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Looking Beyond the Brexit

The question of the UK’s relations with the European project is one that has vexed British politics since the 1950s, without ever arriving at a definite conclusion. This is because the underlying or basic question has never been put and the debate in the UK has been largely conducted around a partial and limited understanding of what the nature of the European project actually is. However, events are now moving in a direction that means this time obfuscation and avoiding choices will be over. Soon a decision will be made once and for all – regardless of the precise actions of the political class.

The authors of the European project, from Monnet onwards, have always been admirably clear about the nature of their endeavour. The nature and goal of the project has been explicitly spelt out in a series of treaties, from the Messina conference onwards, although obviously the details have changed over time. It is broadly a political economy mission, aiming at creating greater unity and integration throughout Europe in politics, economics, and social or cultural life. There is a debate over the precise form that this should take (e.g. over whether the economic integration should be largely market based or more dirigiste) but this is secondary.

British politicians however have either refused to acknowledge this or have obfuscated it, preferring to present all of the major developments and the original idea in terms of economics narrowly defined, even when, as in the case of the euro, this was clearly not the case. This has involved claims that Continental politicians do not really mean what they say and that their reiterations of the goal of a more united and integrated Europe are window dressing or mere rhetoric. This comes close to saying that there is an element of bad faith or pretense involved and not surprisingly the Continentals find this both infuriating and insulting.

Consequently, for several decades now the UK has participated in the European project for broadly economic and geopolitical reasons, without being engaged or committed to the central aspect of that project. Nevertheless, the political economy of the UK and almost every aspect of public policy has been shaped and formed by thisat a profound and basic level. To change course and leave the project would require rethinking every aspect of the political economy of the UK, from the structure and nature of governance to the details of every area of policy.

It will not be possible to avoid confronting this for much longer. The creation of the euro, in the teeth of advice from economists of all persuasions that the eurozone countries were not an optimal currency area unless they had a single political order, has finally brought matters to a head. Although the prospect of an immediate and disorderly collapse of the single currency has receded, it is clear that it is not viable in the medium term unless there is a significant move towards closer political end fiscal integration, amounting to the creation of a true European government. In that context there will be no place for countries that are half-hearted or foot dragging because that would run the risk of derailing the process. It will be a case of “Are you with us or not?” for several countries, including the UK.

What this means is that the prospect of a British exit from the European Union (Brexit for short) is a very real one. It may be that the public will vote to leave in a referendum or even that the political class will finally baulk at the implications of continuing to be a part of the project. Even if neither of these things happen the UK may be ‘asked to leave’ if it cannot wholeheartedly commit to what saving the euro will involve for all member states, regardless of whether they have the single currency or not (other states such as Sweden, Ireland, Finland, and the Czech Republic may well be in the same position). In any event the British will be forced to confront the actual options before us and make a definitive choice.

This means that the choice will have to be made in a way that it has not been approached so far, on the basis of full information about and understanding of the nature of the choice and the available options. Given that either continuing to be a member of the EU or leaving it will have huge implications for the political economy of the UK we need to have a fully informed national discussion, so as not to stumble into decisions or arrive at a position by accident or in ‘a fit of absence of mind’. In particular there needs to be a clear understanding of what Brexit would involve and what the challenges and opportunities would be for public policy in such an eventuality. This is true regardless of whether you individually think a British exit would be a good thing or a bad thing. In either case there has to be a clear idea of what is involved in either going fullheartedly into the European project or calling it a day and leaving it. It is however more important to have a reasonably clear idea of what the options for policy might be in the event of Brexit and some idea of what the desirable and practical course of policy would be because this is the relatively unknown alternative. This is particularly true in the event of a referendum where knowing what the alternatives are to the status quo (which is itself rapidly and radically changing) is particularly important.

It is with this in mind that the IEA has launched the Brexit Prize competition, calling for entrants to consider what strategy and policy a UK government should following the event of a vote to leave the EU in a referendum. Several hundred initial entries of up to 2,000 words each were narrowed down to seventeen who have now been invited to submit a full paper of between 10,000 and 20,000 words for final judging. The entries are not concerned with the question of why the UK might leave the EU, or whether this is desirable or not, nor primarily with questions of technical and legal detail about the mechanism for leaving but rather about the range of policy options and overall political economy orientation open to a UK government in such an instance. For example should the UK look to emulate Norway or Switzerland or are these options unnecessary as opposed to a reversion to the classic British policy of openness and radical free trade? Alternatively, should the UK go for a national development strategy with an active and central role for government or should it follow a much more market centred stategy? What place should the financial services sector play – should it be the core of the economy or would a process of ‘rebalancing’ be part of Brexit? Should we look to reorient the UK towards the ‘Anglosphere’ or revive links with the Commonwealth, or try to develop connections with the emerging economic powers such as Brazil, India and China? What would be the options in areas such as trade policy, welfare, and energy policy, all of which have been profoundly shaped by membership?

These are the kinds of questions that need to be thought about and explored, regardless of whether one supports or opposes leaving the EU. If they are not then the debate when it happens will be ill informed and dominated by fears and speculations rather than informed comment. The Brexit competition is in a small way a start to a conversation we all need to have.

 

You can find out more about the Brexit Prize here

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About Stephen Davis (1 Articles)
Dr Stephen Davis is the Education Director for the Institute of Economic Affairs.

1 Comment on Looking Beyond the Brexit

  1. Smithersjones2013 // November 28, 2013 at 10:33 pm //

    Given withdrawal from the EU (and presumably the associated judicial structure) would have a major impact on the role of the Judiciary, the Government and its relationship with the electorate in this country, its clear the provision of a Bill Of Rights, a formal constitution for this country recognising the role and duties of the monarchy and setting out the scope, role and duties of all levels of government, the judiciary and so forth as well as the rights of individual citizens would be paramount.

    Now this must come before other considerations such as the economy because in many ways it will be depend on how Government is structured (e.g. centralised vs devolved) as to how the economy should be approached.

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