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LILICO Andrew looking down

Over the past couple of days we’ve had two significant proposals purporting to be about how the UK should seek to renegotiate its position within the EU, whilst staying inside.  The first was from 95 MPs, saying national Parliaments should have a veto over any EU measure they wanted to reject.  The second was from Business for Britain, saying UK firms selling only to the UK domestic market should be exempt from EU rules.

These two ideas reminded me of two other, from over a year ago.  Back in 2012, presumably aware of the British mood to repatriate something, Ed Miliband told and interviewer he wanted to repatriate state aid policy so as to allow the UK to pursue a more activist industrial policy.  Just before that, Daniel Hannan proposed than the UK should repatriate the ability to make trade agreements with third countries.

Each of these proposals has its own pros and cons, but all share one vital ingredient: despite claiming to be policies to “renegotiate” our position within the EU, the practical consequence of each of these policies would be the EU coming to an end in its present form or, if applied only to us and not to other Member States, to the UK leaving the EU.

Let’s step through quickly to see why.  First, the 95 MPs proposal.  This is that the UK should have a national veto over any new EU measure and be able to disapply any measure that currently exists.  Suppose everyone in the EU did that.  What would the Italians think about rules that require UK fashion houses to be able to sell there?  What would the Spaniards think about rules preventing barriers from being put in the way of British financial services firms?  What would the Germans think of rules preventing special manufacturing conditions being imposed on beer sold there, or Swedes on goods that don’t match their preferred green rules?  The very essence of the Single Market is that all countries are bound by the rules, including the rules they themselves don’t like.  To abandon that principle is, straightforwardly, to end the Single Market.

What about the Business for Britain proposal?  This is that only companies that export from the UK would have to abide by Single Market rules (at least, this is the proposal as reported in the Telegraph – I understand the actual proposal, out tomorrow, may differ). But what about UK companies that don’t export but who compete with French or German imports?  If those imports wouldn’t have to abide by Single Market rules we’d be saying 95 per cent of UK firms would then be in industries to which the Single Market didn’t apply – i.e. would be outside the Single Market.  If they did have to abide by them then imports would have stricter rules than domestically sold products – violating everything that the Single Market is about.

Ed Miliband’s proposal is much the same.  If state aid policy were repatriated the French would subsidize their cars and airlines and the Italians their telecoms companies and the Poles their ship-builders and so firms from other countries would be in much the same position as if they paid tariffs – the subsidized products would be cheaper because of state aid so trade would be massively distorted and the basic concept of the Single Market lost.  Daniel Hannan’s proposal neglects the fact that the Single Market is, inter alia, a customs union with a common tariff and common standards and non-tariff barriers applied to imports from outside the EU.  If we could set up a trade deal with Canada to import goods with lower tariffs than are imposed by France that common tariff structure would be dead.

Now obviously there is nothing to be ashamed of in wanting to leave the EU.  Indeed, that is such a politically acceptable position that we are planning to have a referendum on it.  But leaving is leaving, closing down the EU is closing down the EU, and “renegotiation” is, well, not leaving or closing down the EU.

Currently opinion polls suggest than in a forced choice more Britons would currently vote to leave the EU than to stay, but the majority would prefer to stay in a “reformed” or “renegotiated” EU.  I do not trust those polls at all, because most schemes discussed in the press for “renegotiation” are like the four above – i.e. would imply the end of the EU or at least of the UK’s membership.  So saying if folk got what they wanted from a renegotiation then they’d vote to stay in the EU misses the point that for many of them (I’d guess a third to a half) there would be no EU in practice after such a renegotiation anyway.

I suspect there are three things going on here.  In some cases it’s semantics – some folk are saying, in effect: “I don’t mind you calling it a “renegotiation” provided that, in substance, we’ve left the EU.”  Others (e.g. perhaps Ed Miliband) may not grasp that their “renegotiation” proposals are in fact proposals to dismantle the EU.  Other folk are trying to set up renegotiation to fail – saying, in effect: “Unless “renegotiation” means this it will not be worth the candle” and expecting failure that will be followed by exit.

If you were sufficiently cynical, then perhaps ten years ago if you were committed to leaving the EU and wanted to avoid a successful renegotiation (even a deep one – which at that point was still possible) there might have been a case for muddying the waters about what “renegotiation” meant by calling things “renegotiation” that would in fact mean the end of the EU or the UK leaving.

But I think today that tactic likely only to backfire.  For in truth there are an enormous range of things that we would need to renegotiate in order to stay within the EU – a genuine “renegotiation” that implied staying – as I’ve discussed many time before.  But there is no longer any realistic chance of achieving those things, so get-outers would be well-advised to let those seeking a genuine renegotiation get on with it and fail.  Pretending schemes from leaving are actually renegotiation is likely only to make the get-outer side of the debate seem shifty, cynical and distorting.  And one of the best ways to lose a referendum is to make the public think you are liars.

124 comments for: Andrew Lilico: “Renegotiation” should mean “renegotiation”, “leaving the EU” should mean leaving, and we should be clear which is which

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