29 March 2017

Brexit is both victory and defeat for Euroscepticism


My first political memories come from early 1982, with my old man telling me that he thought the SDP would win the next General Election. He was wrong about that. But he was right when he explained to me a few months later not only that he would live to see a united Germany, but when it would occur.

For me, growing up, our membership of the EU and a divided Germany seemed like immoveable features of the geopolitical landscape. But, then, German unification taught me — and, I suspect, many others like me — that what seems eternal in politics can change very quickly. Geopolitical structures become obsolete, the world moves on, and in the end, forces seeking this or that find they can achieve it if they can get the people on side.

I wasn’t a long-standing opponent of the EU. Only around 30 per cent of the public, perhaps rather less, were. In the House of Commons, by the 1990s as the last of the Old Labour dinosaurs went extinct, the figures would have been even lower — maybe 30 or so MPs.

But I was a Eurosceptic. I believed the EU was aiming for the creation of a Single European State. In 1991, Leon Brittan addressed a meeting at the Oxford Union and I remember asking him: “If an entity makes its own laws and has its own supreme court, Parliament, civil service and, soon, a central bank, what else is it if not a state? If it waddles like a duck and quacks like a duck, isn’t it probably a duck?”

Like a whole generation of Conservatives, I learned that Britain was different from its Continental partners in important ways. They had different legal and constitutional traditions from each other, to be sure, but they had far more in common with each other than they did with us. In any event, most of their constitutions had only been around a few decades while ours had been evolving for nigh on a thousand years. There would be gains and losses from European countries fusing into a Single European State. That was not necessarily a bad thing in itself, but it wasn’t right for us, because we would lose so much more than others would in the fusing.

This was the great political issue of the early to mid-1990s, when Britain’s eventual departure from the EU was set in train. The heroes of the Maastricht Treaty debates ensured that Britain secured an opt-out from the euro. A start.

Then John Major lost the 1997 General Election. The Times had usefully provided a seat-by-seat guide to which MPs would vote against joining the euro when the moment came. I duly followed the Times’ instructions and voted Labour. I have no regrets. John Major, Ken Clarke and Michael Heseltine would have been in charge if they had won in 1997, and they would have tried to take us into the euro in the first wave. Their defeat in 1997 was the next key step on our path to Brexit.

In those days, Tony Blair wrapped himself himself in the flag and wrote comfortingly in the Sun about his attachment to the pound. It might have been fleeting, but it was enough. A few of us – vastly outnumbered by the consensus of economists in favour and struggling against the sense of inevitability of joining among the public – wrote article after article.

We explained why the UK joining the euro would be a bad idea — how it would destroy sovereignty and why a super-independent central bank like the ECB would lead to excessive public spending, damaging levels of debt, destabilisation through excessively low interest rates in high-growth regions, and over-convergence in economic cycles, with a co-joined great recession dragging all the members down together to a grim version of “convergence” in the end. Then 1999 came and went and the others began the euro and we did not.

Not victory yet, though. Gordon Brown retained his “Five economic tests”. Many still assumed joining was inevitable. On the eve of the 2001 General Election, William Hague warned that a victory for Tony Blair on June 7 would see Labour starting the process of joining the euro the day after the election. He said it was the “last chance to save the pound”. Yet by 2003, with the economy growing well and the inflation targeting regime under the Bank of England appearing (albeit wrongly) to be a success, Gordon Brown saw little reason to change a system that was working for him.

So, we stayed out of the euro. There would be no UK participation in the Single European State. That set a clock ticking. For the EU was not designed to work properly if a major member opted out of its central state-building project. If the UK not joining the euro was not to mean our inevitable eventual destabilisation of the whole project, or departure, we had to have a major renegotiation of our EU status. I thought that could be made to work, and argued so at length, with repeated proposals for ways to renegotiate.

For four General Elections in a row, the Conservative Party stood, promising a major renegotiation of our position within the EU. But when the moment came, David Cameron decided that renegotiation was not a priority. His priority was a Coalition with the Lib Dems. He was even prepared to offer them a chance at electoral reform.

Along with many Conservatives, I was incandescent. Not only because Cameron had made me a liar: I had told voters, election after election, that we would definitely keep our promises to renegotiate and no, we wouldn’t simply back-track as soon as we had a sniff at power. That was bad enough. But even worse was that 2010 was our last realistic chance to renegotiate anything.

By 2010, the EU was in crisis. The euro chickens had come home to roost, as the interplay between the eurozone’s flaws and the banking crisis (with the euro simultaneously part-cause of the banking crisis and all-victim of it) stretched the EU Treaties past breaking point. The EU would never be more vulnerable, never need the UK to agree to a Treaty revision more than it did in 2010. We had leverage. Yet we revised the Lisbon Treaty and asked for nothing in return.

Realistically, that was the end for me. It was not a happy end. I had spent my adult political life arguing for a way the UK could stay in the EU without being drawn into the Single European State. I lost. If even the Conservative Party, having fought four elections in a row promising to renegotiate, did not consider renegotiation a priority, renegotiation was finished as a concept.

The only alternatives left were all-in — join the euro, press enthusiastically for a Single European State and make the most of that inspiring endeavour — or all-out: Brexit. Either path had strong attractions to me. But only 7 per cent of UK voters favoured joining the euro by then. I waited to see if Cameron might secure some unexpected repatriation or new status for non-euro EU members. He did not. So out it must be.

The above is, I believe, the key journey for most of the main opinion-formers who came out against our EU membership in 2016. From the 30 or fewer “usual suspects” of the early 1990s, by 2016 some 130 Conservative MPs declared for Brexit. Newspapers that had argued against Brexit for decades ran leaders supporting it. At pubs and churches and coffee mornings and workplace water-coolers, people who had assumed, all their lives, that our EU membership was as eternal as I had assumed East Germany was as a small boy, suddenly said we should leave.

Yes, yes. Immigration. That got the 30 per cent who had always wanted to leave to the ballot box, and added in some more. Doubtless we would not have voted to leave without that. But immigration was used, skilfully, by opinion-movers who themselves couldn’t care less about immigration, to achieve what they did care about. If those opinion-movers hadn’t travelled the journey I describe above, immigration would never have come close to securing Brexit by itself.

The real reason we are leaving is that a whole generation of politically influential people who had spent much of their adult lives arguing for renegotiation so that we could stay in the EU, eventually despaired of the possibility of that ever happening. Since we had already achieved a semi-detached status in the EU — not in the euro and not in other state-building projects such as Schengen, either — going back to Euro-enthusiasm was not an option.

Instead, we embraced the future. Great political events such as German Reunification and Brexit are rarely painless. But they do create opportunities we can barely imagine at the time. Today, Article 50 is triggered. In two years, our EU membership is done. Let’s find out what Britain did next.

Andrew Lilico is an economist and political writer