Opinion

Hugo Dixon

Labour has just shrunk Brexit risks

By Hugo Dixon
March 12, 2014

The risks of a Brexit have just shrunk a lot. Ed Miliband, the UK’s leader of the opposition, has virtually ruled out a referendum on Britain’s European Union membership if he becomes prime minister in 2015. David Cameron’s Conservatives will need to win an overall majority in the next general election and then lose an In/Out vote to allow the UK to quit before 2020.

This is good news for business: a plebiscite, coming after a populist campaign, might easily produce the “wrong” result. An Out vote would put Britain at risk of losing full access to the EU’s single market, with which it conducts almost half its trade. It would also unleash a long period of uncertainty. Whoever is prime minister then will have to resign, likely to be replaced by a staunch eurosceptic who will then engage in acrimonious divorce talks with the rest of the EU. In the meantime, business would sit on its hands, and the economy suffer.

Meanwhile, Miliband’s priorities for reforming the EU – boosting competitiveness, tackling youth unemployment, completing the single market and decentralising power – are broadly pro-business.

Labour’s move is also good for democracy. Holding referendums is only democratic when a big constitutional change is under discussion or when the people demand one. These conditions are currently not met on the topic of Britain’s EU membership.

While it is true that most of the electorate says it would like a referendum, Britain’s EU membership is low on their list of priorities. Meanwhile, there are no plans for a major treaty change that would alter Britain’s relationship with Brussels.

Miliband is, therefore, right to describe Cameron’s pledge of a 2017 date for a referendum as “arbitrary.”  It was dreamed up last year in the hope of silencing his own eurosceptic backbenchers and stemming the drift of votes to the UK Independence Party (UKIP), which wants to quit the EU – a ploy that hasn’t worked.

Instead, Miliband is promising a referendum on Britain’s EU membership only if there is a transfer of power from London to Brussels. But he also argued, correctly, that this is unlikely during the next parliament, whose term will run from 2015 to 2020. There isn’t huge appetite across the Channel for treaty changes that will further centralise power.

By contrast, a plebiscite on Cameron’s timetable could be a mockery of democracy, as little or nothing has changed in the UK’s relationship with the EU. The shape of the euro zone might also still be up in the air. So the voters could end up taking a momentous decision in a vacuum.

Miliband’s decision to virtually rule out a referendum before 2020 also makes sense from his own partisan perspective. Had he matched Cameron’s promise, the voters might have voted Out in 2017. Miliband might have ended up as a two-year prime minister whose entire term in office was taken up with European squabbles.

The Tories will, of course, hope to win votes from Labour by arguing that it is denying the voters a choice. But such a strategy could backfire if the electorate thinks the Conservatives are obsessed with an issue that isn’t their priority. What’s more, those voters who are really keen on quitting the EU may well vote for the real thing, UKIP, rather than its imitation.

Meanwhile, Labour is now aligned on the question of an In/Out vote with the Liberal Democrats, Cameron’s coalition partners. For Cameron to push through his referendum plans, he will have to win an overall majority at the next election.

At the moment, Labour has a slim lead in the opinion polls. The gap might close as next year’s election approaches, since the UK economy is recovering. But even if the Tories gain the most votes, they may not win the most seats given that the electoral system favours Labour. And even if they win the most seats, it would be surprising if they won an overall majority.

Brexit isn’t totally off the table. Quite apart from the possibility of a clean win for Cameron in 2015 followed by the loss of a referendum, two other scenarios would see Britain quit the EU.

First, if Scotland votes to leave the UK in its referendum in September, it would lose its MPs in a couple of years’ time. Given that Labour has 41 MPs north of the border while the Tories have only one, a Scottish Out vote would have knock-on effects in Westminster: even if Miliband won the 2015 election, he might be kicked out of office soon after.

In such a scenario, an incoming Tory prime minister might well be more eurosceptic than Cameron and might press ahead with an In/Out referendum on the EU. There would be a double blow because the Scots, who tend to be pro-EU, wouldn’t take part in that vote.

Second, even if there is no In/Out EU referendum before 2020, the issue won’t go away. When and if the Conservatives get back into power, they will probably put it back on the table. That said, for the time being, the risks of Brexit have fallen.

Comments
6 comments so far | RSS Comments RSS

“Holding referendums is only democratic when a big constitutional change is under discussion or when the people demand one.”

Huh? A referendum seems like a pure expression of democracy in its original Athenian sense of government conducted through direct voting by an assembly of all of the people.

Perhaps what is meant is that a referendum may not be republican, in the original Roman sense of government conducted indirectly by the people, through their elected representatives.

Isn’t a referendum the ultimate in retail democracy? And aren’t the decisions made by political partisans engaged in wholesale democracy, catering to a narrow group of people whose financial and institutional support is necessary for the survival of the career politician? The average person (the average member of the demos, which rules in a democracy) probably has no way of discovering the identities of the people whose financial and institutional support is necessary for the survival of the career politician.

Posted by Bob9999 | Report as abusive
 

Nooooooo ! We do nt want to endure another 10 years of English sabotage. If there is no referendum in what will be left of the UK, then we MUST arrange a referendum on the Continent to kick England out anyway.

Posted by phoen2011 | Report as abusive
 

We, the British people, never voted to join the EU in its current state- a fiscal and political union where important laws regarding our country are made by unelected beaurocrats in Brussels. We voted to join a common market, nothing else. So every day that passes without a referendum is bad for democracy. I am 23, and many of my young friends feel the same. Suggesting the referendum the British people want and deserve shouldn’t happen is boarderline fascism.

Posted by thomaslopez | Report as abusive
 

We, the British people, never voted to join the EU in its current state- a fiscal and political union where important laws regarding our country are made by unelected beaurocrats in Brussels. We voted to join a common market, nothing else. So every day that passes without a referendum is bad for democracy. I am 23, and many of my young friends feel the same. Suggesting the referendum the British people want and deserve shouldn’t happen is boarderline fascism.

Posted by thomaslopez | Report as abusive
 

Quote “An Out vote would put Britain at risk of losing full access to the EU’s single market, with which it conducts almost half its trade”

Isn’t this complete nonsense? From what I hear, around 80% of Britain’s trade is internal; even external trade, most of it is not with Europe, though quite a lot of it passes through the port of Rotterdam on its way elsewhere.

We also import rather more from Europe than we export to it, so it’s very unlikely that the EU would want to impose punitive restrictions, because they’d be hitting their own exports!

Posted by TocoToucan | Report as abusive
 

phoen2011 : ‘ We do nt[sp] want to endure another 10 years of English sabotage’

Yes, because if there was no UK in the EU, the crisis in the eurozone would simply vanish.
Honestly, European economic stupidity and petty sneering is out of control.

Posted by James_L | Report as abusive
 

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