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When the British people voted by 52 to 48 per cent on June 23rd to leave the European Union, the political and financial establishment was shocked. Why had so many ordinary Britons voted for a leap into the unknown? The conventional wisdom before the referendum had been that in most referendums voters cling to the status quo as the less risky option.
Yet after weeks of warnings from international organisations, the Governor of the Bank of England, business lobbies, trade unions and most of the main political parties in the UK about how bad it would be for Britain if it left the EU, victory came without the Leave side even having to explain what their alternative to membership would look like.
To an objective observer, Britain has done extraordinarily well out of Europe since it joined what was then the European Economic Community (now the European Union) in 1973. But that was not what voters believed. This article looks at what the UK gained, economically and politically, from its membership of the EEC/EU. And it offers some thoughts on why the UK’s successes in the EU were so often regarded as failures.
After the Second World War, the UK’s growth lagged that of other major European countries. From 1958 when the EEC was established, until the UK joined in 1973, the GDP of France, Germany and Italy increased by 95 per cent; Britain's GDP rose by only 50 per cent.1 In the 42 years since joining, the UK's GDP has risen faster than that of the other three major economies in the EU. Britain benefited from freer trade with Europe, and from more competition and more foreign investment in the UK.
Moreover, Britain played a vital role in promoting European integration by championing the European Single Market in the 1980s. It was Lord Cockfield, appointed as a British Commissioner by then-Prime Minister Margaret Thatcher, who led the drive to introduce qualified majority voting (QMV) so that one nation could no longer block liberalising measures in order to protect a domestic industry.
While successfully promoting its free-market vision of economic policy in Europe, the UK also managed to secure an opt-out from the obligation to join the EU’s planned single currency, the Euro, as part of the negotiations on the Maastricht Treaty concluded in 1992. When John Major’s Conservative government, which had won the opt-out, was replaced by Tony Blair’s more pro-European Labour government in 1997, the UK announced a number of economic ‘tests’ to determine whether it should join the Euro; but when then-Chancellor of the Exchequer Gordon Brown decided in 2003 that it was not in the UK’s national interest to do so, that effectively guaranteed that the UK would retain the pound. As a consequence, the UK avoided many of the problems that hit the Eurozone after the financial crisis of 2008-2009.
In the political field the UK was equally influential. As the Cold War ended, it championed EU enlargement to include the countries of Central Europe. Those like Commission President Jacques Delors who wanted the Community to focus on ‘deepening’ (ie increasing the power of the supranational institutions of the Union, at the expense of the member-states) lost to those like Margaret Thatcher’s successor, John Major, who wanted it to focus on ‘widening’, by taking in the newly democratic states to its East. In 2004, ten countries, including seven former Warsaw Pact members, joined the EU. The UK was one of only three existing member-states (the others being Ireland and Sweden) that allowed citizens from the poor ex-Communist countries to come and work without restriction. Millions came; and for a few years, until the global economic crisis struck, Britain’s economy boomed.
The parallel enlargements of the EU and NATO were vital in managing the relatively peaceful shift from communism in Central and South-Eastern Europe. There are still many challenges to good governance and the rule of law in the region; but on the whole the approach backed by the UK, of using the incentive of EU accession to encourage reform, ensured that these states enjoyed economic growth and (relative) political stability. And Britain’s early support for enlargement meant that the countries of Central Europe were often the UK’s political allies in EU debates.
EU enlargement was not the only major success for British foreign policy. Both the institutional design of the EU’s Common Foreign and Security Policy (CFSP), and the substance of many of its policies, owe much to UK thinking.
Britain (with a small group of allies) won two important battles in the negotiations on the Maastricht Treaty. First, it saw off countries like Belgium and the Netherlands that wanted the EU’s new foreign policy to be dealt with in the same way as trade or the internal market, with the Commission having the right of initiative and decisions taken by qualified majority. Foreign policy remained intergovernmental, with the Commission having a limited role in its formation; and it continued to be decided by unanimity (with minor exceptions). The Lisbon Treaty created the European External Action Service, led by a High Representative who is also a Vice President of the European Commission; but even so, foreign and security policy remained an intergovernmental area, with decisions taken by unanimity.
Second, it ensured that any EU defence policy would be compatible with NATO. It thus thwarted the ambitions of France, Germany and others for a more independent European defence identity.2 Twenty-four years later, the new ‘Global Strategy for the EU’s Foreign and Security Policy’, endorsed days after the Brexit referendum, still takes a very British approach to EU-NATO relations, describing NATO as “the primary framework” for collective defence for most member-states and "the bedrock of Euro-Atlantic security for almost 70 years".
As to the policies the EU has adopted under CFSP, the UK has been extremely good at persuading the rest of the Union to sign up to British foreign policy priorities. In some cases, the UK was pushing at an open door. The UK, France and Germany all saw it as vital in the early 2000s to prevent Iran from developing nuclear weapons. In pursuit of that goal, they therefore worked together with the EU’s High Representative and with China, Russia and the United States, pressurising and talking to Iran. Finally, in July 2015, it agreed to give up the most threatening aspects of its nuclear programme. The Joint Comprehensive Plan of Action enshrining the agreement was one of the key achievements of EU diplomacy since CFSP began.
On other occasions, the UK had more interest in a particular issue than other EU member-states, but was nonetheless able to get them to agree on a common policy. Thus in 2002, the EU imposed sanctions on President Robert Mugabe of Zimbabwe and several of his associates, for human rights violations and electoral malpractice. The measures taken complemented political sanctions imposed by the (British) Commonwealth. Some EU countries joined the consensus reluctantly, but none was prepared to block measures which the UK strongly supported.
One of the oddest features of Britain’s behaviour as an EU member has been its involvement in law enforcement and judicial co-operation – an area to which it has contributed more than most other states, while having the right to opt in and out of individual measures.
Despite proposing in 1975 that EEC members should co-ordinate their efforts to fight terrorism and organised crime, Britain subsequently spent a lot of bureaucratic effort on carving out special arrangements for itself. When in 1985, as part of the establishment of the Single Market, other EEC members wanted to abolish border controls, the UK (with Ireland) refused, leaving the rest to establish the Schengen area.
For the Schengen countries, more police and judicial co-operation was a necessary accompaniment to free movement between them; as a 1999 article by Ben Hall for the Centre for European Reform put it, there was a “single market in crime” alongside legitimate economic activity.3 The UK could see the advantages of European countries working together in law enforcement and was happy to join in, on its own terms. In the Maastricht Treaty, it was able to ensure that ‘Justice and Home Affairs’ (JHA), like CFSP, remained an intergovernmental issue, effectively shutting out the Commission, the European Parliament and the European Court of Justice (ECJ). It supported the creation of Europol, the European Police Office, which grew out of a German proposal in the negotiations on the Maastricht Treaty – again, on the basis that it would be an intergovernmental rather than an EU body.
The 1997 Amsterdam Treaty permitted Britain to opt in and out of JHA measures on a case-by-case basis. In the Lisbon Treaty of 2009, which gave the ECJ jurisdiction over European police and criminal justice measures, the UK secured the right (which it exercised in 2014) to opt out of all the measures it had previously signed up to, and then opt back in to those which it thought were still in its interest.
Yet in parallel with this institutional manoeuvring, the UK was making EU law enforcement co-operation work to its advantage. The outstanding example of this was the European Arrest Warrant (EAW).4 The EAW came out of a 1998 proposal by then-Home Secretary (Interior Minister) Jack Straw to simplify intra-EU extradition; and the UK has used it extensively since it took effect in 2004. From April 2010 to March 2015, the UK sent 5,393 suspects to other member-states, and other countries surrendered 655 suspects to the UK for trial. The average time for extraditing a suspect fell from 18 months before the EAW came into force to 15 days (if the suspect did not contest extradition) or 48 days (if he or she challenged the EAW).
Britain has had considerable influence on the development of Europol. The current director, Rob Wainwright, is British. Though Europol is not a European FBI, it has become an important forum for member-states and third countries to share information, making a significant contribution to the fight against cross-border crime and international terrorism. It plays an important role in co-ordinating and supporting cross-border police operations that would otherwise be hard to organise – including multinational investigations involving countries like the US and Australia.
March for Europe, London, Taken on July 2, 2016. Original: https://www.flickr.com/photos/alexwhite/28018350346/
In every British success in Europe, however, there have also been the seeds of failure. The single market and QMV strengthened the Commission at the expense of individual member-states, which no longer had a veto on proposed EU legislation. Though this benefited the economic interests of the UK, and ensured freer trade in Europe, it led Conservative Eurosceptics to fear that the Commission wanted to create a ‘United States of Europe’. Margaret Thatcher’s 1988 Bruges speech, with its warning against “concentrate[ing] power at the centre of a European conglomerate”, became a founding text for this group, who began as a small minority within the Conservative Party but came to dominate it.
British ministers of both parties helped to strengthen the narrative that unaccountable officials in Brussels could impose unnecessary regulations on the British economy (a line pushed so frequently by the – largely Eurosceptic – British press that the EU delegation in London devoted a special blog to debunking false allegations). Even Tony Blair, the most pro-EU prime minister since Edward Heath took the UK into the EEC, called on the Commission in 2005 “to send back some of the unnecessary regulation, peel back some of the bureaucracy”. Very few were willing to say openly that an efficiently functioning single market, which would work in Britain’s interest, needed to be regulated at the European level, by a Commission with strong powers of enforcement. And the myth grew that the UK was constantly outvoted in the EU. The reality was rather different: from 2004-2009, the UK was on the ‘winning’ side in the Council of Ministers 97.4 per cent of the time. Even in 2009-2015, when the Conservative-led coalition government was more inclined to oppose EU rules, it was on the winning side 86.7 per cent of the time.5
EU enlargement, a huge success in ensuring an orderly transition from communism to democracy in Central and South Eastern Europe, also became a huge negative in the British debate on the EU. Eurosceptic media and politicians constantly hammered home the message that thanks to the EU the UK could not keep out poor immigrants from new member-states; pro-EU campaigners struggled to make the case that enlargement had made Europe a more stable place, and that migrants had contributed significantly to the UK’s economic prosperity. Indeed, Jack Straw, Foreign Secretary at the time of the 2004 enlargement, subsequently described the Labour government’s decision not to impose controls on migration at that time as a “spectacular mistake”.
In foreign policy, Eurosceptics ignored the benefits that the UK had gained by working to align other EU member-states with British priorities. Instead, they raised spurious fears that EU defence co-operation would lead to an EU army that would undermine NATO and the UK’s transatlantic ties. Yet the real priority for the US was that Europeans should do more for their own defence, whatever the institutional framework. The EU was much less of a threat to NATO’s primacy than falling defence budgets were.
In JHA, far from welcoming the successes of the EAW, Eurosceptics claimed that it led to innocent British citizens being handed over to countries with inferior judicial systems. The value of Europol as a co-ordinating body in the fight against terrorism was constantly downplayed. The threat of ‘open borders’, on the other hand, was frequently reiterated (even though the UK’s opt-out from Schengen meant that it did not have open borders, but did have access to Schengen databases on suspect travellers).
Commentators should not have been so surprised by the referendum result: decades of casual Euroscepticism from British political leaders and the media had given voters a false impression of what the EU meant for the UK. The anti-EU zealots won; but they could not have done it without the connivance of politicians who knew the truth about the value of EU membership, but found it politically expedient to sound like Eurosceptics. British ministers (like many of their European colleagues) had grown used to the idea that they could claim credit on behalf of the national government for economic success and other good things to which EU membership made a big contribution; and they could blame Brussels bureaucrats for necessary but unpopular regulations.
As long as the British people could only grumble about the EU, the tactic worked. But when David Cameron made the mistake of offering a referendum, he invited Britons to slay the EU monster that he and his predecessors had persuaded them existed. On June 23rd, that was what voters thought they were doing. Whatever happens now, the UK has only itself to blame.