“Economically, the effects are still being felt. Britain, after all, has voted to leave the world’s biggest trade bloc. The pound fell to a 31-year low against the US dollar and there is growing uncertainty about the future relationship between Britain and the EU’s internal market. The reasons behind the decision to leave are varied and complex. Clearly, sovereignty played a role with English voters in particular keen to claw back many of the powers London has handed to Brussels over the last 43 years of membership.”
The result was a political earthquake and the aftershocks are still being felt. Britain’s decision to leave the European Union after 43 years of membership took many by surprise but for those of us who have studied closely that relationship, the outcome was somewhat inevitable. This article seeks to not only historicise the referendum result but also, and perhaps more importantly, to explore the road ahead for the United Kingdom as it seeks to navigate a new path outside the world’s largest trade bloc. The key questions that are focused on here include: Why did Britain vote to leave? What now for domestic British politics and the future of the UK? What kind of new relationship is likely to emerge between London and the remaining 27 EU member states? And what impact, if any, will the decision have on Britain’s global role and ambitions?
More than any other European country, Britain has had the most turbulent relationship with the process of European integration that emerged after the Second World War. Even though Winston Churchill, as leader of the opposition, argued for a ‘United States of Europe’ in his oft-quoted University of Zurich speech in 1946, there was very little appetite within the British government to be part of that process. Britain, at the end of the war, still maintained a sizeable empire, albeit one that was crumbling and it identified itself as part of the winning side. Simply handing over sovereignty from the British parliament to some unelected supranational institution on the Continent was never politically fashionable.
As France and West Germany moved closer and closer towards reconciliation in the form of the European Coal and Steel Community in 1950 and later the European Economic Community in 1957, the predecessor to today’s European Union, Britain remained out the outside looking in. It was not until Harold Macmillan, Conservative Prime Minister finally accepted in his 1960 ‘Wind Of Change’ speech in South Africa that the British government had finally accepted that the days of empire were over and a new world role was needed. By then, London had a permanent seat on the UN Security Council. Yet, it was John F. Kennedy, US President and close ally of Macmillan, who encouraged the prime minister to move closer to the Europeans. Kennedy and others in his Administration were not enamoured at the prospect of a French-led EEC under the leadership of Charles de Gaulle. Reluctantly, in July 1961, Britain applied to join the Community, the first of two applications with each one in turn rejected by de Gaulle. The French vetoes of the 1961 and 1967 British applications left a bitter aftertaste. The French president accused London of ‘deep-seated hostility’ towards the European project and argued that the ‘Common Market is incompatible with the economy, as it now stands, of Britain.’
De Gaulle’s resignation as president in 1969 saw a change in Britain’s European fortunes. The second application was reactivated in 1970 and after 18 months of negotiations, Britain, along with Ireland and Denmark, entered the EEC on 1st January, 1973. The first enlargement should have been a period of optimism after a decade of failure. Yet, the oil shocks of the 1970s and Western economic stagnation that followed meant that many of the economic promises linked to membership were not realised.
Additionally, Harold Wilson, leader of the opposition Labour Party, made clear that if his party won the 1974 British general election, he would not only renegotiate the accession deal but he would put that new deal to a referendum which he did, in 1975. Wilson’s party, like the Conservatives in more recent decades, remained hopelessly split on the Europe question, and seven of Wilson's cabinet colleagues openly pushed for a Brexit. Although Britain's original nationwide referendum on EEC membership ended with a comfortable ‘yes’ vote in June 1975, it came only after Wilson negotiated generous additional monetary payments from Brussels through the Community’s regional policy. So, while Britain avoided an annulment of its recent new partnership with Europe and Home Secretary Roy Jenkins claimed that the result ‘puts the uncertainty behind us’, his words rang hollow even at the time. Even though Britain voted to remain in the EEC, the erratic nature of London’s European policy did not end there. On the contrary, every British prime minister after Wilson took aim at the nature and direction of the European project.
Britain’s relationship with its European partners deteriorated further when Margaret Thatcher entered Number 10 Downing Street in 1979. Thatcher was determined to confront what she viewed as the excesses associated with Britain’s annual contribution to the Community’s budget and EEC spending. After years of bickering with other European leaders, including German chancellor Helmut Kohl and French president François Mitterrand, Britain secured a permanent budgetary rebate at the 1984 European Council summit. Nonetheless, Thatcher continued to clash with European Commission President Jacques Delors throughout the 1980s over his attempts to advance European integration at the expense of national sovereignty. Fears from within even Tory ranks that Thatcher had overreached with her famous ‘No, No, No’ speech to Europe contributed significantly to her downfall in November 1990.
Her successor, John Major, had an equally troubled relationship with Europe, especially after the Maastricht Treaty entered into force in 1993. With recent, raw memories of the painful 1992 ‘Black Wednesday’ sterling crisis that led to British withdrawal from the European Exchange Rate Mechanism, Major had little appetite for further economic and monetary union, and the increasingly Eurosceptic Tory backbenches had even less. So, when Tony Blair swept to power later that decade, it was no surprise that then- chancellor Gordon Brown ratified Major's original decision, establishing five ‘tests’ in order to give up the British pound — tests that almost certainly would not be met. Brown betrayed his diffidence regarding the single currency with his first major policy as chancellor — delivering monetary independence to the Bank of England, a move that announced that he did not foresee Britain transferring UK monetary policy to the European Central Bank anytime soon. Britain would not become part of any fiscal union with the European. The two-tier Europe that was already emerging in the 1990s became an enshrined reality by the early 2000s, through enhanced cooperation, variable geometry or differentiated integration among the member states, by which time Britain had not only opted out of Eurozone membership and scoffed at a unified European foreign policy, but had also rejected the Schengen Agreement on the removal of border controls with the rest of the European Union.
Having spent decades with Britain labelled as the ‘reluctant European’, British ministers sat uncomfortably around the EU table as an increasing number of decisions have been taken by qualified majority voting, leaving British diplomats with less leverage in Brussels than ever and making it impossible to slow down or veto EU initiatives. When David Cameron vetoed the amendment of existing EU treaties to tighten the largely toothless revision of the Stability and Growth Pact that German Chancellor Angela Merkel championed at the end of 2011, Merkel affected an end-run by negotiating a ‘fiscal compact’ that every other EU member signed, except Britain and the Czech Republic. Though Cameron's move marked the first time that Britain vetoed a European treaty outright, it hardly felt like a watershed moment in British-EU relations. Instead, it was just another example of the increasingly familiar British opt out. Deeper political, fiscal and banking integration, even in an effort to save the Euro and forestall a financial crisis that could leave Britain in an even deeper recession, was always going to spook Cameron’s Tory backbenchers. After having avoided the straitjacket of a one-size- fits-all monetary policy, no British prime minister could reasonably renounce sovereignty over fiscal policy as well.
It is not unfair to ask, as many of us, including K.A. Lees and I have in number opinion pieces published over the last three years, if Britain has not been ‘leaving’ Europe in slow motion all along? For example - limited initial British appetite for a federal Europe; Wilson's 1975 referendum feint; Thatcher's budget rebate; Major's refusal to sign up to the Schengen Area; Brown's convoluted rejection of the Euro; Blair's rupture over the U.S. invasion of Iraq and Cameron's veto of the EU’s fiscal compact.
The decision on 23rd June to leave the European Union should, therefore, not some as such a shock. But despite the lessons that history can teach us about the origins and development of Britain’s European relationship since the end of the Second World War, the most pressing question is what happens next? After the political and economic earthquake, the referendum aftershocks are still being felt. On the political side, David Cameron has resigned as prime minister and the race has been won by Theresa May, who became the second female holder of the keys to No. 10 Downing Street. The longest-serving Home Secretary in half a century, her foreign policy views are largely unknown. While she was part of the Remain side in the referendum, she played a low profile role but her record indicates she is more of a hardliner on immigration than many who supported a Brexit.
The Labour Party too was in turmoil. Jeremy Corbyn, its Eurosceptic leader, faced a serious shadow cabinet revolt with the majority of his colleagues resigning their posts in protest at his lack of enthusiasm for campaigning to remain in the EU. It was an historic first with both the main political parties searching for fresh leadership, all over the Europe question. Added to this Nigel Farage, leader of the UK Independence Party (UKIP) has also stepped down claiming that his job is now done. For decades, UKIP’s main goal was to get Britain to leave the EU. Some might say, including Farage, mission accomplished. In Scotland, Nicola Sturgeon, the first minister, has pushed for a second referendum on independence and has threaten to prevent the new prime minister invoking Article 50 of the Lisbon Treaty that would not only make official the decision to leave the EU but also begin the two-year negotiating period for withdrawal. Legal experts remain unconvinced that the devolved British assemblies have the power to prevent Westminster for unilaterally taking the UK out of the EU. Similarly, Sturgeon will need London’s consent to hold a second bid to regain independence. In Northern Ireland, the other province to vote to Remain in the EU (England and Wales voted to leave), there have been calls for a border vote but this unlikely to happen.
Economically, the effects are still being felt. Britain, after all, has voted to leave the world’s biggest trade bloc. The pound fell to a 31-year low against the US dollar and there is growing uncertainty about the future relationship between Britain and the EU’s internal market. The reasons behind the decision to leave are varied and complex. Clearly, sovereignty played a role with English voters in particular keen to claw back many of the powers London has handed to Brussels over the last 43 years of membership. Immigration played its part equally too. Even though Britain is not part of Schengen and has control of its own land, air and sea borders (it has a common travel area with the Republic of Ireland, largely for historic reasons), many voters still want to reduce the number of non-British entering the country. In particular, the massive influx of Central and Eastern European workers since 2004 has caused unrest not only with the Eurosceptic wing of the Conservative Party but it has become a key issue for UKIP. The question now remains, what will happen to those EU citizens currently living and working in Britain and those 1.2 million British nationals residing in the EU?
Going forward, Britain must negotiate not only an exit agreement to unravel four decades of EU rules and regulations but also work out a new trade deal with the 27 remaining EU member states. This will take some time. The Treaty of Lisbon provides a two-year window for these exit talks and this can be extended. Yet, the talks on a new trade deal are likely to last longer. It is worth recalling that the recently completed EU-Canada trade agreement took seven years to complete and this has yet to be ratified by the member states. Britain will want to avoid this lingering uncertainty with companies reluctant to invest in the UK unless they are certain Britain will have access to the all important internal market of 440 million consumers. Yet, nothing is certain. A sense of buyer’s remorse has set in Britain with some questioning whether Britain will ever invoke Article 50 and begin the process of leaving. This is because of the ongoing economic aftershocks. A decline in the pound and a more serious decline in the British economic might well make the next prime minister think twice before pressing the nuclear button and walking out of the EU’s front door with first developing a post-Brexit plan. Yet, PM Theresa May have made it clear they will begin the exit process but what is not clear is when that process will start.
In short, Britain will likely face a decade of economic uncertainty and increased political isolation as a result of the vote to leave. Added to this is the impact the result will have on the UK and its component parts. A second Scottish independence referendum is now more likely than ever and the future of Northern Ireland remains in doubt. The genie is out of the bottle.
Beyond Europe, the implications of Brexit will reverberate for some time. The day that Britain voted to leave, President Obama phoned Cameron and the German Chancellor, a sign perhaps of Washington’s inevitable pivot from London to Berlin. Britain had long been Washington’s political access point to the EU yet the results will lead to a redefining of that ‘special’ Anglo-Saxon relationship. Berlin will become far more important an ally for the US in the years ahead. Should Scotland decide to leave the UK and seek EU membership in its own right as a nation state, Britain will have difficulty justifying its seat on the Security Council. The British nuclear deterrent would have to move from the North Sea and that sense of decline will once increase. A relic of the post-war settlement, the Security Council should and must be reconstituted to include countries such as India and Brazil as permanent members.
The vote to leave the EU was historic; to date, Britain is the only country to have voted twice on whether to leave the EU in the history of the integration process. Once the political dust settles in London, a clearer picture will emerge of how Brexit will take effect. However, those waiting with bated breath for a quick and painless divorce settlement between London and Brussels will be sorely disappointed. The EU will play hardball if Britain wants access to the internal market, access that will come with a price, the price being London’s acceptance of the EU’s four cherished freedoms, including the free movement of EU citizens to work in Britain. It remains to be seen whether the decision to leave will result in long-lasting and painful economic and political consequences for the future of the United Kingdom.
The writer is a tenured Assistant Professor of Contemporary Europe and the European Union at Maastricht University, The Netherlands and Global Fellow at the Woodrow Wilson International Centre for Scholars, Washington, DC, USA.