For the second part of the 'YouGov-Cambridge Forum 15’, Peter Kellner (YouGov President) chaired a panel discussion on what happens next in the EU referendum process and the implications of different scenarios for British politics, business and constitution. Speakers included: Andrew Rawnsley (Chief Political Commentator and Associate Editor of The Observer); Will Tanner (Head of UK Public Affairs, Finsbury/Vice-Chair of Business for New Europe); Dr Christopher Bickerton (University Lecturer in Politics, POLIS); Dr Alan Renwick (Deputy Director, UCL Constitution Unit).
INSERT - background on Article 50: Assuming the UK clearly votes to leave the European Union, Article 50 of the Lisbon Treaty will be invoked and the UK government would notify the European Council of its intention to withdraw. Article 50 says that once the notification of withdrawal from the EU occurs and negotiations begin between the departing country and the rest of the EU, the purpose of the process is to develop an agreement about the future relationship between the remaining members and the departing state. Any deal would need to be agreed by the European Parliament and by the qualified majority of the 27 remaining EU members.
Part I Summary: Q&A between Peter Kellner (PK) and Dr Alan Renwick (AR) on the constitutional implications
PK: Can there be pre-negotiations before triggering Article 50?
AR: If after a period of two years from the time you have notified your intention to withdraw, and a deal has not been done, unless there is a unanimous vote, the UK automatically ceases to be a member of the EU. If no deal has been done, it means we have to impose tariffs on imports and exports between the UK and the EU members. Not having a deal is a big deal.
However, the two year process can be extended but it requires a unanimous vote of all the continuing members of the EU. That process gives a lot of power to the continuing member states which is why it might be attractive to get some kind of negotiations going before that procedure is started.
PK: With whom would the UK be negotiating with once Article 50 is triggered?
AR: The negotiations on leaving would take place in the European Council where heads of governments of EU states gather.
On one side of the table are remaining members of the EU, and the UK will be on the other side. This is a negotiation about withdrawal and not about changing the nature of our membership in the EU. Of course it could be that we negotiate some kind of deal like the one Norway has. But, nevertheless it is a negotiation about withdrawal.
PK: After you have triggered Article 50 – after the two year period – is it a ‘must’ to leave or is there a chance to say ‘we made a mistake, we want to stay’?
AR: There is no mechanism. But, if it is the case that a sufficient number of member states want the UK to stay in, then presumably they could do that.
PK: Would you expect those Council meetings to be the place where the actual negotiations take place or will it be behind closed doors?
AR: European Council discussions take place behind closed doors. This is going to be a huge process involving a discussion of all sorts of intricate matters. Clearly many discussions will take place behind closed doors. At some point in the process, the European Parliament needs to give its OK but it’s not involved in the negotiation process.
PK: Do you think, in practice, the involvement of the European Parliament would make it harder for the other 27? If there is an agreement with the leaders, is there a chance the European Parliament might overturn the deal reached saying it is too generous? Is the European Parliament a decoration or a piece of this process?
AR: This process has never taken place. I would be surprised if the European Parliament pushed very hard, but the European Parliament might well push a bit in order to assert itself. However, that is a further complication.
PK: UK membership of the EU is built into the legislation that underpins devolution to Scotland, Wales and Northern Ireland. What happens to that if we go for a Brexit?
AR: The Acts leading to devolution indicate that devolved assemblies will have to act within EU law. In order to fully extricate ourselves from the EU it will be necessary for us to change those Acts. Those are Acts of the UK Parliament and it has to be the UK Parliament that does that. However, the UK Parliament and government have strongly said they will not change the devolution settlement without the consent of the devolved assemblies. So, for example, the Scottish Parliament will need to consent to that change.
Now, clearly if Scotland has voted to stay in and the rest of the UK voted to go out there is not the slightest chance that the Scottish Parliament would pass the legislative consent notion. Then the UK Government can eider decide to ignore the constitutional convention and, in that case, we have a real constitution crisis and the future of the Union is in doubt. Or, the UK government decides we cannot do this without the consent of the Scottish Parliament, and then Nicola Sturgeon gets her way.
Perhaps we may manage to negotiate something else in which different parts of the UK are more or less in the EU than each other. I don’t think anyone has thought about this in detail. But, whether it is possible to negotiate some kind of deal where eventually Scotland is a bit more like Norway and the rest of the UK is a bit more like Switzerland – we can try.
Part II Summary: Will Tanner on business implications
The UK has to have access to the single market
“[The single market] is why we joined the European Union. That is why on the Friday morning after the referendum we will need to know do we have a guaranteed access to the single market. I think that will be the absolute key and we will most likely see Cameron saying – the single market is safe with me, and that is why the Norwegian option will be pursued initially.”
The post ‘leave’ relationship: Norway
“[In Norway] you pay the budget, you have to accept freedom of movement, but you don’t have the ability to change the process. Some Norwegian politicians call Norway a ‘fax democracy’ – where you get the fax from the Commission saying these are new rules, and you have to start following them”.
The post ‘leave’ relationship: Switzerland
“Switzerland does pay but not as much as the Norwegians and has some latitude in free movement. The Swiss model is essentially a set of bilateral rules between the EU and Switzerland. Over the years they have developed a system where Switzerland is to all intents and purposes a member of the EU apart from financial services.
“The big flaw of the Swiss option is why would the Europeans, who want to create their own financial services industry, agree to London staying as its big competitor?”
The UK implementing the Swiss model would take years to negotiate, says Tanner. “In that period it would not be in Britain’s interest to trigger Article 50 because we would only have a two year time-frame to make a deal or end up out of the EU. If the Swiss model was the only option you would want to get that quickly and negotiate a better deal than Switzerland has.”
The post ‘leave’ relationship: ‘Other’
But, as the UK is a bigger country than Switzerland or Norway Mr Tanner believes a different solution is needed. “That is why no one is talking about those options and everyone is talking about the ‘British option.’ The problem is that no one knows what it looks like and will the European countries be willing to accept it?”
“This is about the single market and that is what will drive people’s votes. Britons, on the whole, are not great federalists – we are an island nation. It’s the single market what will drive people to vote. They will be voting for their economic security or against economic insecurity as they see it,” Mr Tanner concluded.
Part III Summary: Dr Christopher Bickerton on the current state of the referendum debate
“I am bemused by the idea that the UK should not have a referendum because that will trigger a referendum in France and other parts of Europe. It’s up to the French and other pro-Europeans to fight that. We are talking about a democratic consultation with the people. That is what the referendum is all about. There seems to be an implicit assumption that none of us like these referendums and wish they just go away.”
“We had a referendum in Greece, we have a referendum next month in Denmark. In April next year we will have a referendum in the Netherlands. This is the domino effect of democracy and not a necessarily negative thing.”
“There are two striking things about the campaign so far. One is the political vacuum – there is no big weight politician coming in, taking a stand and arguing either way. The other thing I am struck by is the dominance of the special interests. So far, when it comes to funding, the ‘out’ campaign seems to be run by the City and hedge funds.”
“If you want to win a campaign you have to have a general narrative. The tears of the financial community vs the desires of hedge funds – that is a very strange campaign but that is what we got so far.”
“We should embrace the referendum as a good thing, as a chance to reflect about the future of this country. It is not often that we have a chance to do that.”
Part IV Summary: Q&A between Peter Kellner (PK) and Andrew Rawnsley (AnR) on the effect of a ‘No’ vote in British politics
(Intro from) AnR: “Say Britain has decided to leave (which is an event much more important event than post war elections). We assume David Cameron has actually recommended to accept the renegotiation plan to the British people and stay [in the EU]. That would mean that Cameron has failed and I would have thought he is on his way out of No 10.
Some of the secondary effects are on Cameron’s favourite – the Chancellor of the Exchequer. George Osborne would end up looking quite weakened because he would have been involved in the renegotiation of the financial deal with the EU and reselling it to the country.
“As the Conservative party is casting for an alternative [leader], either it will be looking for a Conservative who was prominent on the ‘out’ side – some mention Theresa May – or it’s going to be looking for a Conservative who they think might put things back together again and has probably played a rather ambiguous role during the campaign. Someone who has never said he will vote ‘out’ or has openly support Cameron on this.”
PK: At that point Britain will be two years away from leaving. Will that affect the choice of leader and how parties behave?
AnR: In the circumstances of a ‘no’ vote the pro-Europeans will be demoralised and all the momentum will be with people on the other side of the argument. Those people – Nigel Farage and the Conservatives who share his position – will immediately go on to say ‘let’s just make sure we’re not going to be sold out – those people in the European Commission will somehow negotiate a deal which means even though on paper we are outside, for all intents and purposes we are still in the EU.’ From a Farage point of view if we end up with a Norwegian option where there is still freedom of movement he will be the first to mention the strong presence and influence of migrant workers in Norway.
PK: How easy would it be for the new Conservative leader to keep the party together in these circumstances?
AnR: To be honest, win or lose it, whichever way it goes it will be a challenge for the Conservative party to put itself back together again. It slightly depends on how inflamed certain inner circles are.
PK: What will happen with the Labour party if the UK votes to leave? Is Jeremy Corbyn stronger on 'Black Friday', after the 'no' vote wins?
AnR: Jeremy Corbyn and John McDonnell are, at best, ambivalent about the EU as they share the old-left analysis of the EU as the banker’s ramp. So, probably neither of them would play that prominent a role in the campaign. The Labour pro-Europeans would hope most of the messages would be given to someone like Alan Johnson.
Most of the Labour party and its MPs are going to be appalled by the ‘no’ outcome. Over the longer term we may get to a point where people in the UK may begin to have bitter remorse as they discover it isn’t a brilliant deal to be outside the EU. Then it is probable the Labour party will start a campaign for a new referendum to get us back in.
The Labour vote will be quite important. Labour voters will be asked to endorse a Conservative PM’s position. By the nature of things someone might find that difficult. The signals they get from Labour leaders will be very important.
PK: What if Scotland votes to remain ‘in’ the EU?
AnR: If this happened the Scots will trigger a new referendum on independence. It's the perfect context for them, a perfect excuse and they would have the right to say 'the rules of the game have completely changed, our status in the UK is completely different, it's time to leave'... However, the SNP is more likely to have a second referendum once they think they can win it.
The lesson of Quebec shows: Turn it down once - you can come back and ask again. But turn down twice – it probably kills it. Therefore, it is quite right that they would like to see a stable lead in the polls, preferably 60%/40% for at least a year, before the second referendum occurs.