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Introduction

Brexit Brief, published by the IIEA’s UK Project Group, covers developments in the on-going debate in the United Kingdom – and between the UK and the other EU Member States – on the UK’s negotiations over its membership of the Union.

The Brief seeks to provide up-to-date information on the progress and content of the UK re-negotiation and on relevant statements and policy positions – of key individual players, EU institutions, national governments, political parties, business interests and civil society actors.

The Brief is part of a wider communications programme covering the work of the IIEA’s UK Project Group – involving commentaries, speeches, texts and event reports – which will be highlighted on the Institute website.

Section One: Brexit State of Play

The CampaignWith three months to go to polling day on 23 June the referendum campaign in the UK is gaining momentum day-by-day. Media reports and commentary in the past month have highlighted issues including the impact on: economic forecasts; trade prospects; energy prices; health provision; the future of the car industry; agriculture and fisheries; protection of wildlife; water quality and air pollution; national security; the level of the UK budget contribution; the price of Easter eggs; and, courtesy of the London Mayor, Boris Johnson, the mythical EU restrictions on children under eight blowing up balloons and bans on recycling teas bags.

The unravelling of a key element in the UK Budget and the resignation from the Cabinet of the leading ‘Leave’ campaigner, Iain Duncan Smith, has revealed the depth of the divisions within the ruling Conservative Party and raised questions about the authority of both Prime Minister Cameron and Chancellor Osborne who are central to the ‘Remain’ camp. Much attention has been given to the Prime Minister’s remark that he needed ‘time to think’ as he left for an Easter weekend in Italy.

The Campaign Groups

It is instructive to look at the current state of play in the two campaigns.

The ‘Remain’ side is struggling to mount a clear and coherent campaign. Politically, the Conservatives are close to civil war on the issue, while the Labour Party’s strong policy position suffers from the fact that its leader, Jeremy Corbyn, lacks any conviction. The Liberal Democrats and Greens are marginal parties. And, most worrying for ‘Remain’ supporters the business community is so far much less vocal than had been expected, with many leading figures holding back for fear of antagonising shareholders or customers and a significant number actually supporting the ‘Leave’ camp. The ‘Remain’ case – apart from warning of ‘a leap in the dark’ - is intellectually strong but complicated and legalistic and subject to the old saying ‘If you are explaining you are losing.’ Apart from David Cameron and George Osborne there is no compelling public advocate.

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The ‘Leave’ side has the considerable advantage of a few, simple arguments or slogans that are immediately understandable: control our borders; make our own laws and stop paying large amounts of our money to Brussels. It is clear that the issue of immigration will be put at the centre of the ‘Leave’ campaign and that the migration and terrorism crises in continental Europe will play into the narrative. The question of the leadership of the ‘Leave’ side is still undecided and potentially damaging divisions exist, not least in respect of the role of Nigel Farage in the campaign. The Vote Leave group has been strengthened by the arrival of six senior Tory Ministers, notably Michael Gove and Iain Duncan Smith. Gove, and the Labour Party MP. Gisela Stuart, once nominated by Tony Blair to the Praesidium of the European Convention, have been announced as joint heads of Vote Leave with Boris Johnson taking a key role.

Opinion polling on the referendum continues to point to a close result. The Financial Times ‘Brexit Poll Tracker’ for 20 March 2016 puts support for the two sides at Stay- 45% and Leave- 40% with 15% undecided. The Daily Telegraph Poll tracker for 25 March 2016 puts support for the two sides at Remain - 51% and Leave - 49%. A study of recent polls by NatCen Social Research also shows that 51% favour the UK remaining in the EU with 49% supporting Brexit.

In Ireland

The UK debate is followed with increasing interest and concern in Ireland, South and North, reflecting the conclusions of a recent Irish Times op-ed that “a Brexit decision would disrupt relations with our large neighbour, make the Irish border into the EU one and change the European playing field to Ireland’s disadvantage.” A number of Irish and British reports have suggested that Brexit would have negative effects on the Irish economy and would complicate cross-border relations on the island. Seminars on this have been organised and commentaries produced by the Institute of International and European Affairs, European Movement Ireland, the British-Irish Chamber of Commerce and other bodies.

The Sinn Fein Deputy First Minister, Martin McGuinness, has called on the British government to commit to holding a border poll on the reunification of Ireland in the event of a Brexit. “If there is a vote in Britain to leave the EU there is a democratic imperative to provide Irish citizens with the right to vote in a border poll to end partition and retain a role in the EU.”

The House of Commons Northern Ireland Committee is continuing its comprehensive investigation of the implications of a possible British Exit from the EU, holding hearings both in London and Belfast.

Section Two: The Evolving Debate

Business

The Confederation of British Industry will make the economic case for the UK to remain in the EU, following the publication of a new member survey. The survey, by ComRes, reveals that 80% of CBI members, including 71% of small and mid-sized business members, believe that the UK remaining a member of the EU would be best for their business. Overall, just 5% say it is in their firms’ best interests for the UK to leave the EU, with 15% unsure.

On 26 March, Vote Leave published a list of 250 business leaders who support Britain leaving the European Union, seeking to counter the impression that most major companies support the ‘Remain’ campaign. The list of 250 does not contain any FTSE 100 chief executives or chairman. A Business Council has been established by Vote Leave to bring together entrepreneurs and company leaders who favour Brexit. The Council will be chaired by John Longworth who resigned as Director General of the British Chamber of Commerce.

SecurityThe terrorist outrages in Brussels have led to an intensified debate in Britain on the issue of security which had been advanced by Prime Minister Cameron and Home Secretary May as a central argument for continued EU membership.

Responding to the news from Brussels, UKIP’s Nigel Farage spoke of the Schengen rules leading to “free movement of terrorists, criminal gangs and Kalashnikovs.” The former head of MI6, Richard Dearlove, claimed that leaving the EU could boost British security and a former CIA director, Michael Hayden, argued that the EU “in some ways gets in the way of security services.” David Cameron criticised Farage for using the Belgian crisis to further the Brexit case and Theresa May said that there were good security policy reasons for staying within the EU. The Head of Europol, Rob Wainwright dismissed the Dearlove arguments as not standing up to scrutiny and insisted that intelligence sharing within the EU-based organisation was vital.

As an independent forum, the Institute does not express any opinions of its own. The views expressed in the article are the sole responsibility of the author.

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National Health Service

The Telegraph reports that Vote Leave will put the National Health Service at the heart of its campaign as the referendum on Britain’s membership of the EU approaches: “Polling suggests that the majority of people believe that the NHS could improve if Britain leaves the European Union, and those supporting a Brexit believe it could be one of the defining issues of the referendum.” Health Secretary Jeremy Hunt, meanwhile, argues in an article for the Observer that a vote to leave the European Union would mean less money for public services like the NHS.

Voices in the Campaign

Addressing the House of Commons Treasury Committee on 8 March, the Governor of the Bank of England, Mark Carney, has described the prospect of leaving the EU as “the biggest domestic risk to financial stability because, in part, of the issues around uncertainty.” He said that the Bank’s concerns about membership of the EU were put to rest after David Cameron’s Brussels deal.

The Archbishop of Canterbury, Justin Welby, has called on ‘Leave’ campaigners to set out what an exit from the EU would mean for the country and what a post-Brexit Britain would look like.

Three major British environmental NGOs – Friends of the Earth, The Wildlife Trusts and Greenpeace - have entered the campaign with statements strongly backing continued EU membership. These initiatives have led to complaints from Brexit advocates that the NGOs are in breach of the rules governing the behaviour of charities in political debates.

The UK Green Party launched its campaign for ‘Remain’ pledging to mobilise its supporters to run ‘a bold, positive campaign that celebrates what the EU has given us.’

Section Three: Relevant Research and Events

Economic Research

Five economic research organisations have produced reports on the implications of Brexit: The Centre for Economic Performance at the London School of Economics; CBI/PwC; Oxford Economics; ING Bank; Moody’s Investor Service. A Financial Times summary of the first three reports states that “all suggest that leaving the bloc will have a significant cost […] although under

certain assumptions, those costs can be contained.” For the CEP/LSE drops in trade with the EU “is likely to cost the UK far more than is gained by lower contributions to the EU budget.” The CBI/PwC report argues that leaving the EU “would cause a serious shock to the UK economy.” The ING study concludes that Brexit raises clear risks for trade and investment and, by implication, growth and jobs, but that a favourable trade deal might stabilise and improve the situation.

These reports have been criticised by both Vote Leave and Leave.EU as ‘skewed’ to produce negative results. Matthew Elliott, Chief Executive of Vote Leave, said: “The EU funded CBI are desperate to recreate the same scare stories they spread when they urged Britain to scrap the pound and join the euro. They were wrong then and they are wrong now. If we want to take back control and strike the kind of free-trade deal the CBI refuses to even consider, the only safe option is to Vote Leave.’

Conservatives for Britain ‘Budget’

The CfB group has produced a ‘budget’ showing how a future Conservative government could use the £19 billion EU contribution “to end austerity.” The £9 billion currently returned to the UK in services and rebate would enable the government to guarantee existing funding to farmers, research, universities and regional development. The remaining £10 billion could be allocated to health policy areas such as disability benefits, recruitment of doctors and nurses, social care, medical treatments; and to reduction or abolition of VAT on domestic energy, Council Tax and Stamp Duty. John Redwood argued that “instead of sending billions abroad every year we should spend that money on improving our NHS and helping families […] that’s why the safer choice in this referendum is to Vote Leave.”

Publications and blogs

A British departure from the EU would have major consequences for Ireland

Paul Gillespie, co-author of the IIEA book Britain and Europe: The Endgame, writing for the London School of Economics, makes the case that a Brexit could be highly disruptive for Ireland, and would likely have a particularly large impact in Northern Ireland, where the issue of Irish unity could be pushed on to the public agenda.

As an independent forum, the Institute does not express any opinions of its own. The views expressed in the article are the sole responsibility of the author.

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IIEA Senior Fellow, Tony Brown has contributed a number of recent blogs to the IIEA website, including:

New Policy Papers from UK Government

An assessment of the new series of Policy Papers published by The UK Cabinet Office. The papers deal with aspects of the evolving referendum debate.

The Evolving Debate in Northern Ireland

A review of the Brexit debate in Northern Ireland, which has begun to garner more attention in light of visits by a growing list of high visibility campaigners and increasing engagement from stakeholders.

The Curious Incident of the UK Competences Review

The UK competences review was seen as a key element of the evolving UK debate on EU membership culminating in the ‘in/out’ referendum on 23 June 2016. Today, however, the initiative is notably absent from the UK’s Government discourse on Europe.

Recent Events

Irish4Europe, an initiative by Irish-born, UK-based business leaders, was launched on 10 March 2016 with the aim of mounting a campaign to persuade the 400,000 Irish residents of the UK with a vote in the referendum that staying in the European Union “is good for Europe, good for the UK and good for Ireland.” Reporting on the launch, the Irish Times commented that “among the arguments they should weigh is that Brexit will not only hurt Britain but Ireland too. Their country needs their support.”

Charles Grant, Director of the London-based Centre for European Reform addressed the IIEA on 8 March 2016 on The UK Referendum and its Consequences. More information about the event can be found on the IIEA website.

Paul Drechsler, President of the Confederation of British Industry addressed the IIEA on 19 February on the topic of The British Business Vision for a Reformed EU. A transcript and audio from the event can be found here.

Paul Gillespie, co-author of the IIEA book Britain and Europe: The Endgame addressed a seminar on Brexit at the Fondation Jean Jaurès in Paris on 10 March. Other speakers at the event included Senator Hélène Conway-Mouret, and Harlem Désir, French Secretary of State for European Affairs.

The British-Irish Chamber of Commerce held a conference in London on 15 March 2016, addressed by the former Northern Ireland Secretary, Peter Mandelson. Lord Mandelson said the debate over Brexit was a debate over the future composition of the UK, claiming that Brexit would “irrevocably reorder the United Kingdom”.

Section Four: Background Material and Further Reading

UK Government Policy Paper. The Process for Withdrawing from the European Union. (www.gov.uk/Government/publications)

UK Government Policy Paper. Alternatives to Membership: Possible Models for the United Kingdom outside the European Union. (www.gov.uk/government/publications)

UK Cabinet Office. EU Referendum – Guidance for the Civil Service and Special Advisers, 23 February 2016. (www.cabinetoffice.gov.uk)

University of Edinburgh. The View from the Continent: What people in other member states think about the UK’s EU referendum. Report by Applied Quantitative Methods Network. (www.ed.ac.uk/news/2016/europebrexit)

London School of Economics / Centre for Economic Performance. Life after BREXIT: What are the UK’s options outside the European Union? PAPERBREXIT01. (www.cep.lse.ac.uk)

London School of Economics / Centre for Economic Performance. The consequences of Brexit for UK trade and living standards. PAPERBREXIT02. (www.cep.lse.ac.uk)

Confederation of British Industry PwC Report: Leaving the EU: Implications for the UK economy. (www.cbi.org.uk)

Conservatives for Britain Brexit Manifesto. How the first Brexit budget can end austerity. (www.conservativesforbritain.org)

Oxford Economics Assessing the Economic Implications

As an independent forum, the Institute does not express any opinions of its own. The views expressed in the article are the sole responsibility of the author.

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Moody’s UK and EU: Brexit Presents Modest and Manageable Credit Challenges for Exposed Issues. (www.modys.com/researchdocumentcontentpage.aspx?docid=PBC_1017997)

ING Bank Mapped: how the Eurozone will suffer after a Brexit. (www.ing.com)

Susan Hayes Culleton. ‘How Valid are These 4 Popular Arguments for Brexit?’ The Positive Economist, 21 March 2016. (www.thepositiveeconomist.com)

The Guardian Britons and Europe: the survey results. Guardian/Observer, 20 March 2016. (www.theguardian.com)

Michael Gove. ‘Why I’m Backing Brexit.’ (www.blogs.spectator.co.uk/2016/02)

Irish Times Brexit Campaign: The Illusion of Sovereignty, 22 February 2016. (www.irishtimes.com/opinion/editorial)

Paul Gillespie ‘A British departure from the EU would have major consequences for Ireland.’ (www.blogs.lse.ac.uk/europpblog)

Roger Liddle. From Project Fear to Project Hope. Policy Network, 11 February 2016. (www.policy-network.net)

Charter Group. Proposals for a New Settlement for the United Kingdom in the European Union, 16 February 2016. (blairhoran@gmail.com)

Andrew Duff Britain’s Special Status in Europe. Policy Network Paper, March 2016. (www.policy-network.net)

Further Reading

Andrew Duff Reforming the European Union. Sweet&Maxwell / Federal Trust

David Owen Europe Restructured. The Eurozone Crisis and its Aftermath. Methuen

Julian Priestley & Glyn Ford (eds) Our Europe Not Theirs. Lawrence & Wishart.

David Begg Ireland, Small Open Economies, and European Integration. Lost in Transition. Palgrave MacMillan

Anthony Giddens Turbulent and Mighty Continent. What Future for Europe? Polity Press.

Stanley Henig (ed.) Federalism and the British. The Federal Trust.

Zizek & Horvat. What Does Europe Want? The Union and its Discontents. Istros Books.

As an independent forum, the Institute does not express any opinions of its own. The views expressed in the article are the sole responsibility of the author.