Brexit: Withdrawal Agreement and Political Declaration

My Lords, I do not want to add to the volume of speculation about what will happen tomorrow or a day or two after. The noble Lord, Lord Howell of Guildford, expressed clearly my position on what should happen: the withdrawal agreement, or an amended successor to it, should be made subject to a vote of confidence, and if the Government lose it there should be a general election. That is the clean and British way but whether it will happen is in the hands of the gods at the moment.

I hope to add value today as an academic, and in this no doubt Utopian quest I should like to make three quick points. First, it is wrong and misleading to describe people’s behaviour in ways that they would not themselves recognise. We should not label the leave vote as the vote of the left-behinds or the ill-educated. These phrases have a certain descriptive accuracy and draw attention to the damaging legacy of austerity and insecurity, as well as to faults in the education system. However, it is wrong to say that 17.4 million people voted to leave the EU because of these things. That is not only condescending but to deprive voters of agency. No one will tell you, “I voted to leave because I was left behind or badly educated”, but they will give a reason, and unless these reasons are taken seriously and not just seen as the effects of a cause, we seriously misconstrue human behaviour and risk drawing wrong conclusions on policy.

Secondly, it is absurd to explain the referendum result by saying the leavers were misinformed. No doubt they may have been on financial matters, but this explanation leaves out the whole history of our relationship with the EU. That we are likely to be the first country to leave cannot be separated from our lateness in joining, our motives in joining and the persistently low levels of support for the European Union, as revealed by the Eurobarometer, and particularly for its political implications.

In today’s FT Wolfgang Münchau writes that he is,

“constantly amazed by the inability”—

of the remainers—

“to make a positive case”.

The explanation lies in their inherently economistic view of the EU—it is a matter of benefits and costs. Very rarely has there been enthusiasm for Europe as a cause.

Finally, a bit of political economy may help. The single market was a Thatcherite initiative of 1985. The Maastricht treaty, which set up a single currency—from which, of course, we opted out—followed in 1992. The simultaneous deepening of economic integration and the widening of the economic union to include 28 countries without a parallel strengthening of the political institutions was a fundamental mistake. Free trade in goods is one thing; free trade in capital, financial services and labour and a single currency require a degree of political integration—in short, a European Government—which some aspired to but has never been realistic. The economic cart should never have been allowed to run so far ahead of the political horse.

Why was it done? The political reasons have been well rehearsed; I want to emphasise the faulty economic logic. Widening and deepening came at the height of faith in the free market and mistrust of government. Completion of the market, economists preached, would maximise efficiency. The only macro policy needed was an inflation target, whose achievement could be reliably left to an independent central bank. There was no need for a European Government, just the appropriate legal and regulatory framework. This delusion has been the cause of most of the EU’s trouble.

The noble Lord, Lord Adonis, who is not in his place, would say that that is why we must push for a European federation now, to which I would reply that we are not ready for one and neither are most members of the European Union. The German Finance Minister Wolfgang Schäuble recognised this when he proposed a multi-speed Europe in 1994. His argument was that different member states had varying appetites for integration and that a core Europe consisting of Germany, France and the Benelux countries should federate, leaving others in a looser union to catch up with the core if and when they were ready for it. We would have been saved a huge amount of trouble had that proposition been acted on.

I voted remain because I wanted Britain to push constructively not for a federal Europe, but for a multi-speed Europe. I still think this is the only way the EU can be made to work and the only way we could have worked with it, but our voters were asked to decide on the basis of what was, not what might have been or what might be. We should respect their decision, and for the time being, at least, we must watch the European Union’s struggle for coherence from the sidelines.