Brexit was right

It's not the economy, stupid

Remain or Leave? It’s not the economy, stupid

I voted to remain in the European Union. A member of the famous 48 percent. Yet I did so for utilitarian reasons: Britain would likely take a hit to GDP and the options for alternative trading partners were spartan. Immigration from Eastern Europe was uncontrolled, but (in my view) unproblematic, with the newcomers settling down well in their new society. I was also concerned about the effect on European nationalist societies. Although Britain’s democracy would surely remain robust, I judged, as more concerning, the prospects for those on the continent . Anti-immigration feeling could run rampant in countries where the vote was more of a novelty; the peace of a fragile continent being frayed, with the British unwittingly giving permission for darker forces to arise.

Although nothing in this debate is controversy free, I have likely been proved correct in these assessments, particularly in terms of the economy. Accepting that the relative effects of COVID, the Ukraine War and the never ending post-2008 depression are difficult to quantify, it is generally accepted that Brexit has contributed at least in part to our continuing economic malaise. And how could it not? Adding unnecessary bureaucratic barriers was never going to yield extra commercial activity nor increased investment and so it has likely proved.

But the fundamental issue is this: we already knew that; including those who voted for Leave. Research from Matthew Goodwin has shown that even among Brexiteers, there was the pre-vote realisation that our income - both personal and national - would be affected; at least in the short to medium term. In political parlance, that idea was “already baked in”. The Remain campaign’s economic focus was never going to work for the simple reason that Brexit was never about the money.

It was ever thus and in the other direction too. When Macmillan, Wilson and eventually Heath argued for entry half a century ago, they made the economic case, but they did so knowing that the effects, in Professor Bogdanor’s words, would be “marginal at best”. The push to become a member was principally a political decision designed to end Britain’s perceived isolation and to increase our fading clout on the world stage. With the unequal relationship with America seen as the only alternative - and an unappealing one at that - European membership was viewed as the least worst, unavoidable, option. We would get a mild economic fillip, yes, as now we are getting a mild economic downturn, but it would be nothing dramatic either way. Thus then, as now, economics is not the question of the day.

The diary-recorded words of Harold Macmillan relate this theme explicitly. The former Prime Minister, who had endeavoured to secure British entry a decade earlier to a firm Gaullist “non”, commented thus:

“Shall we be caught between a hostile, or at least less and less friendly, America and a boastful powerful empire of Charlemagne, now under French, and later bound to come under German control?”

In December 1959, Foreign Secretary Selwyn Lloyd further emphasised:

“We ceased to be an equal power with the United States and the USSR when we gave up the Indian Empire….. we must prevent the six supplanting us as the principal influence on US policy.”

Power, Sovereignty and Nationhood

Rather than economic, the European question is best understood as one of nationhood and nation control. It is for this reason that I have come to conclude that Brexit was right; albeit not yet taken to its natural conclusion, namely the creation of a Commonwealth Federated Union. I have made the case for a Commonwealth superpower elsewhere, so here I will restrict myself to underscoring why Brexit made sense and why, if the vote were held again, I would change my vote to “Staying Out.”

As already mentioned, the economics pointed mildly to Remain and I personally feel that we were enriched by European immigration. But neither observation diverts us from the more fundamental issue: that Britain is not a European nation. Geographically it clearly is; just as Guyana is South American and Australia is almost Asian. But none of us belong culturally in our divinely assigned neighbourhood. Denying the contours of our identity was harmful both to us and our European neighbours.

In an act of mutual self-harm, we were forcing ourselves into an unhappy marriage. They needed the money and we needed the power. But love was always absent. Sometimes, when two good people are wrongly forced together by arranged union, the only appropriate remedy is divorce. And despite its messiness, Brexit was the separation that both parties so desperately needed.

According to Professor Bogdanor’s data, only a third of Britain’s population see themselves as European, hugely below that of any other member state, and in that fact alone we can see the roots of disunity. Even though I casted a ballot for Remain, I stood among the roughly 15% of my fellow countrymen who did so despite feeling no sense of affection towards the continent. I was voting to stay in a loveless union for money and in that I probably acted foolishly. As Anthony Eden once said in Connecticut, the Americans were wrong to encourage us to join in union with a continent that had such a different political life. Of his rural Warwickshire constituents, he noted that most of their combined foreign postbag was from the Commonwealth - from friends and family in Australia, Canada, South Africa and New Zealand - whereas the continent was a cemetery where their loved ones were buried. He wished the Europeans well, but as allies, not intimate family.

I too wish the European Union well in their quest for ever closer union. The extent to which they wish to join together is a matter for them, but history commands that closeness is preferable to estrangement. European nationalisms - along with petty religious divisions - have provoked ceaseless war and endless boundary changes over the bloody centuries: the European Union is a noble - a relatively successful attempt - to change the inevitability of conflictual fate and I salute them in their endeavors. We wish them God Speed and ever greater success. We wish them a future of blessed peace. We wish them unceasing rest from the sword.

As ever, it was Winston Churchill who expressed this sentiment the best. He foresaw European unity. He preached for its coming. But he made the distinction just made between their necessary togetherness and our necessary independence. In a speech in 1946 at Zurich University he passionately pronounced the following dream of German-French Union:

“We must build a kind of United States of Europe….I am now going to say something that will astonish you. The first step in the re-creation of the European family must be a partnership between France and Germany. There can be no revival of Europe without a spiritually great France and a spiritually great Germany.”

In a separate, earlier, discourse he prophesied the followed majestic vision, which largely - and blessedly - has came to pass:

“The conception of a United States of Europe is right. Every step taken to that end, which appeases the obsolete hatreds and vanished oppressions, which makes easier the traffic and reciprocal services of Europe, which encourages nations to lay aside their precautionary panoply, is good in itself.”

Yet, in tune with the sentiments of his fellow countrymen, he added the necessary “but”:

“But we have our own dream and our task. We are with Europe but not of it. We are linked, but not compromised.”

“With Europe but not of it”: In that phrase we hear the core of matter. We hear the hope for continental peace, the yearning for European oneness and the understanding of our very separate nature. Europe is our neighbour - and we are commanded to “love thy neighbour” - but our neighbour is not our wife. They live in a separate home and that is the source of our future tranquility.

The 1975 Referendum: Arabs, Europeans and Trade Unions on the Ballot

Edward Heath was Britain's most pro-European Prime Minister. Perhaps he was Britain’s only genuinely pro-European Prime Minister. Having attended the hateful Nuremberg rallies; having personally brushed past Hitler and experienced the horrors of war; he saw Europe as the elixir of peace. He yearned for peace. He saw the lion lying down with lamb and sought to join his country as one with that dream of tomorrow. Yet when his government came to power in 1970, support for entry was at roughly 20%. From its high point in the 1960s, popular consent for membership was on the decline. Ultimately Heath was to achieve British membership and in opposition to prevailing Constitutional norms, that decision was retrospectively ratified in 1975 by referendum at the behest of Harold Wilson’s Labour government.

Yet the decision to “stay in” was, in no respects, a reflection of British sentimental feeling towards the Continent. It was neither a determination on sovereignty nor a popular statement on the matter of “ever closer union”. Immigration, the concern of the contemporary hour, was definitively not on the ballot; it was all about rising food prices. The British public, as pragmatic as ever, were concerned less with highfalutin ideas of national self-determination and rather more about literal bread and butter issues. Entry into the Community had coincided with a period of economic turmoil and unstoppable inflation. The question was who was to blame.

The potential culprits were reduced to a shortlist of three: The European Community, the Arab oil producers and the striking Trade Unions. The former was in part responsible; about that there was little doubt. Entry had required Britain to take painful measures in respect of its lost-standing cheap food policy. As a condition for attaining membership, the UK was forced to end Commonwealth preference in favour of Community preference. No longer could foodstuffs be imported at bargain prices from the English-speaking world, above all from New Zealand. The Sterling reserve currency zone would have to end, causing great harm to the New Zealand dairy industry and obliging the British consumer to subsidise the farmers of the continent through increased prices. The economic benefits of entry were rightly being questioned.

But up against Europe, lay two further objects of public anger.

The hostility of the Trade Unions; their refusal to agree to an incomes policy that would control the upward curve of spiralling prices. And the reduced oil production of Arabs states, in response to the 1973 Yom Kippur War. In an act of punishment towards European powers they perceived as having sided with Israel, the OPEC sheikhs took economic reprisals. Oil production was punitively reduced by 5% causing a fourfold increase in the price of petroleum. The war to control inflation was on the rocks and it had been the vengeful Arab States that had decided to administer the fateful, final blow. So who was it that the public blamed the most for their current turmoil? The answer was going to be crucial in determining the result of the Referendum. According to contemporary polling, it was to be the Arabs that reached the top of the blame podium with the EC coming in a creditable third place. Through their devastating attack on the British economy, it was the Yom Kippur War that kept the UK inside the European tent. So depending on your European leanings, you have Anwar Sadat to commend…or to blame.

Besides the “Arab effect” was the nature of the leaders who were making the 1975 case for “remain”. All the major political parties, and almost all of the media outlets of the time, recommended continued membership. Against the “mainstream majority” were arraigned a lineup of politicians seen as extremist in their views; they ranged from the far right (Enoch “rivers of blood” Powell, Ian “the Virgin Mary is the Madonna of the Common Market” Paisley and the National Front) to the far left. In the latter group one could find Michael Foot, the Communist Party and the unpopular Trade Unions. Faced with such a team of authoritarian oddballs, the British public were understandably compelled to follow the elite line. But the point is this: the decision to confirm Community membership was not done out of any euro-enthusiasm nor for reasons of economics: rather more potent were following the mainstream moderates and blaming the Arabs. Even the European idealists, such as they were, were keen to make the negative case: that membership was a necessary riposte to decline and abulwark against future continental conflict. The idea that Britain was coming home to join “the family” was a sentiment singularly absent. It was a harbinger of the tension to come.

Two entirely distinct political histories

Britain undoubtedly shares a degree of cultural commonality with Europe. But politically they are miles apart and it is this fact that can explain the discomfort of the ensuing marriage. The United Kingdom, and prior to the Act of Union, England, had an unbroken political story lasting at minimum to the Glorious Revolution of 1688. Arguably it stretched all the way back to the 12th Century when King Edward I established a Parliament at Westminster. The nation was last successfully invaded in 1066 and the line of Kings can be traced back to the 8th Century. The contrast with the continent, ruled or occupied - either way destroyed - by the Nazi terror, couldn’t have been more stark. At the beginning of the 19th Century, only one of the original 6 members (France) even existed in its current form and even then in vastly different political circumstances.

For the peoples of the continent - destroyed, recovering and having undergone unceasing political upheaval - it was somewhat natural to change their political system once more. To require derogation of sovereignty to a higher power - to the extent of accepting the supremacy of EC Law and its primacy over national legislation - was nothing untoward. Indeed, as a bulwark of democratic respectability against an authoritarian backdrop of recent dictatorship, it was rather a blessing. But for Britain, it was quite another matter. EC membership meant accepting the surrender of long evolved Parliamentary Sovereignty. It meant cutting off its long and bountiful ties to the Commonwealth. And in the immortal words of Labour leader Hugh Gaitskell, it meant the “end of Britain as an independent nation state…the end of a thousand years of history”. It was a legitimate decision for Britain to take, but to continue with Gateskell’s words “it (was) a decision that need(ed) a little care and thought.”

The calculus may have been different if Britain had garnered any influence in the post-war Community. But, treaty after treaty imposed upon Britain against her will would seem to contradict that supposition. That the British were to ask time and time again for opt outs and rebates, in the manner of the continent’s ever irritating naughty schoolboy, suggests a clear divergence of both vision and views. It was ever thus. For despite its large economy, the relationship of Britain to Europe was ceaselessly one of servility.

Pompidou’s Four Questions: The road to servitude

A meeting in May 1971 between PM Edward Heath and French President Georges Pompidou was rather instructive. In return for citizenship, Napoleon demanded of the Jews the correct answer to his “12 questions”. Pompidou contented himself with just four. Had Heath answered even one wrong, the dreaded French veto would again have been imposed. In Pompidou’s telling (paraphrased by Professor Bogdanor), they were:

1. “Do you accept the very basis of the European Community for agriculture, the principle of Community preference whereby we feed ourselves in the first place from within the Community?”

2. “Do you accept the veto, the rule of unanimity?”

3. “Do you accept that Sterling should end its role as a reserve currency and Britain should play her part in the development of monetary union?”

4. “Would Britain become really European…moored to the Continent?”

The final enquiry, for Pompidou and for us, was the most important.

Heath, like a good slave to a nearly equal economic power, answered yes to all four. He had no choice. It was either a British “oui” or a French “non” and the Prime Minister had a clear agenda he was bound to pursue. He may have been sincere in his responses, but even so, he was neither representing public nor political opinion by doing so. With only a fifth of the population seeking to join the European ship, and many of even those doing so for reasons of imagined national benefit, Heath was the proverbial shepherd that had lost his flock. “Would Britain become really European?” I will let the reader decide.

Question 2 was perhaps the easiest to answer. Leave campaigners in the 2016 referendum claimed that the British people had been misled in the plebiscite 4 decades earlier; that they had been unaware of the true nature of the Community; that they had believed themselves to be entering a purely free trade alliance of European nations. That, in my view, is a claim that cannot be sustained. As we shall explore further, there was no doubt - even at this early point - that the EC was a protectionist organisation that sought monetary union and ever closer integration. Additionally, the Heath government could point, quite rightly, to the Anglo-French joint emphasis on the national veto.

The national veto was, at this point, an essential outil in the French national toolkit; an essential method of ensuring that the gains benefiting their peasant farmers were maintained in aspect, unsusceptible to being altered by a majority of hostile member States. Nonetheless, it was the national veto that allowed the British government to say with sincerity that they were not abandoning national sovereignty. Any further changes would have required the consent of every member government. Thus the national future was theoretically in the nation’s hands.

It was questions 1 and 3 that would have made the British fly on the wall wince in exasperation. Let us focus primarily on question 1: “Do you accept the very basis of the European Community for agriculture, the principle of Community preference whereby we feed ourselves in the first place from within the Community?” The question itself shows the nature of the alliance: a space for putting the continent above all else; a club where Commonwealth preference - and free trade beyond - could never be countenanced. The Harold Wilson renegotiation of 1975 did achieve some minor changes to safeguard the New Zealand dairy industry, but ultimately the UK would be required to “moor itself to the continent”.

The idea that the Community should feed itself from the produce of its own farmers sounds like a statement of high principle, but, in reality, it represented a collective endorsement of the French national interest. Hidden between high-minded words of peace and co-operation lied base politics. In order for the French gaullists to remain in power - thereby to “protect” the Republic from the “threat” of socialism - the ruling party needed a solid, conservative based of peasant farmers (a fifth of the economy). Along with the Italians, the French rightists needed a bulwark against the left and Europe would be their tool. The British, where agriculture represented a mere 4% of GDP, would in no way benefit from this Franco-Italian sop to rural demographics, but to join the Community they would have to take it or leave it. The acquis communautaire was presented as (pardon my French) a fait accompli and the existing rules would be impervious to change. Furthermore, the British taxpayer, despite at that time having a significantly lower GDP per capita than their Gallic cousins, would be forced to subsidise their indulgence.

Divergent Interests

It had been hoped by Heath that the EC would introduce a regional policy to “level up” the impoverished regions of Britain and to develop its industry. Under the present arrangement, the British taxpayer was transferring its revenue to uncompetitive continental farmers; yet it received no subsidy for its uncompetitive industry in return. It was quite reasonable to expect a concomitant quid pro quo, but the national veto worked to entrench the benefits of the existing members to the detriment of those seeking entry. Britain’s national interest was thus to be stymied; put from the outset on a much lower footing. In the words of the legendary German Chancellor Bismark, ‘“Europe’ was usually heard from those politicians who demanded from other powers what they in their own name dare not request.” In light of the aforementioned, it would be difficult to disagree with his analysis.

It is said that if Britain had joined the Community from the outset then it would have had greater influence on her embryonic development. Logic suggests that this has some merit, but it would be easy to overstate the case; for the interests of the continental powers were always very different from those of Britain. Agriculture played a far greater role in the economies of each of the founder members and none of them had an alternative area of economic preference to abandon. Even had Britain been there in the room, the majority’s necessities would inevitably have prevailed. It’s a matter of political reality.

The divergence between Britain and Scandinavia on one hand and the founder members on the other can also be noted in the area of fisheries. The UK, along with fellow candidate members Denmark, Ireland and Norway had fish stocks that dwarfed the catch of the continental 6; more than double the catch in fact. The introduction of a Common Fisheries Policy was clearly designed to ensure yet another transfer of revenue from Britain and Scandinavia to the rest; to those countries that were already in receipt of great benefits; and it was this fact that was instrumental in the Norwegian decision not to enter. It is no coincidence, one may think, that the new fisheries policy was adopted on the very day that negotiations opened with Britain about its membership. A case of extremely bad faith that puts to bed any notion that Europe was a matter of pure idealism. It rather demonstrates the necessary servility of the desperate.

Death of a Veto. Birth of a Superstate.

The national veto policy was ultimately to change and - surprisingly - it was Margaret Thatcher that was instrumental in its realisation. To complete the Single Market, which is to say to fully remove the non-tariff barriers to trade, it was necessary to remove the national veto in favour of qualified majority voting. Motivated by the UK government’s desire to supercharge the City of London, through opening up the Franco-German financial markets, the pan-European Single European Act was voted into law in 1986. But while helping to boost economic growth in the domestic trading floors of the Square Mile, it opened an unclosable Pandora’s Box which would seal the European fate of Thatcher’s nation. From this moment forth, important changes in Europe could be brought about by a vote of the majority; the outvoting of UK interests was now as certain as death and taxes.

And so they came: Constitutions and treaties against the British will with our government unable to stem the tide. Opt outs from the Euro were attained here, alterations to the budget were achieved there, but the direction of travel was clear. We were being dragged down an unwanted road.

The European Declaration of Fundamental Rights was introduced stealthily under the Lisbon Treaty; a Constitution, unvoted and undemocratic, ushered in through the back door. Unknown to the British public, it gave UK judges the unprecedented authority to overturn voted legislation, a power far beyond the Declaration of Incompatibility under the domestic Human Rights Act. In so doing, a centuries’ long tradition of Parliamentary Sovereignty was overturned. Meanwhile, European expansion to the East, championed by Britain to dilute the centralising obsession of the original six, backfired spectacularly: now unlimited immigration was possible from impoverished Romania and Bulgaria.

None of these changes were necessarily bad; you may agree with open borders and judicial activism. But they were introduced without any democratic consultation or even the genuine support of the elite. Moreover, by a slice of delicious irony, they were argued for by Whitehall in order to reduce Brussels hegemony and Franco-German centric integration. Each exit entered another trap.

Monetary union was another example of British naivety born of utilitarianism. Far from a 1980’s innovation, it was there from the very beginning. Back in the 1970s, under the so-called “Snake”, the Community’s currencies were meant to be pegged to a fixed exchange rate. The British agreed to this, but ultimately the Heath government had to withdraw due to increasing unemployment and was soon followed out the door by the French. When Pompidou floated the Franc, the first joint economic enterprise had failed, but it was destined to return not so many years later. The British tried to peg their currency under the 1980s ERM experiment, but once more Britain had to withdraw in disgrace, the Pound too weak to bear the strain. But though a political disaster for John Major, it was an economic wonder for the national purse. Now able to float at its natural level, growth, stability and low inflation made a welcome comeback. The lesson was well understood by Gordon Brown who made the greatest economic decision of all time in preventing us from joining the Euro. But, by then, the act of economic carnage, represented by joining a fixed exchange rate, had already claimed two political victims: Major and Thatcher.

Cold Marriages lead to Divorce

It is to be emphasised that European integration is not in itself a negative. Open borders, Community preference, the Common Agricultural Policy, the European Charter of Rights and - possibly - the Euro can all be justified; and perhaps, for the continental countries, were a step in the right direction. Perhaps a European Superstate is the best assurance for continued peace and prosperity on the continent? But let us make no mistake, to join together in such a way is akin to a marriage and in order to agree to such a union, all the parties need to be fully committed. At no point in the process did the British people or their governments feel comfortable with the direction of travel. They acquiesced, not for love but for convenience.

While the Europeans saw the ERM as the precursor to a single currency, the British supporters of entry - Nigel Lawson and Geoffrey Howe among them - most emphatically didn’t. They saw the ERM as a mere economic short-term fix to control inflation. While the Europeans dreamed of ever closer union, the British just sought a bit more influence in the world and a bit more money in the personal purse. It was a recipe for disaster and the result was always going to be divorce.

When an economic power is begging for opt outs, pleading for favours and celebrating exceptions, it is a sure sign that something is going wrong. A top ten economic power should be leading in their region, not playing the role of supplicant. It is time for Britain to strike out its own role. It is time for Britain to return home: to the open seas of the Commonwealth.

When Georges Pompidou asked his 4 questions, he saw the final enquiry as the most important: “Would Britain become really European?” If the answer had been yes, we would have viewed his courting as a loving proposal. But the answer was “no”. Britain was not ready to become “really European” nor would it ever be. By saying “I do”, Heath committed us to a cold marriage without the benefits of a huge Malibu home or a bottomless bank account. We were trapped, begging and pleading; suffering in slavery. Brexit may be leading to economic pain. It inevitably would. And it will continue to do so until we unite as a Commonwealth with our estranged brothers. But marriage is a love story and much beating later, we wanted out.

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