Discontents with globalisation brought us to the point where Britain’s place in Europe is at stake – and will have to be addressed whatever the outcome on 23 June
By Pat McFadden
Britain’s postwar view of ourselves and our role in the world, shaped by victory in the second world war, saw a choice between a global role and a European role. Seeing our global role as a choice between these two paths led us to be ambivalent about Europe, to apply to join later than might have been the case and to continue to wrestle with questions of sovereignty after we did. Labour’s period in government after 1997 rejected the notion of a choice between Britain having a global or European role and saw one as reinforcing the other. Being a major player in the EU enhanced our global role and our global reach enhanced our power within the EU. This was the centrepiece of a confident stance towards the unfolding globalisation of the early 21st century.
However, globalisation was unevenly experienced in parts of the country and the geopolitical stance was not matched by a sense of inclusion in Britain’s national story. These discontents with globalisation have posed challenges to centre left parties all across Europe. We should therefore, not see the referendum and a reaffirmation of EU membership as an end point. Even if we vote to remain in the EU, Labour must face up to the sense of loss in some parts of the country that globalisation has helped bring about. There is an urgent leadership task to develop an inclusive economics in which every part of the country and every section of society feels they have a part to play.
The ashes of 1945
The United Kingdom’s debate over its future in or out of the EU has long roots stretching back to the ashes and rubble of postwar Europe in 1945. Europe was devastated by six years of the most terrible destruction. Millions dead. Millions more homeless. Economies destroyed. Countries on their knees. Fascism vanquished. Freedom saved. But a continent reeling at the awful price of total war. And this was the second war – Europe had already torn itself apart a generation before.
Amid all this stood the United Kingdom as a victor. Victorious not only in the fight for its own life but for the freedom of others to choose their way of life. One of the world’s “Big Three” alongside the United States and the Soviet Union: a country with global reach and a global view.
From the beginning, Europe was viewed through the eyes of our military triumph. Yet even in the moment of triumph, with Britain at its strongest militarily and diplomatically, the country had to face up to the price paid. War had cost Britain dearly and within months of it ending the newly elected Labour government had to seek a loan from the United States to keep going. At our greatest hour, the question of how to sustain Britain’s global role and vision was already real.
The questions we faced were as follows: what could we do to stop Europe becoming engulfed in war once again; if Europe needed new structures were these just a matter for Europe or for us too; could our economic strength match our postwar view of ourselves; later, particularly after Suez. how should we respond if we could not sustain our image of ourselves as a global power with global military reach; and, perhaps most urgently of all, was there a global role for Britain as leader of the Commonwealth and ally of the United States or was our destiny to be more closely aligned with our European neighbours – and were these two futures really alternatives or could one reinforce the other?
These questions dominated thinking about Britain and Europe in the decades following the end of the war. Perhaps the most persistent was the notion that we faced a choice between playing a global and Atlanticist role or a European one and that to choose one was to reject the other. This is the question which has run through our politics from 1945 until the present day.
Hugo Young’s history of the United Kingdom’s modern European story charts our path through these questions or how “Britain struggled to reconcile the past she could not forget with the future she could not avoid.” Young reminds us that as early as 1940 Winston Churchill foresaw a Europe of five single powers – including the UK – and four confederations. “These nine powers would meet in a Council of Europe which would have a supreme judiciary and a Supreme Economic Council to settle currency questions etc”. Two years later, he wrote to Anthony Eden of a future where “I trust that the European family may act unitedly as one, under a Council of Europe in which the barriers between nations will be greatly minimised and unrestricted travel will be possible.”
Perhaps better known was Churchill’s call in Zurich in 1946 to “recreate the European family in a regional structure called, as it may be, the United States of Europe”. His speech to the first Congress of Europe in the Hague two years later addressed the sovereignty issue raised by any new European structure which involved more than simply the collaboration of nation states: “It is said with truth that this involves some sacrifice or merger of national sovereignty… It is also possible and not less agreeable to regard it as the gradual assumption by all nations concerned of that larger sovereignty which can also protect their diverse and distinctive customs and characteristics, and their national traditions.”
The issue of “that larger sovereignty” has dogged debates on Europe to the present day. Do we lose or gain by pooling sovereignty? Is power something to be kept at the national level or can it be multiplied by acting internationally? This question informed our early hesitation in joining the original group of six EEC members. It ran through the objections to the EEC in the 1975 referendum articulated by Tony Benn. It was the flame that kept Tory Euroscepticism alive from the 1990s to the present day. And dealing with objections to pooling sovereignty was at the heart of the recent intervention in the current EU campaign by President Obama when he reminded Britain how power can be leveraged as well as hoarded.
Time did not change the facts of history but it did change the economic disparity between Britain and continental Europe in the two decades after the war ended. If in 1945 Britain clearly stood above all others in Europe in terms of economic strength by 1960 that picture had already changed markedly. Europe’s economies had been shattered by war but with the help of the Marshall plan – the greatest postwar statement of American interest in the fate of Europe – they recovered and grew more rapidly than the UK’s. Average annual growth rates from 1950 to 1960 were 7.8 percent in West Germany, 5.8 percent in Italy, 4.6 percent in France and 2.7.percent in Britain. By 1958 the West German economy was bigger than the UK’s and it would remain Europe’s biggest economy for decades to come.
And if the economic facts were changing, Suez changed the military ones. The failure at Suez forced a reassessment of Britain’s military role and perception of itself. Our capacity and willingness to take up arms independently of our US ally would never be seen in the same light again.
Britain’s focus on our global role and our view that as victors we need not take part in the emerging structures of the new Europe persuaded us to stand back as these took shape. And take shape without us they did through the Schuman plan in 1950 launching the European Coal and Steel Community – the first supranational European initiative of the postwar era – the Messina conference involving the six members of that Coal and Steel Community several years later and ultimately the signing of the Treaty of Rome by the original six in 1957.
But the impact of Suez and the changing economics were impossible to ignore. The growing importance of trade with Europe and the contrast between the emotional attachment of the “kith and kin” relationship with the Commonwealth and the real path of Britain’s trading relations pointed to a reassessment. The change of heart came first with Harold MacMillan, to be met with the first French “non”. Then, later with Harold Wilson, to be met with the second French “non”. And, finally, and successfully, with the third British application made by Ted Heath.
Labour’s journey began with scepticism. Ernest Bevin, Labour’s postwar foreign secretary decided to keep Britain out of the European Coal and Steel Community, even after his initial fury about being kept in the dark about the Schuman plan had subsided. Following the formation of the EEC, when Britain made its first application to join under MacMillan, Labour’s leader, Hugh Gaitskell, responded with his verdict that it would be the “end of a thousand years of history”. Gaitskell’s speech, albeit caveated with keeping the door open to a future reassessment, disappointed many of his usual followers and delighted many of his usual opponents. As the applause came his wife Dora concluded, “all the wrong people are cheering”.
Governing tends to change attitudes and within a few years of taking office in 1964, Wilson’s Labour government made a second attempt to join. Jim Callaghan, chancellor at the time and previously sceptical, concluded that “the argument about sovereignty is rapidly becoming outdated”. However the attempt failed in the face of continuing French resistance and it was left to Heath to make the third and successful attempt.
When Heath eventually put the crucial membership vote to parliament, he was helped by 69 Labour rebels who broke their own party whip to vote alongside the Conservatives to take Britain in, with 39 Tory rebels voting the other way. And on 1 January 1973, the United Kingdom, together with Ireland and Denmark, joined the EEC.
Both parties at this time had their pro- and anti-EEC supporters, though in those early days of membership, the centre of gravity in the Conservative party was mostly in favour of membership. Within Labour there was a strong current of Euroscepticism which held that the EEC was a “capitalist club”, unaccountable to Parliament, and that, given that it was a Tory prime minister who had taken us in, it must be a bad thing. Moreover, the strong Labour supporters of the EEC were Jenkinsites for whom the left had little time.
Wilson, in the precursor to the Cameron strategy 40 years later, tried to square the circle by promising to renegotiate terms and put the results to a referendum. The 1975 referendum played out the whole argument. The Labour cabinet of the time split with a minority of outers led by Tony Benn campaigning for withdrawal. A special party conference held in April 1975 voted by a margin of roughly two-to-one in favour of withdrawal. The referendum itself showed the voting public to be a reverse image of the delegates at Labour’s special conference – they voted to remain by a majority of two-to-one. The referendum settled the question of membership in the country, if not yet in the Labour party.
The prominence of the pledge to withdraw from the EEC in the 1983 election has meant that it has since come to have a strong association with the disastrous result that ensued
Following Labour’s election loss in 1979 and the divisions which followed, Euroscepticism came to the fore once again as a key pillar of argument on the left and in 1980 Labour adopted a position of withdrawal from the EU. The commitment to withdrawal from the EEC was enshrined in the 1983 manifesto which put it thus:
The next Labour government, committed to radical, socialist policies for reviving the British economy, is bound to find continued membership a most serious obstacle to the fulfilment of those policies. In particular the rules of the Treaty of Rome are bound to conflict with our strategy for economic growth and full employment, our proposals on industrial policy and for increasing trade, and our need to restore exchange controls and to regulate direct overseas investment. Moreover, by preventing us from buying food from the best sources of world supply, they would run counter to our plans to control prices and inflation.
For all these reasons, British withdrawal from the Community is the right policy for Britain – to be completed well within the lifetime of the parliament. That is our commitment. But we are also committed to bring about withdrawal in an amicable and orderly way, so that we do not prejudice employment or the prospect of increased political and economic co-operation with the whole of Europe.
It is perhaps unfair to put Labour’s catastrophic 1983 defeat down to a single policy. At the time there were plenty to choose from. But the prominence of the pledge to withdraw from the EEC in the 1983 election has meant that it has since come to have a strong association with the disastrous result that ensued.
Neil Kinnock inherited a party and a policy platform in need of fundamental overhaul to have a chance of governing again. He set out his view of the European issue early in his tenure in an article for the New Socialist magazine:
Britain’s future, like our past and present, lies with Europe. But for us as socialists, it will still only lie within the EEC if the Common Market can be transformed to measure up to our wider vision of Europe’s own future.
Kinnock’s strategy, rather than assaulting the anti-EEC position head on, was to persuade the party piece by piece to accept the reality of membership, and at the same time to work more closely with fellow European Socialist parties on a more pro-economic growth agenda for the EEC. By 1987, he had succeeded in removing the commitment to withdrawal, though the wording of the manifesto suggests a policy more of acceptance rather than enthusiasm:
Labour’s aim is to work constructively with our EEC partners to promote economic expansion and combat unemployment. However, we will stand up for British interests within the European Community and will seek to put an end to the abuses and scandals of the Common Agricultural Policy. We shall, like other member countries, reject EEC interference with our policy for national recovery and renewal.
For the position to move from accepting reality to a realisation that the EU could be an arena of social progress took a speech from the president of the European commission, Jacques Delors, to the TUC in 1988. The timing and context for the Delors speech is important. The 1986 Single European Act was the biggest change in the functioning of the EEC since its foundation and paved the way for the creation of the single European market. It also rendered more urgent the idea of a social dimension to go alongside the creation of the single market the centre of the Act.
Alongside the changing European context, the domestic one was also ripe for Delors’ message. Labour had by now lost three elections in a row. Thatcherism was triumphant domestically and although Kinnock had been heroic in facing down Militant and dragging the party on a modernising path, there had been little electoral advance in the 1987 election. Delors’ speech would mark a turning point in the attitude towards Europe in the British Labour movement. He told the delegates:
Our Europe also needs clear rules and respect for the law. While we are trying to pool our efforts, it would be unacceptable for unfair practices to distort the interplay of economic forces. It would be unacceptable for Europe to become a source of social regression, while we are trying to rediscover together the road to prosperity and employment.
The European Commission has suggested the following principles on which to base the definition and implementation of these rules:
First, measures adopted to complete the large market should not diminish the level of social protection already achieved in the member states.
Second, the internal market should be designed to benefit each and every citizen of the Community. It is therefore necessary to improve workers’ living and working conditions, and to provide better protection for their health and safety at work.
Third, the measures to be taken will concern the area of collective bargaining and legislation.
No politician in power, no one who held a position where they could actually do things and influence events rather than protest about the decisions of others, had spoken to the British labour movement like that for a very long time. They had learned about the impotence of opposition through the bitter taste of repeated election defeats. But, in that moment, Delors pushed most of the Labour party and the trade unions from grudging acceptance of the reality of membership to full-throated enthusiasm. The TGWU leader, Ron Todd, responded saying: “The only card game in town at the moment is in a town called Brussels.” Suddenly, Labour saw a reason for hope, a place where policies other than those advocated by Margaret Thatcher’s government could be pursued. Thatcher saw the importance of the Delors speech too and it was soon followed by her address in Bruges warning Europe not to push the new agenda he had set out.
The first outing for Labour’s new attitude to Europe came with the 1989 European elections which the party fought as the clearly pro-European party. The result marked Labour’s first victory in a national election since 1974 with the party taking 40 percent of the vote to the Conservatives’ 35 percent and winning 45 MEPs to the Conservatives’ 32 – an exact reversal of the previous European elections in 1984.
By the time of the next general election any ambiguity in Labour’s position had long gone. The 1992 manifesto argued not only for membership but for opting in to the Social Chapter which the Conservative government led by John Major had refused to join, for enlargement to include new members including the former Communist countries and even for the European Central Bank to be located in the UK. It pledged:
The Labour government will promote Britain out of the European second division into which our country has been relegated by the Tories. Our first chance will be the United Kingdom’s six-months’ presidency of the Community, starting on 1 July. We shall use that presidency to end the Tories’ opt-out from the Social Chapter, so that the British people can benefit from European safeguards …We shall play an active part in negotiations on Economic and Monetary Union. We shall fight for Britain’s interests, working for Europe-wide policies to fight unemployment and to enhance regional and structural industrial policy. The elected finance ministers of the different countries must become the effective political counterpart to the central bank whose headquarters should be in Britain. We shall make the widening of the Community a priority, and shall advocate speedy admission for Austria, Sweden, Finland and Cyprus, whose membership applications have been or are about to be lodged. We shall seek to create conditions in which, at the appropriate time, the new democracies of Central and Eastern Europe can join the Community.
While Labour would lose the 1992 election, its conversion to being a pro-European party in terms of policy and leadership stance was now firmly entrenched. Labour Eurosceptics remained but they were small in number and few held positions of influence in the party. On the union side, the TUC and most of its affiliates were strongly pro-European. Successive TUC general secretaries like Norman Willis, John Monks and Brendan Barber were among the most consistent pro-European voices on the British left.
From pro-European to globalisation
The election of the pro-European John Smith as Kinnock’s successor – one of the 69 Labour rebels who voted with Heath on the original decision to join – guaranteed that a commitment to EU membership would remain following the 1992 defeat.
Following Smith’s death in 1994 his successor, Tony Blair, did not have to change the European policy because Kinnock, Delors and Smith had already ensured the party would have a pro-European stance. Blair dealt squarely with that old postwar choice of being global on the one hand or European on the other by not seeing it as a choice at all. He did not see Britain’s role as being either global or European – to maximise its power and influence in the 21st century, Britain had to be both.
Blair thought the Euroscepticism which had crippled the Major government was bad for the Conservatives and bad for the country. He saw the Conservative government’s stance as a timid posture of defeat, governed more by trying to manage unbridgeable divisions within the Conservative party over Europe than optimism and confidence about the possibilities for Britain. He was determined to reset relations with the EU and place Britain at the forefront of debate on how the EU should develop in the future. Blair believed EU enlargement to the former communist countries of the Warsaw Pact would not only bring more countries into the democratic fold but was also an opportunity to reach out and forge new alliances rather than have the EU run by the traditional Franco-German axis.
Crucially, Blair’s European policy was not just about Britain’s role in Europe. It was also about how he saw Britain’s role in the world. For him, choosing between the Atlanticist and European pillars of postwar policy was destructive to both. Rather than seeing Atlanticism and Europeanism as being alternatives he saw one reinforcing the other. He was convinced that Britain would be better able to maintain the special relationship and get a strong hearing in Washington if it was fully engaged in the EU. The same also went for speaking to Russia, China or India. And, in a similar way, he thought European allies would take Britain more seriously if they thought we were taken seriously in Washington.
Blair’s European policy was not just about Britain’s role in Europe. It was also about how he saw Britain’s role in the world
This was an ambitious and optimistic picture of what Britain could be. The UK may not have the military might of the past, but using its soft power and diplomatic networks it would seek to maximise its leverage through all its networks – the UN, the Commonwealth, the EU and through developing organisations like the G8 and then G20. For Blair, the idea of withdrawing from the EU was akin to signing a British resignation letter in terms of its effect on our world influence.
One of the first acts of the Labour government was to sign up to the Social Chapter from which the Conservatives had opted out. This involved equal rights for part-time workers, minimum maternity pay and leave requirements (which the government eventually went beyond) and information and consultation rights, particularly for workers in firms operating across national boundaries. Labour kept the opt-out on the working time directive which allowed workers to work more than 48 hours a week if they wished but it enhanced the paid leave rights within the directive, adding the equivalent of the eight British public holidays to the 20 days in the directive ensuring that full-time workers in the UK were entitled to 28 days paid leave. In this, the UK made a choice to go beyond the minimum terms of the directive and extend new paid leave rights to millions of workers who benefitted from the change. Although not always enthusiastic for new social policy measures proposed within the EU, towards the end of its time in office the Labour government also agreed the agency workers directive ensuring equal pay for agency workers if they were on a placement for more than 12 weeks.
If the issue of membership was settled, the issue of the single currency was not. Blair was instinctively in favour of the UK taking part but had delegated control of economic policy to his chancellor. Gordon Brown, more sceptical of the single currency, constructed a series of five tests which were flexible enough to come down on either side of the equation. For a time, they served as a holding position. Eventually, when a decision had to be taken, the will of the chancellor and Treasury prevailed and the government-commissioned reports on the five tests concluded that Britain should not join. Blair accepted the verdict. A split with his chancellor on a question of such fundamental importance would have been impossible for the government.
Labour concluded its period in office with the basic issue of membership settled though it was a distinct form of membership which kept Britain outside some of the key frameworks of the EU, specifically the Schengen passport free zone and the single currency. It would only be under a Conservative government, with a much stronger Eurosceptic tendency, that the issue of membership would be revisited.
Globalisation’s winners, those left behind, and leadership challenges for the centre left
Labour’s position on Europe in the last years of the 20th century and the early years of the 21st was, in part, a means of maximising Britain’s influence in the era of globalisation. Power was shifting from west to east. New economic giants were emerging in China and India. Supply chains were becoming more international and the development of the single market seemed to go with that grain. Borders seemed less relevant, certainly to economics. The breaking down of barriers following the fall of the Berlin Wall, the opening up of new markets, the technological revolution, Britain’s soft power and cultural reach – all of these seemed to point to new international possibilities. Britain marketed itself as an open flexible economy, encouraging inward investment, confident about its place in the world, a place where people with energy and talent could start anew. It sought to project itself as a country at ease with itself in the 21st century.
Except not all of Britain was at ease with these changes. While Britain as a whole saw significant benefits from globalisation, in some parts of the country people felt disenfranchised from this national story. Disruptive economic change had a long lasting and sometimes destructive effect in many of Britain’s smaller cities which had been reliant on manufacturing jobs. Although the idea that Britain did not make anything anymore was not true – British strength in automotive, aerospace, food, drink, pharma and other sectors remained and in some cases grew – much mass manufacturing had gone and the loss of the jobs was often accompanied by a long-lasting loss of pride identity and purpose.
Globalisation’s boosters saw the opportunities it brought but were slow to appreciate the sense of loss that accompanied those opportunities, at least in some parts of the country.
For some communities, the steep rise in immigration following the expansion of the EU to include the former communist countries of central and eastern Europe added to this sense of loss. For some it felt like globalisation, even if it made goods cheaper, was the force that had taken jobs away and brought more labour competition for the jobs that remained.
Globalisation’s boosters saw the opportunities it brought but were slow to appreciate the sense of loss that accompanied those opportunities, at least in some parts of the country
All of this meant that, underneath Britain’s confidence about globalisation, a proportion of the population simply felt left out. They were not seeing the greater rewards that some saw and they did not share the view that the present was better than the past.
The financial crisis exacerbated these feelings. Banks were bailed out, unemployment rose and with it resentment at unequal rewards. The banking model seemed to privatise the rewards and nationalise the risks. The bailouts themselves were aimed at saving the public from the consequences of bank failures and the seizing up of the financial system. The government could not contemplate the consequences of cash machines drying up and the payments system freezing up. Yet despite the undoubted economic and social necessity of keeping the financial system going, the public saw highly paid workers being protected while some of them lost their jobs.
This sense of loss and resentment at some of the changes brought about or speeded up by globalisation, coupled with changes in labour markets which meant more people were self-employed or employed by small business, posed a challenge to the electoral support for social democratic parties across Europe. Their model of success and support was being eroded and they faced challenges from both right and left.
Into this mood in the UK stepped Nigel Farage and the UK Independence party. Previously Euroscepticism had been focussed on parliamentary sovereignty and whether each new directive or treaty interfered too much in the running of the country or took us further along the past to a “European Superstate”. But the Ukip argument was less concerned with the volume of EU legislation and more focussed on one single aspect of membership: that as the EU got bigger, the free movement rules which are a basic condition of membership meant more people had the freedom to come to live and work in the UK. The answer they posed was simple: to advocate withdrawal from the EU as a response to concerns about immigration levels.
Most of the new immigrants who came to the UK were good, hard-working and law-abiding people. Studies would show they paid more in taxes than they took out in benefits. Employers in both public and private sectors liked the availability of more people coming to seek a new life in Britain. Those who came overwhelmingly came to work, not to milk the welfare system. They were attracted by a growing economy, a country already diverse in its population and the use of English -the world’s most common second language. Yet despite the economic benefits to this movement of people to Britain, the sense of loss was still there and it now had a political voice and a focus on membership of the EU.
In much of Britain’s postwar debate about the EU it had been about a choice of roles in the world: global, Commonwealth-focused or European. What Labour in government had done was to reject that choice and advocate a view that one reinforced the other, particularly as a means of the country making the most of globalisation. Yet now, at least for a proportion of the population, Europe was being viewed not through the lens of a market for goods and services or in terms of Britain’s role in the world but rather a source of population change and which was causing significant concern and, in some cases, deep opposition. A divide seemed to open up in the country between globalisation’s winners and those who felt they were losing out through the changes it brought about. These anxieties and responding to them pose big questions to centre-left politics way beyond the question of EU membership.
While Labour had come full circle since the days of 1983, the Conservatives had been heading in the opposite direction. Following Mrs Thatcher’s resignation as prime minister Euroscepticism grew in the party and a series of leaders hostile to Europe were elected. Even the moderniser David Cameron, in almost all other respects determined to move on from the rightwing Tory image of the 1990s and early 2000s, promised to pull the Conservatives out of the European People’s party – the main centre-right grouping in the European parliament – in order to win the leadership.
For a time, Cameron held to his position that he did not want to “bang on about Europe”. He even whipped his own MPs against a referendum in 2011. But in early 2013 he gave in to Eurosceptic pressures within his own party and from Ukip with a speech at Bloomberg outlining the 21st century version of Wilson’s strategy in 1975. He would negotiate a new deal with the EU then put the results to the British people in a referendum should his party win a majority at the 2015 election.
The position allowed Cameron, for the time being, to hold his party together. His Eurosceptics were delighted. His Europhiles were weakened and, in any case, fewer in number than in the past. And he hoped to manage his way through it. Yet the promise of a referendum, and the declared possibility that if he did not get what he wanted in a referendum he might advocate withdrawal from the EU, meant no senior government minister made the case for EU membership with any conviction between the moment of the Bloomberg speech and the conclusion of the renegotiation in February of this year. It also meant that when the referendum campaign came and the prime minister argued that there would be extremely damaging consequences for Britain in terms of our economy and security should we leave the EU it was impossible to avoid asking why he had led the country to the possibility of Brexit in the first place.
Within the EU itself, the twin crises of the eurozone and later the refugee crisis brought new problems. For most of the period since the signing of the Treaty of Rome, the EU in its different incarnations was a scene of growing economies, membership and power. The club of six had become a club of 28. Its single market had become the biggest free trade area in the world. It had served as a platform for the transition from tyranny to democracy in the post-communist era. What started as a project for peace had become a project for European power where collectively, its members could negotiate on equal terms with the US and China.
Yet for all this success, the continuing problems of the eurozone in the aftermath of the financial crash in 2008 and the arrival of over a million refugees in the summer of 2015 created the impression of a continent caught in the headlights of change. Europe’s problem in coping with these twin crises of economy and refugees was not the Eurosceptic charge of an overweening bureaucracy and an over-mighty set of structures. It was instead a Europe which had still not developed the structures to match a monetary union where members had widely varying economies. It was a Europe which, faced with the refugee problem, retreated all too readily into nation state responses rather than collective solutions. These problems required more co-ordination and more co-operation at the very moment its citizens’ disaffection with its institutions and responses seemed highest.
Two visions of the future
The referendum campaign has offered Britain two visions of the future: the old global or Atlanticist pull and the vision of power multiplied through international engagement. On one side sits a pure vision of sovereignty which rejects “that larger sovereignty” of which Churchill spoke. On the other, a vision of sovereignty, power and interdependence as being closely connected.
In the Brexit vision, being outside frees Britain from Europe and offers the chance to make our own way, negotiating our own trade deals and controlling our own borders. In this view there is nothing to be gained from membership of an organisation which at best we do not benefit from and at worst is a conspiracy against us.
But, in reality, the Brexiteers face a choice. They can outline a future in which little changes economically if we withdrew because we would remain part of the single market, though with no say over its rules. Or they can focus on limiting immigration. They can’t do both because there is no existing model of someone outside the EU trading as a full member of the single market which does not include acceptance of its rules including the free movement of people. Faced with this dilemma, they have recommended being both inside and outside the single market.
Leading Leave spokesman Michael Gove argued not for a Norwegian or Swiss style deal or indeed any arrangement which accepts single market rules and guarantees single market access. Instead he advocated an arrangement outside both the EU and the single market, similar to the current position of Albania or Bosnia.
Yet the agreements covering countries like Albania – who want to join the EU not leave it – only give partial access to goods and little access to services which account for the lion’s share of the UK economy. They also, like the EEA agreement covering Norway, leave those outside the EU as “rule takers not rule makers”. In fact, the Albanian model is such a poor alternative for the UK that it has been rejected even by the prime Minister of Albania, Edi Rama. His verdict was: “The Albanian-EU relationship is not a model for Britain to emulate. Take it from us. We live here.”
Gove’s arguments did not settle the issue within the Leave campaign. He was contradicted by another leading Leave campaigner, Daniel Hannan MEP, who advocated remaining part of the European Free Trade Area which he acknowledged would mean acceptance of its rules including free movement. This failure to be clear about what being out would mean has dogged the Leave campaign from the beginning. Caught between wishing to reassure voters about continued market access to the EU and wanting to appeal to anti-immigration sentiment which means placing the UK outside the single market, they have been unable to settle on an agreed version of out. The voters are being asked to endorse a move to withdraw from the EU without its leading advocates being able to agree on what that move would mean for the UK.
The Brexit campaign has, in effect, given up on arguing that Britain would be economically better off outside the EU
On the economics, study after study from the CBI, the IMF, the Treasury, the OECD and the Institute for Fiscal Studies all conclude there is an economic price of withdrawal from the EU. Reports cost this variously as between £20bn and £40bn extra in borrowing (IFS), or £4,300 per household (Treasury) or “Brexit tax” of a month’s pay (OECD). No serious international study has said Britain would be better off with Brexit. Brexiteers have responded by dismissing the economic reports as the work of self-interested elites. The message keeps coming and each time the messenger is shot. The weight of economic evidence is unlikely to diminish as the campaign continues. The Brexit campaign has, in effect, given up on arguing that Britain would be economically better off outside the EU.
On a broader geopolitical level, the vision of an Atlanticist alternative renewing friendships with old friends in the Commonwealth has been rejected by the very people it is aimed at.
Justin Trudeau, prime minister of Canada, said: “The EU is a unique partner for Canada, and Canada has a direct stake in a strong and united EU.” Julie Bishop, Australia’s Foreign Minister argued: “A strong UK as part of the European Union would be in Australia’s interests.” New Zealand’s prime minister, John Key, suggested: “If we had the equivalent of Europe on our doorstep, we certainly wouldn’t be looking to leave it…We certainly think it’s a stronger position for Britain to be in Europe.”
But the most telling intervention was President Obama’s. Citing the shared sacrifice of the United States and Europe in fighting two world wars he shattered the illusion that there was an Atlanticist alternative for the UK outside the EU.
The European Union doesn’t moderate British influence – it magnifies it. A strong Europe is not a threat to Britain’s global leadership; it enhances Britain’s global leadership. The United States sees how your powerful voice in Europe ensures that Europe takes a strong stance in the world, and keeps the EU open, outward looking, and closely linked to its allies on the other side of the Atlantic. So the US and the world need your outsized influence to continue – including within Europe.
Obama rejected the notion that the UK’s post war or even 21st century destiny lay in the choice between an Atlanticist or global role and a European one. He too believed in the networked state as the multiplier of power and signed up to “that greater sovereignty”.
For those arguing for Britain to remain the case has been mainly economic, and part geopolitical and security. Pro-Europeans point to the growth in Britain’s prosperity since joining the EU. They point to the fact that over 40 per cent of our exports go to the EU and membership increases Britain’s attractiveness for inward investors from both inside and outside the EU. As with the geopolitical choice, they reject the idea that Britain faced a choice between trading with Europe or trading with the world – why can’t we do both? And they point to the weight of economic evidence piling up on their side of the argument from study after study, survey after survey.
Beyond economics, pro-Europeans argue this is a matter of values as well as interests. The EU was born out of the ashes of war and, whatever its failings might be, it is inconceivable that any two member states could go to war with one another – no small achievement given European history. They point out that Russian aggression in Ukraine was met by united EU sanctions. They argue that neither Europe nor its allies would benefit from the fragmentation of the west.
But for all the power of the case to remain, and the weakness and unanswered questions about the alternative outside the EU, a substantial proportion of the population remain disaffected by the argument that openness and leveraging power through EU membership and wider global engagement is in Britain’s interests.
This is the leadership challenge for modern politics, and specifically for the centre left which has struggled to articulate a convincing economic story since the financial crisis. The exercise of good leadership on Britain’s future requires far more than winning the argument about EU membership, vital though that choice is. Those on the centre left who reject the nationalism and nostalgia that characterises the case for Brexit are still left with the urgent question of how to build an economy and society where all feel included, particularly when public spending is likely to be tighter than in the past for some years to come. That task will remain long after 23 June. This is because the questions facing politics are about far more than membership of supranational organisations. At its core, the leadership question is how do you equip people for change and maximise their opportunities in globalised economies where rewards are stretched and many people feel left behind?
Those on the centre left who reject the nationalism and nostalgia that characterises the case for Brexit are still left with the urgent question of how to build an economy and society where all feel included
Answering this question in a convincing way is vital because there is no rewind button to a country and a world that is not coming back. Greater movement of people, either inside or outside the EU, is a fact of the modern world. Every society is likely to be more diverse in future than it has been in the past.
So what should be the rules under which this greater movement of people takes place? What are the rules of citizenship? On what basis should people have access to public goods and benefits? How do we agree what we value in terms of pluralism, co-existence and equality and how do we promote these values? And what of the impact of technological change on employment?
These trends call for an inclusive economics in which all have a stake. An inclusive economics has to think about rewards and fairness in such a way to give people a stake in the economy in which they work. It has to be confident about the state’s role in industrial policy and about working with markets to enhance advantage and capacity. It has to think more radically than before about education reform to ensure parts of our population are not simply left behind by low expectations or lack of chances and disenfranchised from the future. The answer to disaffection should not be to pull up the drawbridge and opt out of the networks where your country can wield influence and increase its power. The nationalist Brexit response will not create jobs. It will destroy them. It will not make us more prosperous – even some of its advocates admit that. It will not educate or train a single extra person or equip them for change. Saying no to the world does not create opportunity for your citizens.
However, the alternative to Brexit cannot be to ignore the discontent with globalization and think the argument ends with a renewed commitment to membership of the EU if that is the referendum result. The discontent will be there whatever the result of the referendum. Even if the country reaffirms its postwar choice to remain a member of the EU, the task of shaping a future in which all parts of the country and all sections of the population feel they have a stake will remain.
Politics has to offer more than a choice between austerity and retreat from the world. The centre left must rediscover the ambition to shape the country anew that fired our victories in the past. Every time we have won – and in our history it has not been enough – it has been on the basis of a hopeful uplifting picture of what Britain could become. Our founding purpose was to transcend class differences and shape a world where the talents of all could be fulfilled. We can neither be satisfied nor exercise good leadership if millions of people feel left out of our national story.
So as this battle for Britain’s future is played out it is important that the referendum is not seen as the end point. Instead it should be a staging post for a second phase of globalisation that offers hope to those who feel disenfranchised from the changes of recent years and a sense of purpose to every part of the country. It is to the task of how that can be achieved that centre left leadership should turn.
Pat McFadden is MP for Wolverhampton South East. He is a former minister of state at the Department for Business Innovation and Skills and shadow minister for Europe