Winner of the New Statesman SPERI Prize in Political Economy 2016

Friday, 3 February 2017

Stories MPs tell

It is not true to say that the UK holds a referendum only when a big constitutional decision has to be made. We hold a referendum when the ruling party has deep internal divisions on an issue which the Prime Minister needs to put to bed. Our first referendum in 1975 was not held on whether we should join the EU (that happened two years earlier), but because the new Labour government was divided on the issue. Cameron held a referendum to appease those who wanted to leave in his own party. In both cases the rebels did not really believe in some deep right for the people to decide on these issues, but because they knew they could not win in parliament and stood more of a chance in a referendum.

There was a key difference between the two referendums. In 1975 it was pretty clear what both staying in and leaving meant. In 2016 leaving the EU could mean many things. This was a major weakness: it is like having a referendum on whether taxes should be cut without any information on what bits of government spending would be cut as a result. One of the many mistakes Cameron made was not to force his rebel MPs to come up with a common programme explaining exactly what leaving the EU would mean. As a result, many of the main Leave campaigners assured us it did not mean leaving the Single Market, even though they now say that is inevitable.

Given that, and the uncertainty over what the EU might be prepared to agree to, it is absolutely reasonable to hold another referendum, once the terms are clear, on whether we should accept these terms or Remain. Yet it is noticeable that Leavers are adamant that such a referendum should not be held, and continue to insist that the first vote is all that is required. This shows that they have no real respect for the ‘will of the people’ at all. They have got what they wanted, and want as little democratic interference in how it is done as possible.

The strongest arguments I have heard in recent days from Remain MPs for voting with the government have come from Conservatives. They have said that they promised voters that the referendum would not be advisory but would determine their vote. It is understandable that they would want to keep their promise. But leaving the EU could mean many things. They never promised to give the Prime Minister the right to decide how we leave. It would not be beyond the wit of these politicians to organise with others to vote to stay in the Single Market. As far as I can see no such attempt has been made by these MPs.

Indeed I think future historians will puzzle over this. Given that the referendum was only about leaving and not how to leave, was so close, and the majority of MPs want to Remain, why didn’t parliament simply agree the least harmful way of leaving, which is the Norway style option much discussed before the referendum? Of course that is obviously worse than being in the EU because you lose your right to help decide issues, but to use that as an argument for not doing it is nonsense. It is like deciding you have to go over a cliff edge, and there are two options: scrambling down to a ridge or jumping to the bottom. You note that scrambling would be uncomfortable so decide to jump instead. Or more formally, if A>B and B>C, you don't do C because A>B. 

The arguments of Labour MPs were much weaker. You are under no obligation to follow your constituents, particularly as you know much more about a subject than most of them do. That is not arrogance, but our system of government called representative democracy. One argument I heard was that voters would lose faith in democracy if parliament did not follow their lead. I would turn that around and say it would be a good lesson in what a representative democracy means. And if you respond that voters would not see it that way then you are either arguing that they are too dumb to do so or our media is incapable of making that distinction, both themselves excellent arguments for representative democracy.

In this recent post I included some lines by Winston Churchill on the duties of an MP. I was going to elaborate on that a bit, but the post was already too long, so I did not. Let me do so here. Suppose, for some reason, we had held a referendum in 1936 about whether we should rearm or not. It seems quite likely that the people would have voted No. The Daily Mail will have told its readers how Hitler was our friend, and that his bark was far worse than his bite, but the costs of war were too painful for most. Would we really have wanted MPs, like Winston Churchill to have felt bound by that referendum?

If you say that back then the facts changed, it means you have not taken Donald Trump seriously. To have a remote chance of getting trade deals that could partially compensate from the lack of access to the EU, we need good deals with China, India and the US. China has already said that leaving the EU makes us a lot less interesting as a country to do business with. India wants more freedom of movement of people as part of any deal. Liam Fox now says that is something we should seriously consider, but it is incompatible with the goal that is driving all of May’s actions - reducing immigration. Which leaves the US, which under Trump is focusing on reducing its trade deficit with countries where it runs a large deficit - like the UK. So a deal could be done, but is it likely that we would benefit?

All this means there were plenty of valid reasons for not voting to trigger Article 50, or at the very least of not giving away any chance of determining what sort of Brexit we have. What seems to have swayed too many MPs is the perception that whatever entirely reasonable reason they may have had for not triggering Article 50 right now, the perception would be that they were acting against the ‘will of the people’. 

So much of the Brexit process has been about perceptions of reality rather than reality itself. Perceptions that immigration reduces access to public services, when the opposite is true. Perceptions that leaving the EU would give us more money to spend on the NHS, rather than less as we are now finding out. And perceptions that Turkey was about to join the EU. But above all else, if you believe the Ashcroft findings, a feeling of a loss in sovereignty. Here feeling is not my word, but from the White paper the government released yesterday. To quote (para 2,1):
"Whilst Parliament has remained sovereign throughout our membership of the EU, it has not always felt like that."

Now where would all those misperceptions have come from?  


  1. The referendum that Cameron called had one goal, to kill Labour, and it worked just like the Scottish Independence poll. Whether this one will break up the UK remains to be seen

  2. Maybe MPs should email their constituents with the main options available, hold town hall and village hall meetings, and knock on some doors and get householders to fill in questionnaires?

  3. I find your argument in favour of a second referendum unconvincing. If this was allowed and the result was "No" this would mean presumably: "go back and get a better deal". But suppose no better deal is forthcoming? Where does that leave the process and the original decision to leave? In some considerable difficulties would be my answer. Now I don't believe that this is actually what you want but you do see the difficulty here. Where does this actually end?

    Furthermore you seem to imply that a second referendum is to decide the how and, in effect, the least harmful way of exiting the EU. To me you seem to imply that the government cannot be trusted to act in our best interests in getting as good a deal as possible. Frankly I find this odd as I always assumed that whatever government we have acts in our best interests and if you think otherwise then there is a great deal more than Brexit to worry about.

    1. I think the second referendum has to be do you want to take this deal and leave or remain a member i.e. to revoke A50.

  4. Keep voting until you give us the right answer proles! Better yet, leave it us and trust us to know what's best for you.

    1. So why are you so against a second referendum, when we will all know what the final deal will be? Perhaps you are afraid 2% of people will change their mind.

  5. "The Daily Mail was telling us that Hitler's bark was far worse than his bite"

    I've often wondered if, by the mid-1930's, Rothermere was beginning to hedge his bets on the Daily Mail's support for Hitler. In 1934 he put some some serious money behind the design of an aircraft prototype that, around three years later, became the Bristol Blenheim bomber. What was unique about the prototype was its modernity and its high speed: it formed the basis of designs on which British aircraft relied in World War 2.
    It was a massive (private) investment by Rothermere into a design which was of major help the Britain in the war. It helped, of course, to divert the public's gaze away from his newspaper's support of Hitler.
    Nowadays the Daily Mail is punctilious in supplying its readers with even-handed reports on the EU....

  6. Stories academic economists tell
    People are perfectly rational
    everyone has symetrical information to buy or to invest
    banks loan out reserves
    Increasing reserves by QE will increase credit
    All we need is to lower inflation and everything will be ok
    our grandchildren will have to repay public debt
    Free trade benefits everyone but we will trade only in our money not in yours

    1. Except they don't. You only imagine they do because you have a rather limited understanding of economics.

  7. In my comment about Rothermere's major financial backing for the prototype which eventually became the Blenheim bomber I misquoted an extract from SWL's article. the quote should have read:

    "The Daily Mail will have told its readers how Hitler was our friend, and that his bark was far worse than his bite..."

    I really shouldn't post when I'm really tired.

  8. Well, perceptions of reality (which much of the Brexit process has been about) are a huge part of reality.
    Social reality is largely a creation of language, of descriptions of presumed 'reality' that 'perform' to create the reality that we experience.

    That UK referendums are not held because of big constitutional have to be made, but because of divisions within the ruling elite squares nicely with the PhD research outcomes of Saskia Hollander, a colleague of mine.
    Her thesis (defended December 2016) is titled "The people or the prince. The politics of referendum use in European democracies".
    Her summary conclusion: "Rather than reflecting the direct power of the People, most referendums in EU countries are held by, and serve the interest of, the political elites, most notably the executive - i.e. the Machiavellian Prince."
    Her book (only published small-scale) "places political agency as central to referendum research. It argues that referendums are called because political actors have an interest in doing so, and that their interests rarely match the justifications given in the public debate. Instead of being driven by the need to compensate for the deficiency of political parties, political actors use referendums primarily to protect the position of their party."

  9. This is being disingenuous. Of course Parliament is sovereign but if it chose not to implement EU laws then ultimately the EU would decide the UK was not abiding by its treaty obligations and take action. A simple example, if the UK exerted its sovereignty and chose to stop free movement do you really think the EU would stand idly by and do nothing?

    1. After the vote, it might have been sensible to see if other member governments might have been more flexible on FoM. May did not try. And what about the sovereignty we would lose in any trade deal with US?

  10. Can it not be argued that Labour Remain MPs can delay voting against the Government until the final stage, when they should only vote in favour of amendments such as NC99 and otherwise against?

  11. What the 48% sometimes forget is that millions of people lived under the EU flag and were outraged about it. The anger and sadness that the 48% feel now is a pale reflection of the anger and sadness felt by the 52% who had to accept EU membership and the associated democratic deficit.
    It is a rare thing for a country to be able to reshape its destiny. We must move forward together with hope and determination. If, in twenty years or so, we want to apply to rejoin, then so be it. We are a democracy after all. Now though, is the time to leave.

    You cannot leave the party whilst at the same time remaining in the bathroom. Get out of that front door and take your chances in the cool night air.

    1. You have no right to talk about pale reflections. You really think your anguish over lack of sovereignty compares with how those born in other EU countries living and working in the UK currently feel, or how UK citizens who are making a life in other EU countries feel?

    2. There's also the minor detail that whatever anguish Europhobes felt over the EU's democratic deficit was entirely self-inflicted, since no such deficit exists.

    3. That's the fault of the EU for not guaranteeing their rights.

  12. Interesting read, particularly the points about the nature of referendums.

    With regards to US-UK trade, you make the suggestion that a beneficial deal would be unlikely due to the Trump administration's desire to reduce its trade deficit. But I think that won't be the only influence on their thinking, and maybe not even their main concern.

    With the proposed US ambassador to the EU comparing his task to bringing down the Soviet Union, it follows that Trump will have to weigh up the impact of a sweet deal for the UK on the US trade deficit versus its effect upon the position of those groups which favour their respective countries leaving the EU. The better terms the UK gets the stronger those groups will be. I'm not in a position to speak about most of those groups, but if UKIP and Farage can safely be taken as proxies then it can be reasonably assumed that they represent the kind of Europe that Trump would much prefer to work with.

    (On which note, it will be interesting, from a safe distance, to see how the US reacts to the forthcoming next stage of Greece's bailout. Should it prove to be forthcoming at all. With Grexit already a real possibility, if Trump's aim really is to bring down the EU then we can expect the US to make every offer possible to Greece to make it a reality. At the same time, Tsipras has to represent the least likely post-EU faction I can imagine Trump wanting to have to deal with, assuming he can remain in power. It could conceivably end up with Trump in two minds and simply trying to exacerbate the conflict between Greece and the EU in the hope it will spread and bring the whole thing down. Which unfortunately is what he's best at).

    Back on topic, Trump has stated that the UK would "not be at the back of the queue", as under Obama, who was trying to keep the EU together, and his commerce secretary has reportedly made securing a trade deal between the US and the UK one of his top priorities. So for me the question of which priority will win out is still open, though it should be pointed out that driving home the last few nails into the EU's coffin is a rather large goal, versus the UK's share of the US trade deficit, reducing which could only contribute a portion towards achieving that aim.

    At the same time, given the rapidly expanding number of countries the Trump administration seems intent on picking a fight with, and Theresa May's kowtowing, if Trump has any concerns about not alienating absolutely everyone then that shouldn't hurt any terms either. Granted, that does depend upon the UK's willingness to not just clutch at whatever's offered out of desperation.

  13. You're absolutely right about Cameron's ineptness. The referendum should have been yes or no on a draft bill specifying the exact terms of Britain's departure. This is elementary triangulation - Brexiters both in parliament and populace would have split over it.

    This was exactly the strategy pursued by the Australian PM in 1998 when faced with majority support (still extant, BTW)both in parliament and populace for becoming a republic. He forced proponents to specify proposed constitutional details, on the calculation that there was a plurality, but not a majority, for no republic. So it was just a simple matter of forcing a split in republican ranks ...


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