What if the EU Referendum hadn’t been held in 2016 ?

 I’ve often wondered what might have happened to the UK’s fortunes if David Cameron hadn’t decided to hold a referendum on EU membership in June 2016.

Given his obvious desire to see us stay in EU, and the adverse public opinion on immigration and its effect on jobs in particular at the time, I'm sure I'm not alone in wondering why on earth he did….

The Background

Although he had promised a referendum in the 2015 manifesto, to be held some time during the lifetime of the parliament, Cameron had plenty of wriggle room and could easily have ‘kept his powder dry’ until much later in the parliamentary term, which he had already fixed at a full 5 years. Although the precise reasons why he went so early in the parliament aren’t 100% clear, I suspect a large part of the impetus was his failure to gain significant concessions on free movement from Brussels by early 2016. A detailed examination of the issues thought to have led to his decision can be viewed here. Some commentators at the time rather caustically likened his subsequent reaction to that of a baby ‘throwing its rattle out of the pram’ in response to not getting what it wants. To be fair to Cameron, the position was somewhat more complicated, but there was certainly an element of pique, as shown by some of the headlines claiming that he had actually threatened to vote for Brexit if he didn't get the concessions he wanted from Brussels.

Whatever the reason for his choice of timing, Cameron misread the signs in the spring of 2016 and assumed he could get a ’Remain’ vote through relatively easily that summer. This presented the Brexiteers with their key opening. The rest, as they say, is history….

What If ?

But what if he hadn’t ? Let’s look at what might have happened (or indeed might still be happening now in a parallel universe, if there is one !).

Possible Outcomes 2016-2022

The first consequence would have been that Cameron would not have felt the need to resign the leadership at that point. He would also have had considerable support within his party for holding off – the manifesto ‘pledge’ was, like all such ‘promises’, merely a statement of intent made on the assumption that circumstances don’t change materially – and they invariably do. If voters refused to re-elect politicians who break manifesto promises, nobody would get elected ! 

Although limited rebellions amongst right wing MPs had started as early as 2011, these were deemed to be controllable. Indeed, George Osborne was a strong supporter of Remain, and actively advised him against ‘caving in’ to the ERG rebels. UKIP’s rapid development was a significant factor, but it was still very much a ‘fringe’ movement at that stage.

A decision not to go in 2016 might well have spared us Theresa May’s fractious and effectively deadlocked period in office, culminating in a mis-timed election and a dangerously near miss from the political and economic ‘asteroid impact’ that would have been the result of a Corbyn government. We would also probably have missed out on the experience of a Corbyn-induced ‘Boris Landslide’ of 2019 and the downhill spiral towards Brexit in 2021, almost 6 years after we voted. I’ll leave the reader to lament or rejoice in the actual course of events following that particular event as they think fit…..

Covid

The Covid pandemic would probably have started ‘on schedule’ in early 2020, given that its cause is now widely accepted to have been risky exotic animal husbandry in Chinese live animal markets, and this threat had been building for some time (the practices still continue ‘under the counter’ to this day in response to the demands of Chinese Traditional Medicine industry - we should therefore expect further pandemics originating in SE Asia as a result). 

Cameron would probably have gone to the country in the Spring of 2020 on time, given the fixed-term parliament legislation was his own invention, although an election with Covid in full swing would have been problematical, and the election might therefore have been postponed until later in the year. A change of government to a new hard-left unproven (and untrusted!) Corbyn regime at that stage would have been unthinkable, so the chances are that Cameron would have been re-elected, although possibly not by a Boris-style landslide.

Political Aspects

What of the EU debate ? This would certainly have continued throughout the lifetime of the 2015 parliament. By 2016, though, the ‘seeds of dissent’ against Brussels’ bureaucracy, and EU dogmatism generally, were beginning to show up in some other EU countries, notably in a number of the late-entry eastern European states and Austria. Germany’s erstwhile dominance of the bloc was also destined for a knock, starting with Merkel’s disastrous open door immigration policy, then the subsequent wind-down towards her eventual retirement in 2021. This led eventually to her CDU-led coalition's defeat and Scholz’s much weaker left-wing SDP/FDP/Green coalition government taking office.  The French/German EU pact’s dominance would thus eventually have been broken, leaving Macron as the only real rival to the UK for the dominating influence within the bloc.

Cameron could well have made use of these changes of circumstances in the late 2010s by forming an effective negotiating alliance with other dissenting partners in the EU. Had he done so, I suspect Brussels would have been forced to give ground, particularly on free-movement, thus obviating the need for a referendum on UK membership. It might even have led to the eventual end of the ‘tail wagging the dog’ syndrome that continues to annoy some of the more dissenting voices who have remained in the bloc. By staying in and challenging Brussels in this way, we would have maintained our sphere of influence as an active and respected member of the bloc, rather than morphing into a small offshore European island (yes, like it or not we are still geographically part of Europe) now widely regarded as a competitor and struggling to gain concessions from the much more powerful assemblage of nations on our doorstep.

Much of the EU’s behaviour in the early years following Brexit was based on the premise that the UK needed to be seen to be punished for daring to leave 'the club'. It’s only now that they are beginning to relent – and this is largely due to Putin’s Ukraine ‘adventures’ and their unifying effect on the ‘free’ world. This apparent largesse, as they no doubt see it, is however unlikely to extend to any ‘sweetening of the pill’ should we ever decide to reapply for EU membership (see below for the reasons why). Had we voted to stay in, there would have been no need for overt punishment tactics, although the internal wrangling I've described might have led to a difficult showdown with Brussels leading to internal sanctions.

Economics

How would we have weathered the Covid ‘storm’ throughout 2020-2022 had we still been in the EU ? I suspect that our dominant position in the scientific arena would still have allowed us to make a similarly important contribution to Covid vaccine development. We would likely also have been significantly better off financially at the end of the day, with the high cost of furlough in particular being partly defrayed by EU funding, although regulatory approval for the AZ and Pfizer vaccine roll-outs might have taken a little longer with MHRA still being aligned with EMA, and therefore less able to 'go it alone' by fast-tracking vaccine approvals as they did in late 2020.

There is general agreement among the various economic 'think tanks' that our economy would undoubtedly have been in much better shape than it is now. Estimates of how much we have lost by leaving vary and the calculations are complex, but the general consensus is that our economy is now ca 5.5% less prosperous than it would have been in the EU, with falls in all elements apart from exports turning out to be greater than originally predicted. Recent predictions for the future suggest that over the next decade our GDP will be ca 4% lower than it would have been if we had still been full members.

One of the key promises made by the ‘Leave’ campaign was that Brexit would enable us to reduce radically the level of immigration which had been forced on us by the EU’s free movement principle prior to Brexit. Few will fail to realise now how disingenuous this was. 

Although the level of immigration from EU did decline radically after we eventually left in 2021, this was more than replaced by increased intake from other parts of the world. This, combined with the abject failure to control the surge in illegal channel boat crossings seen since 2021 and the Ukraine crisis, sent our net immigration total soaring to over half a million last year. (See blog on immigration and its effects).

Part of this increase was caused by our shortage of workers in key jobs, which itself was triggered by the loss of skilled workers returning home to the EU, thus forcing the Home Office to give ground on immigration quotas. Had we remained in EU and forced Brussels to accept better free-movement controls as previously suggested, we could have retained our skilled EU-derived workforce and avoided unnecessary large-scale ‘imports’ of new immigrants from farther afield to fill the gaps, many of whom were a worse fit to our cultural ‘norms’ - and less skilled. With more experienced and committed workers from the EU still in place, our NHS might also have been better at retaining its workforce,  and not now be fast-approaching meltdown due to staff shortages.

What can or should we do about it ?

So much for some thoughts about what might have been – what should we do about our current predicament ?

Given that the outcome of Brexit appears to have been worse than expected across the board, the first and perhaps most obvious question, is: ‘Should we apply to re-join the EU ?’.

For or the reasons I’ve described above, I believe we should have stayed within the bloc and ‘fought our corner’ in partnership with other dissenters. Now we have left, however, going back to Brussels now with our ‘tail between our legs’ to apply for membership at this stage would be disastrous.

There are many reasons for this, the most obvious being that Brussels would effectively be forced to offer us the poorest possible terms  “pour encourager les âutres”, as our French friends would put it. This would include a strict ‘probationary‘ term with monitored ECJ and EHRC compliance, and obligatory  full acceptance of the Euro, Schengen, and its associated free movement rules.

However 'warm' the relationship between UK and Europe actually becomes, Brussels could not risk any other members thinking there would be a warm welcome back with a built-in safety net if they tried to go it alone and failed. 

This is particularly pertinent at a time when the whole continent is struggling with a ‘Putin induced’ cost of living crisis, the continuing fallout of mass-immigration and increasing local dissent from a number of its eastern states. Paradoxically, the only real unifying factor at present is Ukraine, and if this goes away, with a weakened Germany and Macron’s France still likely to be in turmoil over pensions and other planned economic reforms yet to come, a breakup might be a real possibility.

That’s not to say we shouldn’t seek closer ties with Europe. The current ‘mood music’ confirms that EU may have got beyond the post Brexit ‘punishment phase’ and be actively seeking our re-integration as the staunch political and military ally we have always been since WWII. The NI protocol settlement negotiations showed this recently – even our arch-critic Macron seems to be willing to regard us more favourably nowadays and has even made some reasonable concessions on channel migrants. Although EU would, I’m sure, be happy to have us back as full members under their terms, they will be realistic in accepting this wouldn’t be politically acceptable in UK. It's also unlikely that a Starmer government would risk voters' ire by taking us back in under unfavourable terms, particularly if he is elected with a small, or indeed no overall majority in 2024.

We should capitalise on EU’s current willingness to cooperate by forming a closer relationship while the bloc as a whole is feeling more fragile. We should also avoid falling back into the ‘Boris trap’ of confrontation and an obsession with complete independence, now that the unfortunate consequences of this approach are becoming clearer. We are, after all, a small overcrowded island with an unfavourable demographic and a worsening financial situation; the EU is our principal trading partner and geography will ensure that no amount of independent trade deals with the rest of the world will change that. If we play our cards right and form a customised strategic alliance with the EU, we could reinstate many of the benefits of full membership without re-joining as full members, or even re-entering the Single Market. Now is probably the best time to do this, given the unifying effect of Putin's aggression.

We should also beware of inadvertently cutting off our options to form alliances with the EU. The recently announced membership of the pacific trading alliance (CPTPP) is all very well, but is likely to make a close EU trading partnership more problematical, particular if CPTPP membership involves deviating from EU standards. The predicted economic benefits of the new alliance are also minuscule, amounting to only 0.08% growth in our GDP over the next 10 years - far less lucrative than any potential EU partnership, and comparing unfavourably with the estimated 4%+ loss due to Brexit. The price of independence is a high one - we should remember that in our quest for it.

Conclusions

Had Cameron not held his referendum in 2016 there is general agreement that we would have been in a significantly better position economically. Although Covid would probably still have struck when it did, we would have weathered that particular storm with comparable death rates, and might even have been able to make a bigger contribution to the EU’s vaccination campaign. 

Putin’s 'empire grabbing' campaign would probably still have started in earnest by the mid-2020s, although a more united EU with the UK still in place might have put a brake on his ambitions sufficiently to make him think about another approach. 

A negotiating ‘pact’ with Austria and some of the other dissenting eastern European member-states might well have forced Brussels to take a less dogmatic approach on free movement concessions and allow derogations. This could in turn have enabled us to retain skilled EU workers at reasonable levels to satisfy internal UK demand while reducing immigration levels from the rest of the world.

We should not on any account attempt to rejoin the EU now, since conditions of entry would be too punitive. We should form a close alliance with the bloc, not just based on favourable trading conditions but on many other shared areas of interest. We should not allow other trade agreements to compromise our relationship with EU.

I hope these speculations on what might have happened in the absence of the 2016 EU referendum will be of interest – as oft quoted, the benefit of hindsight is a wonderful thing, and we should always bear that in mind when considering past events and their causes.

Viv

1.4.23