Remainers as champions of UK parliamentary sovereignty: how delicious.

Remainers are sharpening their knives in the British press. Martin Wolf, the doyen of economic commentary in the FT, has an article entitled “The markets have taught Theresa May a hard lesson on sovereignty: the British government will learn about the limits of control in an open economy”., October 11, 2016,

David Aaronovitch in The Times of October 12, 2016, writes “Starmer is the best hope when Corbyn’s gone”, in reference to Keir Starmer’s question as Labour Brexit spokesman to Brexit minister, David Davis: what role for parliament in determining the way we leave the EU?

I summarise the articles, then comment.

Wolf on markets and sovereignty.

Politicians propose; markets dispose, he writes. The UK government ended the prospect of a bespoke Brexit last week at the Tory party conference. The Prime Minister made three key announcements:

First, she promised that the government would invoke the Article 50 exit procedure by March next year, thereby giving the initiative to the EU27 and focusing negotiations on a divorce to be finalized in two years. Given the complexity of EU decision-making this is too short a time period to reach a reasonable accord.

Second, the Prime Minister stated the deal was going to be an agreement between an “independent , sovereign UK” and the EU. Wolfe writes that by the time of exit, the UK is likely to find itself without preferential access to any markets.

Third, the Prime Minister said “if you believe you’re a citizen of the world , you are a citizen of nowhere”. Xenophobia was part of the referendum, writes Wolf, and statements like this are designed to scare off investors and workers.

As a result, the markets sold sterling. With the currency on ths skids, the Treasury may have to tighten the purse strings and raise interest rates. The currency, he argues, is on a cliff edge.

Wolf then goes on to argue that triggering Article 50 without parliamentary approval might be impossible. “It surely ought to be impossible”.

“By a thin margin”, he goes on, “the country voted for some kind of Brexit. But the government has no mandate for the rather extreme version it is choosing. Moreover, Brexiters insist that their goal is to restore parliamentary sovereignty. Why then does the government plan to ignore parliament when these decisions are taken?”

“What drove Leavers was, we are told, “the principle that decisions about the UK should be taken in the UK”. The currency markets and Britain’s EU partners are about to demonstrate the emptiness of that principle.

The premise of the Leave campaign, he writes, was false: a host of decisions that affect the UK will always be taken outside the UK. “But this truth is unlikely to stop the train towards a complete Brexit from departing on its timetabled journey. Stopping it would take a miracle, or rather a crisis. Is that likely? No. Is it possible? Yes.”

Aaronovitch on parliamentary sovereignty.

David Aaronovtich argues similar points from a different angle. Shadow Brexit secretary, Keith Starmer, asked David Davis, the Brexit secretary, in nthe House of Commons: what role will parliament have in determining the way we leave the EU?

Davis reply was a Cheshire Cat grin: the referendum provided a “clear, overwhelming and unarguable mandate”.

There is a glaring inconsistency, D.A. argues, between Leavers calling in the referendum for a return to sovereignty, and their denying parliamentary scrutiny of how the UK would leave.

There was indeed a mandate to leave, he writes. But nothing more. ‘The vote told us nothing about the different terms of access to the single market, what agreement represents a bottom line on freedom of movement, or even whether EU citizens — British or otherwise — can stay where they live after Article 50 is invoked.”

The government position had soon to be modified: having praised the referendum as a way of returning sovereignty from unelected officials in Brussels to parliament’s elected representatives, ministers could hardly then deny those very MPs a say in deciding what happens next.

Maybe, D.A ruminates Starmer is the man around whom a possible opposition can form, composed of the Labour front bench, the Lib Dems, internationalist Tories and parties of the regions”.

My comments.

Our two authors discuss the possibility of a “bespoke” Brexit, evoking three concepts: sovereignty, markets and consent. I argue that a parliamentary consensus is possible, but it can only be formed if the Remainers ditch the UK’s closet and official supranationalism, that had prevailed for over 40 years.

It is a delicious irony that Remainers have suddenly discovered parliamentary sovereignty. When the UK was definitely in the EU, Remainers were only too happy to go along with Prime Minister Heath’s definition in the European Communities Act of 1972, Section 2.1. of parliament as neutered. The Section stated that EU law took direct effect in the UK.

That made Whitehall from the start No 1 ally of the Commission and the European Court of Justice, great for the exercise of UK influence in the EU. Very soon both Commission and ECJ with UK support were planning for a liberal market policy. In the famous Cassis de Dijon case, the ECJ judged thhat standards legal in one country would also be legal in other EU countries (case 120/78). This developed into the doctrine of “mutual recognition”. Cassis, the French liqueur, had an alcohol level of 16% in France. Germany would not allow it to be sold as “liqueur” under German law, which states that the minimum percentage of alcohol should be 25%.  This verdict paved the way for decisions by qualified majority voting under the so called Internal Market introduced by the Single European Act in 1987. Prime Minister Thatcher was an enthusiastic supporter, and sent Lord Cockfield, a UK top accountant, to Brussels to implement the programme.

The trouble is that the Heath definition of the EU as supranational never won acceptance at home. When Commission President Delors used this “Internal Market” programme as a wedge to open his drive for monetary union, Thatcher sounded the alarm in her famous Bruges speech in September 1988, thereby powering the growing opposition in the Tory party—the party which had done most to bring the UK into the EEC-to the concept of ever closer union.

The concept of supranational Europe nonetheless found a champion in former President Giscard d’Estaing, who presided over the Constitutional Convention of 2002-2004. The Convention produced a European Constitution which was most definitely supranational. But it was voted down by the French, Dutch and Irish electorates in 2005.

Revived as the Lisbon Treaty, it has been handled with kid gloves in Germany, where the German Constitutional Court defines the Lisbon Treaty as doing no more than giving sanction to an alliance of sovereign states. In June 23, 2016 a majority of the UK electorate gave the UK official, but never clearly enunciated position,  a thumbs down. The vote was most definitely a vote against a supranational Europe, as conceived by Whitehall. In other words, the UK vote for Leave put the UK electorate in the same camp as the German Constitutional Court.

The 17.4 million voters who voted for Brexit voted for the principle that political decisions regarding the UK be made in the UK. Martin Wolf pours scorn on this popular definition of sovereignty. He argues that decisions are made in boardrooms all around the world; markets affecting the UK are governed by expectations and irrational exuberance around the world ; and policies are made in capitals in ways that may affect the UK, even if the UK is not directly involved. Wolf is simply stating that the world is interdependent and more so than it has ever been.

That is precisely the reason why parliament’s powers to scrutinise, amend or reject should be strengthened.

Companies operating on UK territory follow the law that prevails there. How that law is made is vital to its acceptance. It is called political consent, and it is precisely the lack of political consent that is, I argue, at the heart of the EU’s problems.

As illustration: there is lack of political consent in Germany, the Netherlands, Austria, Finland to a Transferunion; there is a lack of consent in France to “globalisation”, now conflated in the public mind with the EU; there is a lack of consent in Poland or Hungary to refugee quotas; there is a lack of consent in Ireland to tax harmonisation. The list can go on and on. Given the ubiquity of so much opposition to key components of the EU programme, as sketched for instance in the Five President’s Report, it is a reasonable proposition that the EU is not going to exit any time soon from its very long list of travails.

The hollowing out of western democracy.

The late Peter Mair argued powerfully in Ruling the Void: The Hollowing of Western Democracy. London, Verso, 2013 that the EU was one of the engines sucking powers out of the member states, that were moving to Brussels but that Brussels lacked legitimacy to implement them. Eurobarometer reports on public opinions across Europe have shown this for decades.

Given the present stasis in EU policy over the key issues of employment, immigration or public finances, it can be no surprise that the traditional centre right and centre left political parties that pushed for “more Europe” are in trouble. As Professor Giandomenico Majone argues in “The deeper Euro-crisis or the collapse of the EU political culture of total optimism“, EUI Working Paper law, 2015/10, the assumption was that the process of integration trumped results. The problem is that the EU population of about 520 million don’t know about the process, because it is far too complex, but are very concerned by the results.

The results are such as to offer major opportunities to so-called “populists”, in other words voters who respond to the angry voices we hear so much about. So-called, because so many voters feel that they have been led up a garden path by the bland promises of improvements, which have turned sour.

Take our friends in Fontainebleau, Pepe and Felicia. They came to France from Extremadura in 1960, illiterate peones. Pepe worked forty years or more in the grands projets of Paris, up at 4 am, back at 8 pm; Felicia worked in Fontainebleau households. Their children, a top engineer in Renault; a medical practitioner; a nurse. How more successful can you be? Both are moderate, hard working people. What matters to them is very simple: freedom and work.

Felicia, talking about the mass unemployment afflicting Spain, says: why have they done this to us? Why do they declare war on us? Pepe says he will vote for Podemos, the movement financed by Venezuela and that talks about work, while talking critically of “los de arriba”.

My friends  are not extremists in any way. But they tilt that way because of the EU’s major failings. There is nothing, nothing that revolts me so much about Remainers than those many among them who speak down their noses at the hoi polloi daring to vote differently to what they counsel. They are modern versions of the Duchess who sweeps into a crowded ballroom, looks down her lorgnette, and says: “Humphrey, there’s no one here”, and sweeps out.

What to do? Re root the EU in national opinions. That is where political consent is most vital. Doing so is not to stimulate “nationalism”: it is just to recognize the obvious that loyalties in Europe are national, ie local, or taken at a European level, provincial, where province equals nation. The June 23 vote was a wake up call to ground the EU in European realities. Those realities remain national.

Charles de Gaulle, not Jean Monnet .

Jean Monnet, regarded as the EU’s founding father, thought “national egoism” is what led Europe to the catastrophe. Who would gainsay his generation for thinking so? But the reality, as Charles de Gaulle knew, was that modern nations are often ancient creations, with their own cultures, histories, memories and institutions. They are also Janus like: one side is all about glory, blood and tears; the other side is the glue of modern constitutional democracy.

The EU panjandrums and many UK Remainers want to do away with frontiers and nations. They are dangerous ideologues, and their ideologies are creating mayhem in Europe. The European economy has not grown since 2008. Our panjandrums have no idea how to square free movement of people, human rights and militant Salafism. They are at sea, and lost.

Remainers have to be consequential, and make June 23 an opportunity to recast the EU. No better place than to recognise the major error of Heath in neutering parliament, and instead to make Europeans champions of national parliamentary powers. Yes, that means a different Europe. I sketch it in:

Revise not scrap the 1972 Act

To do that they have to revise not scrap the 1972 ECA, and clearly state in Section 2.1. that the Crown in parliament is sovereign, ie that the buck stops here,  President Truman’s homely definition of sovereignty. It means, yes, that the 3000 pieces of legislation that flow down from Brussels per year, sidetracking parliament completely, can be examined, amended or rejected piece by piece. Such an action would state unequivocally that the UK is no longer the champion of a supranational, unaccountable EU, as Whitehall has in fact been for forty years, but a champion from within of a European alliance of sovereign constitutional states. Such a Europe may be unfamiliar to people, but it would be an all weather Europe, complex and sui generis.

It would, my proposal is, keep some components of the present EU: a mutual commitment to the single market, renamed as the open market(as open as you like, mate. ie if the French persist as they do on national procurement, then be free to drive up your costs); the Commission would be given defined, not indefinitely expandable powers, and those powers would be limited to the market; the European Court of Justice would be given narrowly defined treaty powers(presently, the only treaty powers it has are in the Rome Treaty as a humble administrative court. The powers that it claims are the result of alegal judicial activism, so no surprise that academic research shows quite clearly that implementation of EU “law” is unequally, very unequally, implemented; and the European parliament, which posits the existence of a non existent European Volk, returns to its former shape of holding representatives of national parliaments, rooted in national realities.

The idea is conveyed in my slogan: re root; slim down; focus.

Sovereignty is vital to political consent. Political consent is vital to the European project. There is no political consent without parliamentary scrutiny. Make my day, Remainers, and champion constitutional democracy–for once.


About Jonathan Story, Professor Emeritus, INSEAD

Jonathan Story is Emeritus Professor of International Political Economy at INSEAD. Prior to joining INSEAD in 1974, he worked in Brussels and Washington, where he obtained his PhD from Johns Hopkins School of Advanced International Studies. He has held the Marusi Chair of Global Business at Rensselaer Polytechnic Institute, and is currently Distinguished Visiting Professor at the Graduate Schoold of Business, Fordham University, New York. He is preparing a monograph on China’s impact on the world political economy, and another on a proposal for a contextual approach to business studies. He has a chapter forthcoming on the Euro crisis. His latest book is China UnCovered: What you need to know to do business in China, (FT/ Pearson’s, 2010) ( His previous books include “China: The Race to Market” (FT/Pearsons, 2003), The Frontiers of Fortune, (Pitman’s, 1999); and The Political Economy of Financial Integration in Europe : The Battle of the Systems,(MIT Press, 1998) on monetary union and financial markets in the EU, and co-authored with Ingo Walter of NYU. His books have been translated into French, Italian, German, Spanish, Chinese, Korean and Arabic. He is also a co-author in the Oxford Handbook on Business and Government(2010), and has contributed numerous chapters in books and articles in professional journals. He is a regular contributor to newspapers, and has been four times winner of the European Case Clearing House “Best Case of the Year” award. His latest cases detail hotel investments in Egypt and Argentina, as well as a women’s garment manufacturer in Sri Lanka and a Chinese auto parts producer. He teaches courses on international business and the global political economy. At the INSEAD campus, in Fontainebleau and Singapore, he has taught European and world politics, markets, and business in the MBA, and PhD programs. He has taught on INSEAD’s flagship Advanced Management Programme for the last three decades, as well as on other Executive Development and Company Specific courses. Jonathan Story works with governments, international organisations and multinational corporations. He is married with four children, and, now, thirteen grandchildren. Besides English, he is fluent in French, German, Spanish, Italian, reads Portuguese and is learning Russian. He has a bass voice, and gives concerts, including Afro-American spirituals, Russian folk, classical opera and oratorio.
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2 Responses to Remainers as champions of UK parliamentary sovereignty: how delicious.

  1. MR Alastair J F Mellon says:

    Hi Jonathan,

    We exchanged messages via the FT website a week or so ago. In summary, you seem to be saying that subject to revoking section 2.1 you’d stay and fight for a Europe of Nations inside the EU recognizing that the contradictions of the Euro will eventually assert themselves and we should be there to help pick up the pieces for a slimmer less ambitious EU (EEC) of nations, right?


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