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28 February 2014

It’s no again to all things Euro: the rise of the new Eurosceptics

There are three groups Nigel Farage and Ukip must win over: the settlers, the prospectors and the pioneers. Can he do it?

By Mark Leonard

Nigel Farage by Ralph Steadman

Nigel Farage got into trouble last month for praising Enoch Powell, but his guilty secret is that the model for the insurgency by his UK Independence Party (Ukip) is the old SDP. It is, he tells me, “the most successful party in British political history”. It may have disappeared, but not before it captured all three of the main parties (“We now have three SDPs”).

If his analysis is right, Ukip may not need to win a single seat at the next general election to change the political weather. Many argue that it already has. Farage is setting the pace in a year that began with the end of transitional controls on migration from Romania and Bulgaria, and as the European elections in May threaten to up-end the old British party system. He concedes that he struggled for years to work out how to make Euroscepticism a popular cause before he got hold of immigration as the way to make it connect: “These things did seem to be rather intellectual debates rather than things that were affecting everyday lives.”

Over the past six months, I’ve been talking to some of the most important figures inside the new Eurosceptic movement, trying to understand their arguments, the way they have shifted the debate and where Britain’s unpredictable flirting with exit from the EU might lead. One big point stands out from all the interviews I have conducted. The Eurosceptics are accused of wanting to take the country back to the 1950s, perhaps the 1850s, but the uncomfortable truth is that they have done more to modernise their arguments and broaden their coalition than the pro-Europeans.

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When the euro crisis struck, they seized their chance, rather as the neocons did over Iraq after the 9/11 attacks. Meanwhile, the pro-European coalition has shrunk and failed to reinvent itself for a new world. What is so puzzling to the pro-European elite is that it is their proudest achievements – helping to create the single market, fostering a European trade agenda and championing the enlargement to the east – that are now being used as the most powerful arguments against the EU. But the story is not over: the profound shifts in the global and political environment give pro-Europeans a chance to evolve and strike back if they can articulate a credible reform agenda.


Three tribes

The genius of the new Eurosceptics has been their ability to turn the arguments of pro-Europeans on their head, so that each triumph has become an argument against the EU. Old-fashioned sceptics such as John Redwood and Bill Cash used to accept that the EU was good for the British economy but baulked at the loss of sovereignty. The new Europhobes put things the other way round: in place of old arguments about European superstates destroying British sovereignty, Eurosceptics have a narrative about Britain “tethered to the corpse” of the eurozone (the evocative phrase of the fiercely independent Conservative MP Douglas Carswell). They claim that the single market ties British business in red tape; the customs union holds Britain hostage to the protectionist lobbies of all member states; and the free movement of people unleashed by enlargement is flooding the British labour market with immigrants.

Adam Lury, the thoughtful former adman who once helped New Labour think about communications, says that Europe is one of those issues where public attitudes are motivated as much by identity and values as by the familiar metrics of class or financial interest. Following the work of the American “humanistic” psychologist Abraham Maslow, who wrote about a “hierarchy of needs” in the 1940s and 1950s, sociologists and pollsters usually segment the public into three main tribes.

First are the “settlers”, who make up 30 per cent of the UK’s population, according to the British Values Survey conducted by Cultural Dynamics. They are naturally conservative, focused on safety, security and belonging. Next are the “prospectors”, who want to maximise their wealth and seek opportunities for personal advancement. They make up another 32 per cent of the population. Finally, we have the “pioneers”, who make up the remaining 38 per cent. They have satisfied their material needs and are interested in self-actualisation and concerned about the big picture. Lury points out that the power of the pro-Europeans was that they developed a case for British membership of the EU that appealed to all three groups. For the settlers, it offered peace and stability. For prospectors, the single market promised jobs and prosperity. And for pioneers, it was exotic and exciting.

But today, it is the Eurosceptics that have found arguments against Europe that appeal to all three tribes.


Ukip, the settler’s friend

“If you live in the east of England,” Nigel Farage says, “you will have seen social change in your towns and cities over the course of the last ten years that is absolutely huge. And by and large people are very uncomfortable with it.” That is why Ukip’s mission statement opens not with the European issue but by saying: “As crisis has followed crisis our politicians are seen to be impotent in the face of the dangers rearing up all around us.” It conjures up the spectres of violent crime, job loss, a tide of immigration, falling pensions and fear of old age.

A major study of public opinion by Michael Ashcroft last year confirmed that Europe is a secondary issue, even to potential Ukip supporters (only 7 per cent of the party’s supporters said Europe is the single most important problem for them). In focus groups, they reeled off a litany of complaints, imagined and real, about the cultural and social state of Britain.

For instance: your school is not allowed to hold a Nativity play; you cannot fly the flag of Saint George; you cannot call Christmas “Christmas” any longer; you cannot be promoted in the police force unless you are from a minority group; you cannot wear an England team shirt on the bus; you won’t get social housing unless you’re an immigrant; you can’t even speak up about these things, because you’ll be labelled a racist. “All of these examples,” Ashcroft says, “make the point that the mainstream political parties are so in thrall to the prevailing culture of political correctness that they have ceased to represent the silent majority.”

Ukip claims to talk for the settled majority, but it adopts the rhetoric and tactics of an oppressed minority. Farage claims that his goal is more about changing minds than capturing seats. “To some extent, the success or failure of Ukip is in the hands of the other parties. If, for example, the Labour and Conservative Parties came to those positions then the electoral appeal of Ukip will diminish.”

However, Ukip would have changed the political agenda, as the SDP did before it. As Jon Cruddas, the MP leading Labour’s policy review, says: “You have this shape-shifting political force that can move in and out of some of those visceral identities that are being generated in the context of austerity, massive generational change, crisis of political representation and generally a sense of anomie across the political landscape. And they have the electoral cycle on their side, with the European elections on the same day as the local government elections.”


Fresh Start, the prospectors’ grouping

Andrea Leadsom speaks with the clipped authority of a schoolmistress, bringing granular detail and concrete proposals to a debate that too often has been defined by bluster. As a former banker, she is perfectly cast to appeal to the material urges and pragmatic concerns of Britain’s “prospector” class. Like the most effective Eurosceptics today, she claims to be in favour of reform rather than revolution. One of the leaders of the Fresh Start group of Tory MPs, she explains in a telephone interview with me: “There is a fundamental change that is not widely enough understood – the status quo is no longer an option.”

For Leadsom, the euro crisis has set the members of the eurozone firmly on the path to fiscal union, inevitably changing the nature of Britain’s membership of the EU in the process. Speaking with ever-increasing authority, she argues that British banks are already having to deal with decisions over which they have no control, such as the fate of Cyprus. More importantly, she fears that in the new EU the eurozone will act as a caucus that imposes unpopular decisions on the City of London. She cites the decision to limit bankers’ bonuses as an early instance of the potential dangers.

The organisational and intellectual driving force behind Fresh Start’s agenda is Open Europe, the think tank that used to be the No campaign on the single currency. Its director is a tall and brainy Swede, Mats Persson. He explains the core of the Eurosceptic case thus: “There is a feeling that the British voted to join a common market and got something different. This relates to trust in politics.”

With its highly political campaigns over the cost of EU regulation and against EU powers on crime and policing, Open Europe has systematically undermined many of the conventional arguments in favour of the Union. In fact, the campaign has worked so well that Open Europe itself is on the verge of an identity crisis, because it is discovering – like David Cameron – that the debate has moved in such a sceptical direction that it may end up in the Yes camp in a referendum campaign.


Techno utopians

Douglas Carswell looks more like a cartoon villain than a romantic idealist, yet he is behind the most dramatic shift in Euroscepticism: its appeal to Britain’s younger pioneers. A libertarian, self-styled radical and advocate of localism, he first came to prominence when he pleaded with Westminster to clean up following the expenses scandal. Since then, however, he has brought a technological utopian bent to Europhobia, making it seem more modern in the process, and so potentially appealing to younger people who are not natural Tories.

Carswell, who is the serving MP for Clacton, sees the crisis in the eurozone as a by-product of the modern, networked society. “The collapse in trust in hierarchy is a good thing,” he said at an event at the European Council on Foreign Relations in April. “The internet is riding to the rescue. It dooms gigantism.” He claims that elites are bad at public administration and are unaccountable. In the past, countries needed political parties to aggregate opinions, but new movements such as Italy’s Five-Star, led by Beppe Grillo, show how people can use the internet to develop a common platform. “New parties can spring up out of nowhere,” Carswell says.

He talks in grandiose terms about how the web will bring forth a world of networks, one where the natural liberalism of the individual will prevail. “At university, I used to study the conflicts between liberty and democracy. But one of the advantages of the internet is that the crowd is no longer a mob.” Carswell is more specific about his endgame than some of the Fresh Starters. “Instead of thinking about how to reform the EU, we should be thinking about a post-EU Europe.”

For Carswell, the EU is provincial and old-fashioned rather than modern and exotic. He sees it as a fossilised relic of the 20th century in a digital world. What matters to his brand of sceptics, as the conservative columnist Matthew d’Ancona argued in GQ magazine, is “not post-colonial reach or the ability to fight alongside America in military interventions, but the real freedom to trade globally”. He concluded: “What’s so bad about being a new Singapore off the shore of Europe?”

The Carswell sceptics think that the modern era transcends geography, uniting the world economically and politically in the cloud. The countries they admire the most – Australia, Dubai, Singapore – have successfully managed to carve out a global role without being hung up on trying to shape the world. The intellectual rationale for this move is that, even though Britain may enter a “new Elizabethan age”, in which it retains a global outlook, it should refuse to be drawn into disputes about the shape of the European continent.

Behind the Ukip case, the fresh start and the technological dream is a modern-sounding argument that has a different tone from the blimpish isolationism of Euroscepticism past. Settlers are being targeted with the fear that their neighbourhoods are being transformed by a wave of migration from new member states. Prospectors are told of the economic threat of the euro crisis and the burdens of regulation. But it is the Europhobic pioneers who have potentially the most disruptive arguments. By claiming that Europe is a bureaucratic monolith in an age of global networks, they have the greatest ability to transcend the older, more conservative ghetto of traditional Euroscepticism and create a wider coalition.


A fragile, Europhobic coalition

Ed Miliband accused the Prime Minister of “sleepwalking” towards the EU exit, evoking the march of folly that led Britain into the First World War. Yet the more appropriate martial analogy is between those who are conspiring to push Britain out of the EU and the neocons who pushed for the US invasion of Iraq in 2003. Like the neocons, what Britain’s Europhobes lack in numbers, they make up for in passion. They have a powerful intellectual framework, wealthy backers, and advocates in the press, the Commons and the cabinet. However, although the Europhobes have momentum, their coalition is vulnerable.

In this phoney war, the European question is framed as a subsection of the migration debate. But the subliminal question in an actual referendum, as Peter Kellner of YouGov argues, will be not whether people like the EU, but whether Britain should take the risk of going solo. And public opinion on the European issue is softer and more volatile than it is on the question of migration.

A Liberal Democrat close to Nick Clegg tells me: “The debate will shift very quickly if people think that a Brexit is really on the cards. There are a lot of businesses that will be very worried about being stuck outside the EU.”

He points out how the Japanese government has already warned that many British people who work for Japanese companies would lose their jobs and argues that companies such as Nissan and Ford have to speak publicly about the matter as well as make these points to their staff.

The problem for the Eurosceptics is that few of their arguments will withstand the scrutiny of a campaign. Once the referendum is called, they will not be allowed just to argue against Europe: they will also have to say what they are for. Last summer, the Confederation of British Industry published a study of alternatives to EU membership. The main candidates are the models of Norway and Switzerland, countries bound by all EU laws but which have no right to make them. The Turkish model gives access to a customs union but not the greater benefits of the single market. Or there is a simple free-trade agreement, which would allow neither access to the market nor the influence of EU membership.

The CBI does not find any of the options very appealing. Rather than seeing a world of benign networks where everyone lives happily together in the cloud, it recognises that we have entered a cut-throat era of economic competition when size and power matter – and when new players such as China will seek to use their vast markets to create an unlevel playing field. A British government that stood outside the EU would struggle to have its voice heard.

Most economists reckon that Britain benefits from being in the single market, which is still the destination for most of Britain’s exports and the lure for most of its overseas investors. They also argue that it is Europe that enables the UK to prise open new export markets from Beijing to Bangalore, by giving it the clout of being in a single market with 500 million consumers. In this way, the EU affords Britain a platform not only to shape its own future but to take part in writing the rules for global governance on everything from the regulation of banks to nuclear proliferation and human rights.

As the euro crisis subsides and the economic costs of Brexit become more pronounced, the Eurosceptic coalition is starting to fragment. There are already many Conservatives who worry about setting their party against the interests of the nation’s biggest companies. It seems likely that a referendum campaign could drive many prospectors back into the pro-European camp, while a more optimistic case for a European future might reignite the support of pioneers. If this happens, the anti-Europe coalition will once again become so dominated by the traditionalist, anti-immigration argument that it will lose its breadth. For all these reasons, there is still a chance that the pro-Europeans can evolve and strike back. But who can lead the charge? And will it pay off electorally?


Cameron as leader of the pro-Europeans?

Nick Clegg is the only British party leader with a strong belief in the European project. His principled stance on Europe did him no harm in the leadership debates during the 2010 election and he seems determined to put the case against Brexit in the Lib Dems’ Euro election campaign. However, his rational deliberation is no match for the monomaniacal passion of the Eurosceptic Tory MPs in the coalition. And with so little public support, Clegg is not able to shift the dynamics of the national debate.

That is not true of David Cameron. A YouGov poll in November showed that, in a referendum on EU membership, 37 per cent would vote for Britain to stay in, while 42 per cent would support the country leaving. However, in the event that Cameron renegotiated British membership and recommended a Yes vote, 52 per cent would vote to stay and 28 per cent would vote to leave. These sorts of polls have helped to cement a consensus that Cameron is best placed to win British citizens around to support membership of the EU. Yet he faces a dangerous trilemma: how to mobilise British voters, his European partners and his own party behind a common policy programme. The evidence suggests that he could bring any two of these groups with him, but not all three.

British public opinion looks fairly malleable. European leaders such as Angela Merkel are sympathetic to the need to keep Britain in, though none is keen to open up a major negotiation of the EU treaties. The trickiest challenge for Cameron is with his own party. One player at the heart of the government’s European policy put it well: “Is there a realistic reform agenda that could persuade British people to stay in? I think the answer is yes. Is there a reform agenda that could satisfy Conservative MPs? Unfortunately, I don’t think there is.”

This points to the core of Cameron’s difficulty: until the 2015 election he can pretend to be the leader of both the “better off in” and the “better off out” factions. After the election, he will have to choose.


What should Labour do?

Ed Miliband is the one party leader who has the ability to reframe the European debate, reconciling the demands of European partners, the British public and his own party. But he is also the leader who has most studiously avoided getting involved in the European debate.

So far Labour has had a largely tactical discussion about whether to match Cameron’s referendum pledge and how to deal with the migration challenge, but in 2014 this discussion will take on strategic significance. Jon Cruddas says that debate about Europe is essential, because “it would allow us to think about how to confront Ukip in terms of party organisation, our approach to issues of voice and referendums and our reform agenda for Europe”.

Unlike Clegg, who is associated with the old pro-European agenda, and Cameron, who is a prisoner of his party’s obsessive Europhobes, Miliband has an opportunity to create a new European coalition.

The Labour election victories in 1945, 1964 and 1997 were secured not only by contesting the national story, but by showing how Britain would respond to a changed international landscape. Miliband has yet to develop a Labour narrative that can dislodge Cameron’s talk of a “global race” or Ukip’s story of Little England. This is his chance. Rather than defending the Europe of the status quo, he has an opportunity to offer a fresh reform agenda for Europe – a new approach to migration; a post-crisis economic growth and social policy; and an agenda of self-government in Europe.

The starting point is a defensive appeal to the settlers. Miliband must do much more to bring home the threats to jobs and prosperity from the uncertainty of Cameron’s approach and the risk of a Brexit. Labour can also build on its current agenda on migration – including the idea of boosting the living wage and addressing pressures that new migrants place on public services directly – by suggesting that the EU budget could be used to help lessen the impact on services from intra-EU migration.

To appeal to prospectors, Labour must set out an account of Europe as a multiplier of growth in a multipolar world, rather than a conveyer belt for austerity. It can describe how the EU can underpin a strategy for reindustrialisation by extending the single market to the services, digital and energy sectors, as well reforming the EU budget to make investments in research and development, infrastructure and energy. In order to get access to global markets, it should pioneer a new generation of trade agreements with countries such as the United States and Japan to drive up standards in the global economy and attempt to level the playing field with China.

To reach the pioneers, Labour must reclaim the mantle of self-government. There is a chance to reframe the debate so it is not just a question about a single, one-off vote about being in the EU, but rather about the ability of governments to be sovereign over their own affairs. In this regard, it is worth talking again about the example of Norway, whose own parliament labelled its non-membership of the EU as “a democratic disaster”. Because Norway cannot afford economically to be excluded from Europe’s single market, it is bound to pay into the EU budget and to adopt nearly all EU laws, yet it has no role in making them.

But before he can do any of this, Miliband will need to resolve the referendum problem. He has been right to resist calls for an immediate referendum and to criticise Cameron’s strategy of renegotiation followed by a vote in 2017. However, very few people – even in the shadow cabinet – believe that Miliband will be able to stick to his present policy through the rigours of a European election, let alone a general election campaign.

Labour should commit to holding an in/out referendum at such a time as there is a new treaty that transfers sovereignty from the UK to the EU. By doing this, Labour would put itself on the side of public opinion and be in a strong position to go after the Conservatives mercilessly for putting party before country and for being rendered frozen and incapable by their divisions.

And yet, looming over Miliband is the shadow of Farage, who threatens to beat Labour into second place in the European elections in May. With his paeans to traditional values, Farage seems to be mourning a lost world; nonetheless, he realises that he is the biggest beneficiary of its passing. “There was a degree of deference towards our leaders,” he tells me. “That deference has died. Because of that, people are now open to different ideas and are open to vote in ways they would never have imagined.”

It is this anti-elitist sentiment that Ed Miliband must try to embody, but the way to do it must be to stick clearly to Labour values, rather than opportunistically joining a Eurosceptic arms race. As Douglas Alexander says: “Our challenge is not to deny Ukip’s challenge or merely insult them. The solution is not to be a better Ukip, but to be a better Labour Party.”

Given that the contest for the European Parliament will take place only a year before the general election, the stakes are high. If Miliband finds his voice on Europe, he will look more like a prime minister-in-waiting and have a stronger platform from which to fight the 2015 election. If, however, he flunks the challenge, the chances are that a low-turnout European election could lead to the smiling Farage doing what even the SDP never managed to achieve: emerging as the poll-winner in a nationwide election.

Mark Leonard is the director of the European Council on Foreign Relations . He writes here in a personal capacity.

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