labour has signally failed to offer a coherent and principled challenge to the Europhobic tide surging through the Conservative Party. As for Clegg and the Liberal Democrats, their contribution to the European debate has been little more than a series of bleats from the sidelines.
 
As a result, the debate over Britain’s relationship with the rest of the EU has been a prolonged exercise in missing the point. Europhobes see Brexit as a Get Out of Jail Free card, liberating our island race from bossy Brussels bureaucrats, but leaving everything else unchanged. They cannot bring themselves to see that the complex, humdrum activities of the Brussels Euro-village have become part of the woof and warp of British politics, British economic life and British jurisprudence; that secession from the EU would have a drastic impact on virtually every aspect of British politics and government.
 
Yet even their opponents rarely ask the crucial questions: how would Britain’s political and moral economies fare after Brexit? What niche would she occupy in the global economy? What would happen to the increasingly fraught relationships between the several nations of the United Kingdom?
 
One or two near-certainties stand out. A post-Brexit Britain would be a cross between a greater Norway and a greater Guernsey. British firms trading with EU countries would still have to abide by EU standards, as Norwegian firms do now, but the British government would have no more influence on them than the Norwegian government has today. Britain would be excluded from the endless round of wheeling and dealing that shapes EU policies on the vast range of topics over which EU institutions (notably including the European Parliament) share power with national governments. Britain could survive outside the EU; she might even prosper. But her prosperity would depend, even more than it does now, on the competitiveness of her financial sector. Frankfurt would strain every nerve to capture business from London; and in a post-Brexit world it would be well placed to do so. Fending off that challenge would inevitably become a top priority for British governments. Rebalancing the economy in favour of manufacturing, an objective shared by all three main political parties, would take second place.
 
The logic of self-exclusion from the EU points, in fact, towards a market society, governed by a market state, presiding over a glorified tax haven and financial services hub. In such a society, inequality would rise yet more. Public trust – above all trust in politicians and political institutions – would decline still further from its already dangerously low level. There would be more poverty and more of the humiliations it brings with it. Collective action to redress the ills associated with poverty would be even less feasible. The already battered public realm of equity, citizenship and service would yield still more ground to the invasive market realm. The welfare state would continue to erode. The hateful language of “shirkers” v “strivers” and “scroungers” v “hard-working families that play by the rules” would sound ever more loudly. Britain would be a harder, more selfish and, above all, nastier society.
 
A second near certainty, however, is that where Europhiles speak to the head, Europhobes speak to the heart. They appeal to a myth of glorious, insular self-sufficiency that swamps memories of the long centuries of British involvement in the cultural, religious, ideological, political and military history of the European mainland. It is an odd myth, to say the least. To read the tabloid press or listen to Europhobic speeches in the House of Commons, you would think that the Dutchman William of Orange had never been king of England; that George I had not been a German princeling; that Waterloo had not been a German victory as well as a British one; that the echt Englishman George Orwell had not fought in the Spanish civil war on the same side as Spanish anarchists and Trotskyites and against Spanish Fascists; and that hundreds of thousands of British men and women had not been killed in world wars triggered by ethnic conflicts in eastern and central Europe.
 
But in the battle between head and heart, facts count for little. The myth of insular selfsufficiency has tough, deep roots, watered by a long line of poets. Shakespeare’s John of Gaunt famously compares the “blessed” realm of England to a “precious stone set in the silver sea”; his Bastard in King John resonantly declares: “Nought shall make us rue,/ If England to itself do rest but true.” In one of the best-known passages of his Areopagitica, John Milton exclaimed that God was revealing himself “as his manner is, first to his Englishmen”. Blake’s “Jerusalem” is another example of the genre. So is Benson’s “Land of Hope and Glory”. Yet another is Rupert Brooke’s celebrated lines, written at the start of the First World War, that if he were to die in battle there would be “some corner of a foreign field/That is for ever England”.
 
There is a paradox in all this which the paladins of Brexit resolutely ignore. The heart to which they speak is English, not British. North of the border and west of Offa’s Dyke, Shakespeare’s John of Gaunt and Philip the Bastard, Milton’s vision of England as a providential nation, Blake’s “Jerusalem”, Benson’s “Land of Hope and Glory” and Brooke’s corner of a foreign field cut little ice. For what it’s worth, polling evidence suggests that a significant majority of Scots are against Brexit, while the Welsh are evenly divided. But polls matter less than the deeper forces of memory and myth – the “mystic chords of memory”, as Abraham Lincoln called them – that shape a nation’s self-understanding and existential choices.
 
In Scotland, these forces increasingly recall the long, proud history of the independent Scottish nation that defeated the English at Bannockburn, nurtured the Declaration of Arbroath which insisted that Scotland’s king could rule only with the consent of the Scottish people, allied itself with France against England, embraced an austere Calvinism closer to Geneva than to Canterbury, and eventually negotiated a voluntary union with England which protected the idiosyncrasies of the Scottish Kirk and legal system. The subsequent Scottish Enlightenment gave birth to the economics of Adam Smith and the philosophy of David Hume, both thinkers of European as well as Scottish significance. Geographically, Scotland is farther away from the European mainland than England (except, of course, in relation to Scandinavia); yet emotionally, intellectually and culturally, she is closer. Already there are signs that, in response to the English myth of insular self-sufficiency, the Scots are crafting a national myth of Scotland as a proud, centuries-old European nation whose contribution to European civilisation has been out of all proportion to her size. The more clamant English Europhobia becomes, the more powerfully such a myth is likely to resonate north of the border.
 
The Welsh story is more complicated. Unlike Scotland, Wales was conquered. The bizarre tradition that makes the heir to the English crown Prince of Wales is a badge of Welsh subjection. (It remains to be seen what will happen if a woman becomes the heir.) Under the Tudors, Welsh by origin, Wales in effect was incorporated into England. For many English commentators in subsequent centuries, the Welsh mountains were England’s Highlands. A notorious Encyclopaedia Britannica entry – “for Wales, see England” – epitomised the patronising indifference with which the English viewed their turbulent western neighbours.
 
Yet, against all the odds, the Welsh language survived and prospered as a vehicle for high culture and not just as a peasant patois. Despite a steady decline in the number of Welsh speakers, it still does. More to the point, the political culture of Wales – a culture that nurtured two of the greatest leaders of the labour movement in 20th-century British history, Aneurin Bevan and Arthur Horner – is radically different from England’s. Even more than Scotland’s, it is saturated with an egalitarian (if sometimes inexplicit) democratic socialism, the legacy of the days when coal was king and when Welsh workers fought for justice and industrial democracy against exceptionally tightfisted mine owners.
 
More important than any of this, the Welsh and Scots are comfortable with multiple identities and multilevel governance in a sense untrue of the English. Whatever the Encyclopaedia Britannica might have said in days gone by, the Welsh have never thought of themselves as English. Still less have the Scots. For both, there is nothing strange or shocking in the notion that you can be both Welsh or Scottish and British. And if you can be Welsh and British you can also be Welsh, British and European. The same applies to governance. The devolution statutes created autonomous centres of power in Edinburgh and Cardiff, reminiscent of Barcelona, the capital of Catalonia, or of Munich, the capital of Bavaria. In Wales and Scotland, public policy has diverged from England’s and increasingly does so. The long-term results are unknowable, but there is not much doubt that there is more divergence to come.
 
The United Kingdom has morphed almost unconsciously into a strange, lop-sided, unacknowledged quasi-federation, in which centrifugal forces outweigh centripetal ones. The centralised British state that joined the European Community in 1973 no longer exists. That will still be true even if a majority opts for the status quo in the 2014 Scottish referendum on independence: the status quo is more like a squashy blob of mud than a rock of existential certainty.
 
There can be no worthwhile debate on Britain’s role in and membership of the EU until these simple truths are acknowledged. But though Scots and Welsh people rejoice in them, English reactions vary from blissful ignorance to petulant irritation. The implications are alarming. Given that England is by far the biggest of the different nations that make up the United Kingdom, a UK-wide, in/out referendum on continued British membership of the EU might well yield a majority for secession even if the Scots and Welsh voted to stay in. Naturally, everything would depend on the political conjuncture at the time. Referendum results usually reflect public attitudes to the government of the day. A referendum called by a popular government would be one thing. A vote called by an unpopular government would be another. Yet such niceties are beside the point. What matters is that the European question, which has loomed so large in British politics for a quarter of a century, is inextricably entangled with Scottish, Welsh, perhaps Northern Irish and even English questions – and all these questions affect each other in complex and confusing ways.
 
The English question is the most intractable. There is more to it than Shakespeare’s John of Gaunt and Milton’s Areopagitica. In England, though not in the other nations of the United Kingdom, the terms “British” and “English” have been almost interchangeable. When Kipling asked “What do they know of England who only England know?” he had Britain in mind. In his magnificent polemic The Lion and the Unicorn, first published in 1941, George Orwell called for a “very English revolution”, but it is clear from the context that by that, he meant “British”. When foreign, imperial and defence policies have been in question, however, terminological roles have been reversed. The empire on which the sun never set was always a British empire; its later incarnation was the British Commonwealth. It was Britannia who ruled the waves and the British Grenadiers whose feats surpassed those of Alexander and Hercules. 
 
Scots contributed mightily to Britain’s imperial expansion. And the Duke of Wellington, arguably the greatest British general of all time, and the conqueror of much of India, was an Irishman, born in Dublin. For the English, however, the British empire was an English empire – just as for Russians the vast, multi-ethnic and multilingual Soviet empire was Russian. The parallel with Russia shouldn’t be pushed too far, but it throws much-needed light on the curious interaction between the European question and the English question. The non-English nations of the United Kingdom have responded to the loss of empire with equanimity. They have sloughed off their imperial skins and rediscovered their much older national ones. And, like other small European nations, they have seen EU membership as an opportunity, not as a threat.
 
The English story could hardly be more different. For England as for Russia, the loss of empire was traumatic; and far from softening the blow, entry into the European Community rubbed it in. The contrast with France and Germany, the two core states of the EC and later the EU, is particularly instructive. For them, European integration spelled hope: escape from the demons of three centuries of blood-soaked rivalry. For England, integration has spelled demoralisation verging on despair – relegation from great-power status, a petty future in place of a great past. Brexit’s champions present it as a return to greatness. In truth, it would confirm pettiness.
 
Yet if Brexit comes about because English votes in favour of leaving overwhelm Welsh and Scottish votes against, the probability is that the United Kingdom would break up. Wales and Scotland would stay in the European Union. England would be on her own. Conceivably, just conceivably, isolation would force her to come to terms with reality. It would be a painful process, but it would be better than endless self-deception. Best of all would be a coherent and passionate socialdemocratic and social-liberal challenge to Europhobia. We haven’t seen one yet, but there is still time. Just. 
 
David Marquand’s most recent book is “The End of the West: the Once and Future Europe” (Princeton University Press, £13.95)

This article first appeared in the 30 September 2013 issue of the New Statesman, The Tory Game of Thrones

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Brexit is an opportunity to rethink our economic model

Our industrial strategy must lift communities out of low-wage stagnation, writes the chair of the Prime Minister's policy board. 

With the long term fallout of the great crash of 2008 becoming clearer the issue of "inclusive growth" has never been more urgent.

Eight years after the Great Crash, it is becoming clear that the long term impacts of the crisis profoundly challenges the model of economy - and politics - we have become used to. Asset inflation and technological revolutions are entrenching untold wealth for a small global elite.

This sits alongside falling relative disposable incomes for the many, and increasing difference in the disposable income of different generations. Meanwhile, a cohort of "just-about-managing" citizens are working harder than ever simply to get by, despite falling rates of savings. All of this – along with a persistent structural deficit in pensions, welfare and health budgets - combines to create an urgent need for new economic thinking about a model of growth and 21st century economic citizenship that works better for all people and places in our country.

The main political parties have set out to tackle these challenges and develop policy programmes for them. Theresa May has set out a bold new Conservative agenda of reforms to help those of our fellow citizens who are working hard but struggling to get by: to build an economy that works for everyone, and for the people and places left behind.

But this challenge is also generational, and will need thinkers from all parties - and none - to talk and think together about fresh approaches. This is why this cross-party initiative on inclusive growth is a welcome contribution to the policy debate.

The Prime Minister leads a government committed not just to deliver Brexit, but also to the fresh thinking and fresh solutions to the scale of the domestic challenges we face, which clearly contributed to the scale of the Leave vote last June. As she has said, it's clear that as well as rejecting the EU, voters were rejecting a model of growth that wasn’t working for them.

The UK’s vote to leave the European Union was one of the most dramatic and significant political events in decades – for this country and potentially for Europe. It changes everything: our economic model, our long term economic prospects, the assumptions and mechanisms through which we run most of our government and the diplomatic and economic status of the UK internationally.

Delivering a successful Brexit – one which strengthens our global security, our united kingdom, our economy and popular trust in parliamentary democracy, and a model of political economy that works to these ends, will dominate this political generation.

This is a challenge. But it is also an unprecedented opportunity to reform our model of political economy to tackle the causes of deepening domestic political disillusionment and put our country on the path to long-term recovery. 

Brexit provides us with a unique chance to address two of the most important public policy challenges facing our country.

First, the need to enable and enhance the conditions for creating and developing greater enterprise and innovation across our economy, in order to increase competitiveness and productivity. Second, the need to tackle the growing alienation of so many people and places from the opportunities of globalisation, which has in turn entrenched attitudes towards welfarism. I believe these two challenges are fundamentally linked. 

Without social mobility, and the removal of the barriers holding back national and regional participation enterprise, we will never be able to tackle the structural challenges of productivity, public service modernisation, competitiveness and innovation. 

It's becoming clearer to more and more people that a 21st century "innovation economy" both requires and drives an "opportunity society". You can't have an enterprising economy with low rates of social mobility. And the entrepreneurial spirit of economic aspiration is the fuel that powers the engine of social mobility.

For too long, we have run an economic model based on generating growing tax revenues from an ever smaller global elite, in order to pay for the welfare costs of a workforce increasingly dependent on handouts.

Whitehall has tended to treat social policy quite separately from economic policy. This siloed thinking – the Treasury and the Department for Business, Energy and Industrial Strategy for "growth" and the Department for Work and Pensions, Department of Health and Department for Education for "public services" - compounds a lack of the kind of integrated policymaking needed to tackle the socio-economic causes of low productivity. The challenges holding back the people and places we need to help do not fall neatly into Whitehall silos. 

Since 1997, successive governments have pursued a model of growth based on a booming service sector, high levels of low-cost migrant labour and housing and asset inflation. At the same time, policymakers tried to put in place framework to support long term industrial renaissance and rebalancing. The EU referendum demonstrated that this model of growth was not working for enough people. 

Our industrial strategy must be as much about lifting communities out of low-skill and low-wage stagnation as it is about driving pockets of new activity. We need Cambridge to continue to grow, but we also need to ensure that communities from Cromer to Carlisle and Caithness, which do not enjoy the benefits of being a global technology cluster, can participate too. That means new measures to spread opportunities more widely. 

The Great Crash and its aftermath - including Brexit - represents a chance for a new generation to think these problems through and tackle them. We all have a part to play. Six years ago, I set up the 2020 Conservatives Group in Parliament, as a forum for a new generation of progressive Conservative MPs, regardless of increasingly old-fashioned labels of "left" or "right", or where they stood on the Europe debate. This is a forum to discuss new ways to tackle the current problems facing our country, beyond the conventional silos of Whitehall. Drawing on previous career experiences outside of Parliament, the group also looks ahead strategically at the potential longer-term social and economic challenges that may confront us in the future.

I believe that technology, and a new zeitgeist for public sector (as well as private sector) enterprise hold the key to resolving the barriers that are currently holding back the development of new opportunities. With new approaches, better infrastructure and skills connecting opportunities with the people and places left behind, better incentives for our great innovators, and new models of mutualised public/private partnerships and ventures, we can build an economy that genuinely works for everyone.

The government has already set about making this happen. Through the industrial strategy, the £23bn package of investment in new infrastructure and innovation announced by the Chancellor, Philip Hammond, we can now be much bolder in developing a 21st century knowledge economy infrastructure that will be the foundation for economic success. 

The success of inclusive growth rests on a number of core foundations - that our economy grows, that social inequality is redressed; that people are given the skills they need to pursue a career in the new economy and that we better spread the opportunities of the global economy hitherto enjoyed by a segment of our workforce to the many. 

This can only be achieved if we recognise the way in which enterprise and opportunity are interdependent. Together, politicians from all parties have a chance to set out a new path for a Global Britain: making our country the world capital of innovation and opportunity. Not trickle-down economics, but "innovation economics" where the private and public sector commit to a programme of supporting each other for mutual benefit.

An economy that works for everyone is an economy in which the country unites around the twin pillars of opportunity and security, which are open to all. A country in which "shared values" are as important as "shareholder value". And in which both are better shared by all. A country once again with that precious alignment of economic and social purpose which is the hallmark of all great civilisations. It's a great prize.

This is an edited version of George Freeman's article for All-Party Parliamentary Group on Inclusive Growth's new "State of the Debate" report, available to download here.The APPG on Inclusive Growth's "State of the Debate" event with the OECD, World Economic Forum, RSA and IPPR is on Tuesday 21st February at 6.30pm at Parliament. See www.inclusivegrowth.co.uk for full details. 

George Freeman is the MP for Mid-Norfolk and the chair of the Prime Minister's Policy Board.