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Why have some UK intellectuals welcomed Brexit?

"Some see Brexit as a victory for populists who misled the working classes and the less well-off in society into voting against their own interests. But that is a partisan analysis. It would be wrong to conclude that there were no rational arguments to be made for Brexit. Here Derrick analyses some of them."
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Some see Brexit as a victory for populists who misled the working classes and the less well-off in society into voting against their own interests. But that is a partisan analysis. It is true that in the Brexit referendum most academics, university graduates and university students in the UK voted to remain, with perhaps 68% of graduates and 90% of academics in UK universities voting in this way. But the political opinion of each voter has equal weight, irrespective of his or her qualifications. And millions of graduates and tens of thousands of academics did indeed vote to leave. It would be wrong to conclude that there were no rational arguments to be made for Brexit, and that no intellectuals accepted and advanced such arguments. In this article for Fide I examine the arguments for Brexit made by two such intellectuals. I confess to having voted to remain, and readers must judge for themselves the fairness of my treatment of their views.

Professor Emeritus Robert Tombs

One advocate of Brexit who undoubtedly qualifies for description as an “intellectual” is Robert Tombs, Professor Emeritus of French History at the University of Cambridge,[i] who published a book on his views on Brexit in January this year, entitled This Sovereign Isle.[ii] Professor Tombs is, broadly speaking, a critic of the EU and of the euro, and he voted for to leave in the referendum. His key criticisms are the failure of democracy in the EU system, and the unfair and adverse impact of the euro on some Member States. He argues that Brexit was essential to allow the UK to regain its freedom to make its own laws.

Economist Dr Andrew Lilico

Another intellectual who advocated and continues to champion Brexit is Andrew Lilico, a professional economist and one of Europe’s leading experts on the impact of financial regulation on business.[iii] Dr Lilico has written articles and given interviews on the case for Brexit on numerous occasions over the last ten years.[iv] In one sense he is not actually a critic of the EU, and his criticism of the euro has been criticism of the way it has been managed. He thinks the UK has in the past benefited enormously from EU membership, and that the UK has influenced for the better the evolution of the EU. But he thinks that the days of mutual advantage are over, that continued UK membership of the EU would benefit neither the EU or the UK, and that the time had come for a parting of the ways.

Tombs’ book – Brexit will not be an economic “disaster”

My account of Professor Tombs’ views is derived from his recent book. He did not always hold a strong conviction that UK membership of the EU[v] was a mistake. He only took the decision to vote to leave when he was assured by an academic colleague who was a Nobel laureate economist that Brexit would not be a “disaster” for the UK economy, though it would require some “adjustment” on the UK’s part. Tombs felt it important to vote leave in 2016 because he believed it might be the only chance he ever got to do so.

“Decent populism” versus a patronising elite

The narrative of many advocating Brexit is described by Tombs as a form of “decent populism”, which focused on democracy and national sovereignty, which was seen as being under attack from self-interested and even treacherous elites – politicians, judges, and lobbies. He argues that the Remainer narrative assumed that voting for Brexit was irrational and xenophobic, and attributes this in part to the snobbery of better off and the better educated Britons towards the working classes and to less well-off people in the UK. He describes an acquaintance at a dinner party saying that in order to understand the Brexit case she had asked her gardener and cleaner.

The EU has fostered emerging democracies but failed to respect democracy in its own procedures

Tombs gives credit to the EU for buttressing democracy and the rule of law in Spain, Portugal and Greece, and in newly independent Eastern Europe. But he argues that now the biggest problems stem from the EU itself. It has, he says “created a political void between citizens and those who govern them: powers of decision have been removed from open electoral politics and placed in the shadowy realm of secret diplomacy.” In common with other UK intellectuals who favoured Brexit, and perhaps with some others who did not, Tombs accuses the EU of side-stepping democracy, by pressurising Ireland on more than one occasion to reverse referendum votes rejecting further EU integration, and by overcoming referendum results in France and the Netherlands which rejected the proposed EU Constitution, only to re-introduce that Constitution as the Lisbon Treaty, which was ratified in both the Netherlands and France without a further referendum.

I would venture to add the postscript that nationals of EU Member States currently take a fairly favourable view of the state of democracy in the EU. In the latest Eurobarometer poll (July/August 2020), 53% of Europeans say they are satisfied with the way that democracy works in the EU (against 43% who say they are not). I would add that 70% across the EU feel that they are citizens of the EU, and that 60% are optimistic about the future of the EU.

Lilico praises the EU for confronting the Warsaw Pact and backing new democracies in Europe

Dr Lilico is also enthusiastic about the EU’s support for the fledgling democracies in Greece, Spain and Portugal. He gives full credit to the EU for uniting Western Europe against the Warsaw Pact, and for welcoming the newly democratic former communist states into the EU. He sees these achievements as geopolitical advantages benefiting the UK as well as the countries directly involved.

Tombs is a critic of the euro and EU/German bullying of Greece in the debt crisis

In common with other Brexit-favouring commentators Tombs is a critic of the euro, and insists that it has favoured some Member States, particularly Germany, and damaged the economies of other Member States (Greece most of all). This was because some economically relatively weak Member States entered the euro at too high a conversion rate, while some economically relatively strong Member States – notably Germany – entered the euro at too low a conversion rate. Tombs argues that the EU/Germany bullied Greece during the Greek debt crisis, despite the Greek people voting in a referendum in 2015 to refuse to accept EU conditions for a Greek bailout. Tombs’ account casts Germany as the main villain of the piece.

Tombs fails to mention that Greece was offered an exit from the euro in 2015

When it became clear that a Greek exit from the euro would not imperil the euro’s stability, the German finance ministry informally prepared a plan for Greek debt reduction in exchange for a Greek exit from the euro. The Greek Government rejected this and instead opted for the creditors’ tough terms, so the plan never got beyond the drawing board. In my view the Greek Government’s action almost certainly reflected the state of public opinion in Greece at the time, however irrational and contrary to Greek interests that action might seem to have been.

Lilico criticises the EU’s failure to manage the euro so that it could function properly

For Lilico too, the euro has been “an economic and political catastrophe” for some European countries, in particular Spain and Greece, where euro membership has led to much higher levels of unemployment than would otherwise be the case. Lilico, however, does not blame the euro per se -rather he blames the failure of the EU to develop sufficiently the mechanisms needed to allow the euro to function properly.  “You need eurozone taxes,” says Lilico. “You need fiscal transfers. That means regional subsidies, benefits payments, tax breaks to allow individuals to keep going in tough times.”

The UK is part of the reason the EU has not been able to manage the euro properly

So where does the UK fit into all this? “The reason [fiscal union] hasn’t happened”, says Lilico, “is the eurozone is connected to a set of non-eurozone countries. Of these countries, all but two — the UK and Denmark — have a commitment to join the euro in the end.” Lilico thinks that once the UK is out of the EU, pressure will increase on the few remaining non-euro EU Member States to join the euro. “Then the eurozone can take full control of the EU’s institutions and be able to function properly to make it work as a currency union.” This part of Lilico’s analysis amounts to this: the euro cannot function properly as long as the UK is an EU Member States. Brexit will be a huge advantage to the EU because it will allow the euro to realise its full potential.

Tombs and Lilico say the euro has made the UK’s semi-detached position less tenable and reduced UK influence in EU decision-making

The inter-play between the economic and the political in the evolution of the EU is explained by Professor Tombs in a way with which few would quarrel. He argues that the economic development of the EU was both a framework and at times a mask for the “ever-closer” political union which had always been the goal of European integration. Tombs acknowledges that the UK had secured a special place within the EU with, in particular, an opt-out from the euro. So why leave? “One reason”, says Tombs, “is that the EU itself was changing, trying to move towards the greater centralization that supporters believed essential to its survival. This made Britain’s semi-detached position less tenable, while only a tiny minority of its citizens wanted ‘more Europe’.”

Lilico too flagged up looming difficulties for the UK as the management of the euro increasingly absorbed the political attention of the majority of Member States. He saw deeper political integration within the euro area leading to the euro countries voting as a bloc and thereby setting policy for the EU as a whole, i.e., for both euro and non-euro members, since the Euro Group could command a qualified majority in the Council. This could lead, in Lilico’s view, to the UK’s position increasingly resembling that of non-EU Member State Norway, which must abide by Single Market rules, without having any voting influence over those rules.

My comments on the UK’s declining influence in an EU dominated by eurozone countries

I agree that Lilico has a point about the Euro Group defining positions outside the Council in a way which could limit UK influence, and these risks were regarded as imminent risks by some UK politicians who supported EU membership. UK Prime Minister David Cameron’s pre-referendum “renegotiation” of the UK’s EU membership in 2015 attempted to address these risks. This problem could always in theory have been “solved” by the UK joining the euro, but the UK had a permanent opt-out from the euro, and it has long been clear that the UK would never join the euro.

The goal of European political integration has always been underplayed by UK politicians supporting the UK’s membership of the EU. They have either stressed the purely economic advantages of EU Membership, or argued that the EU had allowed the UK to carve out for itself, by a series of opt-outs, a non-federal future in an increasingly federal EU. These opt-outs exempted the UK from a commitment to join the euro, from the Schengen Agreement’s “borderless” Europe policy, and from the EU’s Asylum and Immigration Policy, which has caused such tensions in some Member States. The UK also enjoyed an opt-out from the EU “Social Chapter” introduced by the Maastricht Treaty, until UK Prime Minister Tony Blair reversed that opt-out in 1997. The UK’s EU Membership was for the most part defended to UK audiences as a form of Membership “a la carte”, or as a Membership which reflected the fact that the UK was somehow “special”. Neither of these ideas played at all well with the UK’s EU partners. They offered instead the concept of a “multi-speed” Europe, which satisfied the UK to the extent that it recognised “differentiated integration.”  The problem was that implicit in the multi-speed concept was the idea everybody would catch up in the end. “Ever-closer Union” pointed in precisely this direction. Hence David Cameron’s determination to exempt the UK from the goal of “ever-closer union” in his pre-referendum negotiations with the EU.

The years leading up to the 2016 referendum

Professor Tombs gives a good account of the years leading up to the 2016 referendum on Brexit. He is right that the image of the EU in the eyes of the UK public was badly dented by the Eurozone crisis. He is also right that numerous opinion polls confirmed that “people in Britain were not committed, emotionally or intellectually, to the ‘European project’”. He is also right to downplay Prime Minister David Cameron’s attempt to negotiate EU reform in the run-up to the referendum, and probably right to attribute Cameron’s failure to the latter’s weakness as a negotiator and the UK’s lack of bargaining power.

Leave voters included most of the working classes and the less privileged

The clearest divide between Leavers and Remainers, according to Tombs, was socio-economic, with the working classes and the less privileged being strongly represented on the leave side. Interestingly, he denies that the UK was destined to leave the EU because its aim of “ever closer union” was incompatible with the UK’s history and political evolution. He notes that in 2016 the UK voted to leave by only a small majority, and that a succession of opinion polls over three successive years showed that the country was almost equally split. “So,” he declares, “if European integration was indeed incompatible with our history, nearly half of us failed to realise it.” He notes that half of those voting for Brexit said their main reason had been the principle that decisions taken about the UK should be taken in the UK, and sees behind this is an emotional attachment to national sovereignty.

Tombs adamant that to “pool” sovereignty is to lose sovereignty

Tombs himself rejects the doctrine of “shared” or “pooled” sovereignty as either a valid description or justification of the EU’s role in decision-making vis-à-vis its Member States. He thinks that “certain powers may be delegated for a time to others, but sovereignty, the ultimate right to decide…can be given up, but not shared.” He thinks that perhaps all EU Member States have given up their sovereignty and says that when President Macron of France frequently talks of a “sovereign Europe”, he “may be right”.

Tombs denies the UK ever gained economically from its EU membership

Professor Tombs takes the general line that from an economic point of view the UK did not need to join the EEC in 1973, and that joining it provided no economic advantages for the UK. He insists that “there is no evidence that membership of the successive European Communities has done anything at all to stimulate the UK’s economic growth.”

 

 

Lilico thinks the UK has gained from EU membership

Economist Lilico believes “that, for many years, Britain did quite well out of being in the EU”. He sees the EU as having provided a supportive framework for UK economic policies, and the UK as having had a major and positive influence on the development of EU policies. He notes that “along the way Britain converted our European partners to a regulatory and economic philosophy that was aligned with ours. The EU embeds a very British, pro-market-oriented economic philosophy based on privatization, market liberalization, free trade, opposition to state aid, and opposition to protectionism.”

But Lilico insists that those gains are in the past and will not be repeated

Lilico thinks it highly significant that the UK’s trade with the rest of the world has been rising faster than its trade with the EU for a number of years. “The EU takes a declining share of U.K. exports — down from around 55 percent in 2002 to just 45 percent by 2014. As the rest of the world economy continues to grow faster than the EU over the next 10-15 years, this share will fall further, reaching only perhaps 35-40 percent.” The answer to this problem according to Lilico was for the UK to leave the EU and make its own trade deals with countries around the world. He noted in 2016 that “At present, the EU has responsibility for the UK’s non-EU deals, but negotiations are painfully slow.”

Lilico says Brexit offers the UK the chance to find new economic and political partners around the world

Dr Lilico considers that Brexit gives the UK the opportunity both to have an independent trade policy and to use that ability to strike up new geopolitical relationships. Such relationships would not necessarily be with countries with which the UK did most trade. He asks the rhetorical question “What medium-sized countries might there be, beyond the EU, with whom we could form an EU-style partnership that we might have more in common with, constitutionally, legally, in terms of political culture, and in terms of GDP per capital?” His answer is Canada, Australia and New Zealand. The idea (usually given the acronym CANZUK) is not a new one, and envisages a trade and defence relationship between these three countries and the UK, coupled with an agreement on the free movement of people.

Tombs is unconvincing when describing aspects of the single market, such as trade in services, motor vehicles, and agricultural products

Professor Tombs reminds us at the outset that his work is a history, and he is too modest, because it is much more than that. But in his dealings with EU trading rules and their implications for the UK, his handling of his subject matter is sometimes questionable. He says that the single market applies mostly to agricultural and manufactured goods, but not to services. I have to be blunt here and say that this is about as wrong a statement about the EU single market as it is possible for anybody to make. In fact, EU single market provisions on trade in services are liberal and comprehensive, probably the most liberal and comprehensive to be found in any trade agreement in the world, not least in respect of financial services (not to mention legal services, accountancy services, etc., and so forth). The “passporting” of UK banks and insurance companies doing business in the EU was a huge advantage to them (and indirectly to the UK Treasury and taxpayer) prior to Brexit, and their loss of passporting in 2021 was a serious (if admittedly not disastrous) blow. The replacement, as far as the UK is concerned, of the EU’s liberal and comprehensive provisions on cross-border trade in services by their relatively feeble counterparts in the EU-UK Trade and Cooperation Agreement, had led by the end of February 2021 to the migration of 1.5 trillion euros worth of assets from London to financial centres in the EU.[vi]

Another questionable proposition advanced by Professor Tombs is that EU membership damaged the UK because it had to pay high EU tariffs on cars imported from outside the EU. He omits to mention that the EU has made numerous free trade agreements with countries around the world which eliminated tariffs on imports, including imports of cars, for all EU members, including the UK. In 2019 the UK imported more cars from Japan than from France, and more cars from South Korea and Turkey than from Italy. The EU’s “high” tariff of 10% on imported cars has been retained by the UK post-Brexit for trade with countries which do not have a free trade agreement with the UK. That makes sense for the UK standing alone, just as it made sense for the EU and the UK when they stood together.

Tombs is on stronger ground when he says that high EU tariffs on imported food have increased costs for consumers and favoured imports from EU countries. But there is another side to this, which he does not explain. EU policy on food imports from outside the EU has been designed to ensure a future for EU farmers. This policy has benefited British farmers and boosted UK home production of food from around 30% prior to EU membership to 60+% in 2018. In addition, the EU has agreed duty-free access for agricultural products under trade agreements it has made with countries around the world, such as Korea and Canada. The UK has decided to retain post-Brexit EU tariff levels on agricultural products in trade with countries with which it does not have a trade agreement, in order to continue protection for British farmers.

Tombs and Lilico deny long-term damage to the UK resulting from Brexit and see clear advantages

Tombs does not accept that the UK has benefited economically from Brexit, though he accepts that leaving the EU will result in an economic “adjustment” that he has been assured will be less than disastrous. He thinks that the medium-term economic effects of Brexit for the UK are likely to be small, and the long-term effects depend largely on the policies followed by post-Brexit governments. He thinks that in the referendum most Leavers sensed that Brexit was a political decision rather than an economic decision. The main benefit he sees resulting from Brexit is not economic, but the UK escaping the constraints on its decision-making imposed by EU membership. He values this most of all for the positive impact it will have on democracy in the UK.

Dr Lilico always accepted there would be a short-term economic hit from Brexit. The costs would rise before the benefits, so the UK’s GDP growth would fall, but he expects costs and benefits to cancel each other out by around 2030. He thinks UK GDP in 2030, post-Brexit, will be within 2 percent (plus or minus) of its level if the UK had remained in the EU. He sees the main benefits for the UK resulting from Brexit as escaping from an EU in which the UK has a diminishing influence as a result of its absence from the Euro Group and as being empowered to develop economic and political links with countries outside the EU, where most of the UK’s trading interests already lie and will increasingly lie in the future.

 

Derrick Wyatt QC, Emeritus Professor of Law, Oxford University, Member of the International Academic Council of Fide

[i] https://www.hist.cam.ac.uk/people/robert-tombs

[ii] THIS SOVEREIGN ISLE Britain In and Out of Europe Allen Lane, UK, 2021.

[iii] https://www.theguardian.com/profile/andrew-lilico

[iv] See for example https://www.vox.com/2016/6/21/11974600/brexit-eu-euro-disasterI

https://www.politico.eu/article/making-the-economic-case-for-brexit

https://www.canzuk.co.uk/single-post/2016/09/26/Yes-we-Canzuk-A-post-Brexit-possibility

[v] For the most part I use “EU” to cover the Union in its various stages of evolution, from the EEC to the EU, via the EC.

[vi] See, for example https://londonlovesbusiness.com/brexit-migration-of-uk-assets-to-europe-reaches-almost-1-3trn/

 

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