Brexit: Over and out

In 1973 the United Kingdom joined the European Economic Community, now the European Union. The economic title of this bloc was important as the Government saw it as a means to solve its trade deficit and to find a ready market for its goods across the Channel.

This heralded a new era of international cooperation and considerable trade benefits. Yet even then many UK politicians lamented the end of Empire and the diminution of the relationship with the Commonwealth. Many politicians and news media were Eurosceptics. The EU was the creature of the French and Germans and the UK did things differently. The bargain held for some decades because of economic benefits. Yet leaders such as Prime Minister Margaret Thatcher fought all attempts to create a closer union of the states of Europe in political terms.

The UK – like the other current 27 member countries – took part in every single decision of the EU. This often meant that national law had to be changed. The British public service implemented these laws efficiently. Yet British politicians tended to avoid giving acknowledgement to decisions that improved the lives of British citizens, such as the right to live and work in other EU countries. Hundreds of thousands of British students flocked to study on exchange in European universities.

The British co-wrote and signed up to EU laws on trade, social policy, consumer safety, food safety, workplace rights and maternity leave. They also successfully negotiated opt-outs when they did not agree with major Treaty changes.

So why did David Cameron – who resigned in the immediate aftermath of the Leave result – stake his political future on leaving this body? Why did he put the UK’s future in Europe at risk?

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There are two main reasons – one relates to British political agendas and the second is about the EU’s crisis.

First there is the decision of British politicians, particularly within the Conservative Party and the UK Independence Party (UKIP), to mobilise a Leave campaign around the longstanding British fear of the loss of sovereignty. This reflects a view of the UK’s unique position, a former world power that is not part of the continent. Politicians such as Nigel Farage of the UKIP and Michael Gove of the Conservative Party’s Leave faction promulgated a view of a distinctive British identity – and glorious history – that is not shared by its European partners.

Boris Johnson – perhaps the Prime Minister in waiting now – led a trenchant opposition to EU federalism. The UK relationship with the EU was presented as a form of clash of cultures and traditions. Yet other political factors were also at play – the opposition to immigration and the costs of EU membership. These Leave politicians exploited fears about loss of jobs to immigrants and loss of workers’ benefits and pensions. Particularly after the entry in 2004 of many Eastern and Central European countries, there was an elision of immigration and ‘Europe’.

Leave campaigners presented costs of membership that were refuted by British official sources. Yet the rhetoric stuck and the narrative of British exceptionalism and the need to exit the EU gained traction in the lead-up to the referendum. The lack of interest and trust in the EU was exploited by the Leave campaign.

For his part, David Cameron, having pledged ‘to settle the Europe question with a referendum’, led a lacklustre campaign to Remain, with little talk of the benefits of membership. Challenges to his leadership of a divided Tory party received media attention. Most of the Murdoch-owned media supported the Leave campaign, often with sensationalist headlines about Turkey joining the EU without UK consent and massive flows of refugees to the UK.

The Scottish leadership and many in Northern Ireland supported the Remain campaign and the results reveal a very divided and less united Kingdom.

All of these national concerns were also influenced by the fact there were few good news stories coming out of the EU. The EU is undergoing a crisis of legitimacy, a refugee crisis and continued problems of the Eurozone. Youth unemployment remains high and there is no narrative of hope within the EU at the moment. There is little talk by EU or national leaders of the benefits of membership of the largest economic bloc in the world, which accounts for up to 20 per cent of world trade in goods and services. The crisis-ridden EU did not seem very attractive.

So what happens next?

David Cameron will be obliged to commence the negotiation of the UK exit from the EU, which may take at least two years. There is little appetite within the EU to renegotiate favourable terms at present, especially among those Europeans who have dealt with UK demands for special treatment over many years. The UK must leave all trade and aid agreements that have been signed by the EU. It will then need to commence negotiations with every single potential trade partner, including Australia. To be sure, the Leave campaigners’ promise that the UK can make its own rules will come about – but at huge administrative costs and with a possible dismantling of EU laws that have become British law.

There is considerable uncertainty about a Norwegian option of paying huge sums to the EU to be part of the EU’s Single Market, yet accept EU laws imposed on it without any policy input.

The British pound is losing value. The markets are recovering from shock. It is likely that the Brexit will result in the UK having diminished influence, less prosperity, and declining international negotiating power.

UK citizens could lose the freedom to live, study, and work in Europe. British universities lose EU funding for research. The UK misses out on EU funding for less well-off regions and groups. There could be an erosion of workers’ rights.

Many companies – including Australian companies – will reconsider the UK as a gateway to EU markets. Minority rights and gender equality protection through legislation could be rescinded.

The EU for its part has lost a large member state and lost face. It will miss out on a pragmatic partner and reformer. There is fear of contagion from other EU states. The EU becomes a less powerful trader and a smaller economic bloc. It becomes a diminished international actor.

The UK was an awkward partner within the EU – it looks like it will now be an awkward partner of the EU.

Banner Image: A European Union flag, with a hole cut in the middle, flies at half-mast outside a home in Knutsford, England, after the referendum result. Picture: Christopher Furlong/Getty Images