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23 October 2014

Leader: Britain’s dismal drift towards Brexit

The possibility of withdrawal is not one that should be regarded with equanimity. Outside the EU, the world’s single largest market, the UK would suffer high economic loss and would be cut adrift.

By New Statesman

Three years ago this month, David Cameron walked through the division lobby in opposition to a referendum on European Union membership. “This is not the time to argue about walking away,” he said. “Not just for their sakes but for ours. Legislating now for a referendum, including on whether Britain should leave the EU, could cause great uncertainty and could actually damage our prospects of growth.”

These arguments are no less compelling today than they were then but the Prime Minister is moving Britain ever closer towards the EU’s exit door. Last year, when he promised to hold a referendum on whether or not Britain should stay in the EU by the end of 2017 – at the behest of the UK Independence Party and his recalcitrant backbenchers – he signalled that his preference was for Britain to remain a member by renegotiating its relationship with the bloc. Yet so extravagant have his demands become that he is almost guaranteeing failure.

Having initially focused on achievable reforms such as an exemption from the doctrine of “ever closer union” and stricter restrictions on welfare benefits for EU migrants to Britain, Mr Cameron is now aggressively challenging the fundamental principle of the free movement of people. The Ukip insurgency has persuaded him to harden his stance on EU immigration. Options floated by the Tories and their media supporters in recent days include the introduction of an “emergency brake” allowing temporary controls on EU migrants, a cap on National Insurance numbers for them and the adoption of a points-based entry system.

Any unilateral action along these lines would be undesirable. Britain, in common with other countries, has been enriched economically, culturally and socially by immigration. The unilateral rejection of free movement by the UK would encourage similar reprisals against the 1.8 million British citizens living abroad in the EU. Such a retreat into protectionism and nativism would be an act of collective self-harm.

However, for Mr Cameron, the problem is less the desirability of reform than its feasibility. There is no appetite among the EU’s other 27 member states to repudiate the principle of open borders and the Conservatives are not well placed to nourish one. By spreading myths about the largely non-existent problem of “benefit tourism” and speaking, as did Philip Hammond, a foreign secretary who has little experience of foreign affairs, of “lighting a fire” under the EU, they have earned the enmity of would-be allies.

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It is for this reason that some senior Tories, including Mr Hammond, Boris Johnson and Michael Gove, already talk openly of the prospect of withdrawal. If the Conservatives remain the largest party after next May’s general election and a referendum is held (the Liberal Democrats privately suggest that they would be prepared to support one in return for concessions on constitutional reform), Mr Cameron will likely either be forced to campaign for an “out” vote or will struggle to make a convincing case for remaining in.

The possibility of British withdrawal is not one that should be regarded with equanimity. Outside of the EU, the world’s single largest market, the UK would suffer an economic loss as high as 10 per cent of GDP and would be cut adrift. The country would be regarded as increasingly irrelevant by the United States and other major powers. And leaving would diminish the EU’s collective capacity to act against cross-border
threats that confront the world: terrorism, climate change, a revanchist Russia. Should a majority in Scotland vote to remain in the EU while the rest of the UK opts to secede, another referendum on independence would be the consequence, with the probable end of the British state.

Support for continued membership should not be equated with support for the status quo in Brussels. The EU has been and remains too opaque in its decision-making, too wasteful in its spending and too remote from its citizens. Its embrace of extreme austerity has led to stagnation, mass unemployment and misery in many poorer member states.

These are reasons not to retreat but to lead. Forecast to become Europe’s largest economy by 2030 and its most populous country by 2043, the UK has the capacity to shape and reform the EU for the better. Would that Mr Cameron were more capable and more willing.