This 24 page report can be downloaded from the internet in pdf. The headline arguments are written in bold. I will respond to each one of these points in the order of the summary provided by the pamphlet.
- The question of sovereignty lies at the heart of the UK’s upcoming EU referendum. This is indeed the case. The UK tradition, going back centuries, is that the electorate can elect the legislators, and send them packing in the subsequent elections if they so desire. This is not possible in the EU, which has been the source of a growing volume of legislation since the UK joined in 1973. The British electorate is powerless to effect what is called “l’acquis communautaire”, a concept referring to the sum of legal rights and obligations which bind the member states. The acquis is vast and expanding. It is calculated as being over 170,000 pages long, of which 100,000 have been produced since the turn of the millennium.
- Successive British governments have chosen to pool aspects of the country’s sovereign power in the EU in order to achieve national objectives. This is also true, but requires some provisos. Prime Minister Macmillan referred to the concept of “pooling” in 1961, but in the 1972 Accession Act, the government of Prime Minister Heath went much further, subscribing in Section 2.1. to a supranational view of the EU, a position that neither France nor Germany hold forty three years on. This makes a supranational EU the UK’s official position. The supranational view goes far beyond “pooling”: it recognises the supremacy of EU law over UK law. And since that body of law keeps growing, the area of UK discretion keeps shrinking.
The “single market” has been partially created, but only in manufacturing goods. France thus has a free trade in farm products, and Germany in manufactures—thereby meeting their basic specialisations. There is no single market in financial services, where the UK’s strengths lie. Both Berlin and Paris have made quite clear that they defend their own financial institutions and ownership structures resolutely. This may change with the capital markets regime under construction, a consideration which definitely plays in favour of some London based financial institutions backing Remain. But far from all of them.
It is premature to say the least that Iran’s nuclear programme is constrained, and the main negotiations with Iran have been conducted by the five permanent members of the UN Security Council, plus Germany, Iran’s prime supplier of manufactured equipment. The EU has been present in the shape of Lady Ashton, but it would be stretching credulity to consider that her say was decisive. What amettered was the US; joint diplomacy by Paris, London and Berlin may have some influence in the world, but it is far from clear that this fits into the idea of “pooling”. It fits better into the idea of cooperation.
The UK helped design an ambitious EU climate change strategy. But it is fair to say that the major member states of the EU have extremely diverse energy policies, and their commitment to climate change agendas competes with other priorities, such as keeping business turning. The 2008 UK Climate Change Act has definitely driven up energy costs, thereby endangering the existence of the steel and automobile industries.
- Apart from EU immigration, the British government still determines the vast majority of policy . The report stresses that the UK controls more than 98 per cent of its public expenditure, and has free hands over a large swathe of policy areas. This is true to the extent that EU regulations, directives, ECJ judgements, tariffs, and UK contributions do not shape the budget structure of the 98%. The UK’s net contribution to the EU in 2015 was £8.5 billion, just under 1.2% of total government spend for the year. Ian Begg, in the EU Budget and UK Contribution, http://ner.sagepub.com/content/236/1/39.full.pdf, points out that Remain and Leave camps throw figures around, and concludes that its net contribution is comparable to that of other member states of similar prosperity.
It is only partly true that the UK does not determine immigration policy. Niblett clearly exaggerates the lack of government control over immigration.
Since the enlargements of the EU eastwards in 2004 and 2007, the Labour governments of the time made a play of opening the UK labour market wide to eastern European workers, compared to the more cautious policies of Germany and France. In the downturn since 2010, the Cameron government promised to reduce net immigration considerably, but ran into two problems: the one is the acquis that member states cannot infringe the free movement of people principle within the EU; the second is that mass unemployment in southern Europe generated by German and Dutch austerity policies in the context of the Euro, have prompted a flood of immigration also to the UK from southern Europe. Prime Minister Cameron has been able to boast that the UK from 2010 to 2015 produced more jobs than the whole of the EU combined. UK flexible labour markets, contrasting to rigid continental labour markets, have acted as a magnet for EU job seekers.
Since 1998, 80% of immigration to the UK came from outside the EU. As a result of open door immigration policies by successive Labour governments between 1997 and 2010, the foreign born population in the UK had increased dramatically from 4.6 million to 7.5 million. The reasons for this include: the pull factor on immigrants, especially from the subcontinent of a generous welfare system, and easy access to it for over 50 different types of benefit; the Labour party’s reported intent to make the UK over as a multicultural country; international treaty commitments to allow in relatives; and party political battling, especially on the left, to recruit new voters wherever they come from. The result is that by the time of the 2016 referendum, immigration is far and away No 1 public concern, according to pollsters.
By focusing on immigration, UKIP has illustrated that the UK is not in charge of its borders. This is definitely the case as far as EU immigration is concerned. Nigel Farage suggests introduction of an Australian points system, whereby the UK authorities could select what skills are needed in the workplace, regardless of country or region of origin.
- The British economy has prospered in the EU. The UK boasts higher economic growth and lower unemployment than most major developed economies. It attracts the most foreign direct investment in the EU, and is ranked among the most open places to do business in the developed world. British economic weaknesses, such as low growth in productivity, are self-inflicted.
All of these points are uncontroversial. It is worth pointing out, however, how different the UK’s situation is in 2016 to what it was in 1973. Global markets were much more closed at the time. The EEC held a strong attraction to those who wanted to expose the UK’s cartelized and nationalized industries to more competition. President Pompidou of France was worried about Chancellor Brandt’s détente policy, a concern shared in Washington, and London. To reassure, his EEC partners, Brandt signed up at the Paris summit of October 1972 to the supranational vision of a completely integrated Europe by 1980. Hardly was the ink dried on the Paris agreement than the project fell apart. The lesson France took from this failure, and the collapse of the Heath administration, was that France could not rely on the UK, but would have to forge a functioning relationship with Germany. The Franco-German tandem came to be associated with all subsequent efforts to move the European project forward. It shattered in May 2010.
The Niblett paper holds an implicit counter factual question of whether growth would have been higher or lower since 1973, had the UK been out of the EU. It remains implicit because unanswerable, and unanswerable, because the whole of the UK’s history since 1973 would have to be rewritten in fiction-not a promising base on which to build an argument one way or the other. Definitely, being in helped to attract Japanese investment into the ailing UK car industry in the first decade and more of EU membership. It is also incontrovertible that companies from non EU countries often invest in the UK as the best platform from which to export into the rest of the EU market. Niblett rightly points out that the UK government has been very successful in making the UK an excellent place to do business, and cites in evidence the UK’s position in the World Bank’s Ease of Doing Business index. The UK lies no 6 out of a total of 189 territories in the index.
It is also worth underlining that the Thatcher government championed the “single market” programme. It is often said in hindsight that Thatcher did so on the basis of her understanding of the national interest. But it is also possible to argue that she simply implemented the 1972 official Whitehall position of the EU as a supranational entity. The major policy reforms in the UK had been implemented before the launch of “1992”, as it was called at the time, so that unlike in France, -where the single market programme appeared as an EU initiative-re-regulation and a more competitive market economy were introduced in the UK as domestic initiatives. This internally generated history of reform left a lesson that the UK was capable of reforming on its own. And it was only when France, with Jacques Delors heading the European Commission, pushed for monetary union in 1988 that she came out against the 1972 policy in her famous “Bruges” speech. The speech was the British equivalent of de Gaulle’s view of a Europe of states, and only “anti-European” to those who equated Europe with the idea of “ever closer union”.
Furthermore, France and Italy linked single market legislation, to legislation for liberalization of capital movements, which in turn was linked to monetary union. Bernard Connolly, the former head of the Commission’s own financial services directorate, wrote in his book on the move to monetary union, The Rotten Heart of Europe, that the move to a fixed exchange rate regime in what has become Euroland meant that the dynamic shakeout of industries across Europe resulting from market opening was stalled. The disaster of the Eurozone, which Connally predicted, as one of the most knowledgeable insiders in the Commission, stands as testimony to how pertinent his analysis remains.
The only reference in this report to this crucial history of the Euro’s foundation is to the UK exemption from the Euro, won by Prime Minister Major at the time of the signing of the Maastricht Treaty. The report also does not highlight the evident contradiction, pointed out by those who championed UK membership in the Euro at the time, that the UK could not be, in Major’s phrase, “at the heart of Europe”, and out of the Euro.
Clearly, though, the author considers that, unlike in 1992, the UK can have the best of both worlds, being in the EU, but out of the Euro-and out of Schengen. One of the main arguments for Leave is that this half-way house position is no longer tenable: Euroland has to go all the way to supranational governance structures, and Leavers say now is the time to get out so that the UK can preserve its constitutional democracy. The fact is that the 1972 Whitehall official position has not been challenged by any government, whatever individual politicians say; the official position , it is worth repeating, is for a supranational Europe.
The author is being less than frank in arguing that the UK can stay in a half way house. Because he knows the subject well, one must conclude that he wishes for the UK to stay in the EU so that the option to join the Euro later remains on the table. Further to this below.
- However, a successful economy and free-movement rules have led to high levels of immigration from the EU. The author states that this has overall positive for the UK economy. The remarks above here are worth repeating: the voters see immigration as a whole, and not just from Europe. They have never bought into the proposition that the UK is a province of a supranational entity. This does not seem to worry Niblett. Where he admits that there is some ground for the public concern is that immigration has exacerbated pre-existing pressures on public services, and may have restricted wage growth in some sectors. In so presenting his argument, he pinpoints not the lack of government control over who comes in and out, but the failings of public policy on health, education, or labour markets.His position is that the British state, not the EU, is at fault. That is also the position of Remainers.
- Is it time, therefore, to return economic and political sovereign power entirely to Westminster? he asks, and the reply is that the risks of doing so are extensive. First, others would write EU rules, the UK would not, and the direction of foreign investment would be altered. There is some evidence for this, but it goes back to the 1960s, when de Gaulle managed to create a conservative coalition, isolating the French Algeria interest, but extending his coalition also to include de facto the communists, who were with the Gaullists, but as rivals, in the Resistance. De Gaulle kept the UK out, among other reasons in order to build a French sphere of influence in western Europe. He failed in the broader objective, but did create a Common Agricultural Policy, based on a Franco-German-Dutch peasant alliance.
Since entry, the UK government has been successful in Brussels in pushing its own interest, building coalitions, linking the idea of the single market to the UK as a platform for it. Ireland has done the same. The author has an undeniable strong point in saying that the UK would have no say in the design of more open EU markets for digital, financial and other services.
But he is on weaker ground when he asserts that “the UK is unlikely to strike better trade deals alone than it has currently through the EU”. Some Leavers, like Professor Minford of Cardiff University Business School, question that trade deals are necessary to trade. This argument is developed in a powerful Leave film: https://m.youtube.com/watch?v=UTMxfAkxfQ0 The argument is that the EU is low growth; it is low growth because it is corporatist, is excessively regulatory, drives up local costs, and is anti-democratic. Niblett appears in this pamphlet to be unconcerned with the anti-democratic argument, and definitely does not get to grips with the argument that Brussels is a corporate stitch up for Big Business, Big Energy, Big Green, and Big Whatever.
Leaving, he says further, would also have a destabilizing effect on the rest of the EU, which will remain Britain’s largest market. This is probably the case. The French élites are hell bent on binding Germany in or down, and will not rest until a new Carolongian state has been created. It is precisely that fear that drives German concerns about Brexit: there will be after Brexit no UK ally pushing for open markets. Rather Germany will face a powerful and protectionist Franco-Italian alliance. That is the fear. But it remains speculation for the moment, credible like other scenarios, but speculation all the same.
Where Niblett definitely has a point is that the UK is the second largest net budgetary contributor to the EU. Without the UK contribution, the existing EU budget commitments would either have to reduced, or others would have to plug the gap. Since all budgets are bursting with commitments, the battle over who contributes what could get very nasty. Of course, the alternative scenario would be for Germany to leave the EU, and join the UK in a combined free trade policy. There is no excursion in this pamphlet into this type of speculation.
- In contrast, the main risks to the UK of remaining are political. The author highlights four: immigration; Turkey; the Eurozone; and the move to “ever closer union”.
- High levels of immigration from the EU, he says, would persist. Apparently, he considers this a cost of Remain.This is likely to have serious implications if it occurs. Immigration at past rates into the future means that the UK will have to build a Manchester at regular intervals. That, or housing prices stay out of reach of most people. It also would illustrate that the UK is not in charge of its borders. Let us speculate about this. Assume a Remain victory, by not too wide a margin. The Leavers, like the SNP in the independence referendum, will be back for more. They will have lost the referendum but won the argument. Staying in the EU demonstrates that the UK government is not sovereign. This is a recipe for an Evereferendum. Niblett does not mention this possibility.
- It is inconceivable, Niblett writes, that the EU will enlarge to include Turkey in the foreseeable future, and the UK and other EU states retain a veto over this decision. This may be so, but the way he looks at Europe in this statement is Brussels centric. Another way of looking at Europe is that Brussels is a Berlin Vorort, and Germany needs a deal with Turkey to limit the influx from outside Europe(not just Syria, but Afghanistan, north Africa, west Africa..) Of course, a sensible way forward would be to suspend the rigid implementation of the Schengen agreement in response to domestic concerns of populations worried about uncontrolled immigration, from countries with cultures and religions incompatible with local values. I mean Islam. The pamphlet does not deal with Islam. But the problem of Islam is central to the present problems of Europe. And Schengen illustrates only too clearly that the EU can have a common policy, but that its member states are responsible to their domestic electorates. For Niblett, domestic electorates seem not to weigh heavily.
- The UK need not fear the emergence of a more integrated eurozone, he writes. I tend to agree. Germany and The Netherlands are hell bent on avoiding any move to the EU as a Transferunion, where surplus countries recycle funds to deficit countries in order to keep the EU economy moving. The alternative, which has been discussed since 2010, is to break the Euro into hard and soft currencies, say a NordEuro and a SudEuro. The benefits of this have been amply aired. But it has not happened. And it has not happened, because France and Italy were the two countries that pushed hardest for the Euro. If they undo their work, to synthesise what is a complex argument, it is unlikely that they will get another chance.
- Niblett is surely right to argue that profound differences in national outlook will continue, and he has a credible argument that the trend in EU decision making overall is becoming more intergovernmental rather than centralized. But I do not believe that he means what he says. If he means what he says, then there would be an excellent argument to make in favour of the UK using this referendum to demonstrate beyond any manner of doubt that it champions a Europe of constitutional states, an alliance of sovereigns, who agree that they do not subscribe to a supranational enterprise that sucks democracy out of its member states. No one proposes that. The clear preference is to keep options open, just like the future. preserving constitutional democratic states takes a back seat in this pamphlet to keeping the project on the road, and the UK in.
In conclusion, pooling the UK’s sovereign powers, he writes, will enable it to design integrated responses to many challenges in the future on the well known grounds that no man is an island unto himself. This is apple pie, and one does not have to be a Remainer to subscribe to it. Leavers would argue that the UK would resume its seat at the WTO, presently occupied by the Commission, and given its representation on umpteen international bodies, would participate multilaterally, or in bilateral alliances with other states, members or not of the EU. What Niblett does not appear to understand is that the EU, as the German Constitutional Court has stated, is an alliance of sovereign states, who all operate in their own way in the global society of states. The EU in this sense is an open system, with multiple doors in and out.
He ends on a series of trumpet calls:
the first blast declares (rightly) that the world is more interdependent than in 1973. The trouble is that the Leavers agree on this. So it adds little to the Remain argument.
the second blast is a familiar one, which I have heard from many, including Lord William Wallace,(cited in the acknowledgements) who also wrote in the early 1970s, that “the notion of ‘absolute’ British sovereignty is illusory”. So did Lord Salisbury in the late 1860s. But then Salisbury was making the point against the progressives of the time, who were then keenly beating the drum of what we now call nationalism. Then the progressives were Liberals. Now the progressives, in many cases Lib Dems, are beating the drum of EU integration, and becoming alarmed at the rise of “populisms” across Europe. Why do they arise is not addressed here, other than the implicit message that the plebs clearly have not appreciated what is being done for them.
The third blast of Niblett’s trumpet is that the opportunities from remaining in the EU far outweigh the risks of doing so, and the risks of leaving far outweigh the opportunities. But he states this, and does not argue the case. The reason, I suggest, is that he and Chatham House spend too much time chatting to people with similar ideas.
What can one conclude about the conclusion? The question may be answered as to whether Niblett’s arguments will weigh on June 23 for Remain.
Niblett’s is the quintessential status quo position. The UK, he in effect says, is not at the heart of Europe, and that’s a good thing because the heart (the Euro, Schengen, the Franco-German tandem) is not functioning well. Nor, he adds, for good measure, is it likely to in the foreseeable future.
Niblett is, perhaps unwittingly, deeply cynical. The UK can have the benefits, without the drawbacks. Having spent four decades in France, I can hear the chant of “perfide Albion”. On the home front, I can hear the drum beat of those who repeat that being in the EU undermines UK parliamentary democracy. Niblett thinks this is nonsense. Many people do not.
The pamphlet does not explain how the UK can be at once more supranational than the Pope; in favour of “pooling”; comfortable with intergovernmentalism; not be phased by globalization; and blame public policy, if no other explanation is at hand. Its Sir Humphrey’s idea of bliss: I have all possible combinations in my pack of cards.
Most importantly, the pamphlet does not deal with three decisive issues: Islam; Germany; and Trump. Islam in Europe, and out of Europe, is very much part of the European equation. The balance of power has returned to Europe with a vengeance. Germany is again on top, and Europe is again in trouble. A Trump Presidency with an America First programme for the first time since 1940 pulls the rug out from under all the careful construction of British foreign policy since 1945.
Whoever wins on June 23 will do so because they have momentum, and because they will not take voters for fools.
Voters intuitively know that June 23 is not a vote, one way or the other, for the status quo; they know that uncertainty about the global and European economy has to be balanced by the certainty that constitutional democracy is the bedrock of the UK’s centuries old political stability; they know that Sir Humphrey is very smart, but cannot be always relied on to get it right; and they sense that the future presently looks especially unpredictable.
That is a very tall order for both sides of the campaign. The voters will nonetheless judge them on how they manage it.