How Scottish Independence has become entwined with Brexit

 

Introduction

Brexit is the main reason the SNP give for wanting another referendum so soon after the last. While an independent Scotland as part of the EU would enjoy a larger single market than it enjoys as part of the UK, leaving the UK’s single market would impose short term costs almost certainly greater than the costs of Brexit. The government that enacted Brexit refuses to allow another independence referendum. A future Labour government might be less inclined to deny the Scottish people any say on independence, but that government could also start a process that would undo much of the harm caused by Brexit.

With Conservatives in power independence involves short term pain and long term gain

I cannot comment on the legal reasoning that lay behind the Supreme Court ruling that a referendum on Scottish Independence would be illegal without the cooperation of the UK government. (On that, see Dave Allen Green here and here.) However I cannot defend the decision of the UK government to refuse a referendum, or any law that says this is sufficient to prevent a referendum on independence.

The UK government’s reason to refuse another referendum is that it is too soon after the last one. But the reason that the SNP give as justification for pushing for it is Brexit. In a very important sense they are right. Not only did Scotland not vote for Brexit, and the economic damage it is doing, but Brexit gives the SNP’s claim that the economic future will be brighter after independence something beyond mere wishful thinking. The EU Single Market is a lot bigger than the UK’s Single Market.

I wrote about this four years ago here. There is no doubt that in the short term Scottish Independence will be very costly for the people of Scotland. In 2014 the only real economic compensation on offer was that different governance after Independence would bring a fairer but poorer society. So the economic trade-off independence offered was clear and certain short term pain set against the hope of possible long term benefit. But if Scotland was part of the EU’s Single Market and Customs union, it could eventually avoid the long term pain that Brexit will bring the rest of Great Britain.

But there is a counterpoint to that, which is that when Scotland does join the Single Market and Customs Union, they will have the considerable short term pain of creating a border with their largest market: the rest of the UK (rUK). That is in addition to the cost that dominated the 2014 referendum, which was the loss of the fiscal transfer from the rUK to Scotland. Scotland might still be better off in the long run, as its exports reorientate from rUK to the larger EU market, but that takes decades to happen.

So in terms of the economics, what was in 2014 a trade-off between certain and pretty large costs in the short run versus the hopeful possibility of benefits in the longer term becomes much larger and still certain short term costs against more tangible long term [1] benefits of being part of the EU. Adopting the Euro also carries clear risks as long as the Eurozone’s fiscal rules remain a mess.

However the prospect of a Labour government changes that trade-off in a critical way. To see why, it is useful to first talk about inevitable Brexit stasis under the Conservatives.

Over the next decade at least, only one party can reduce the costs of Brexit

In the last few weeks there have been two changes that represent a turning point for Brexit. The first was the humiliation of Prime Minister Truss, coupled with her successor being chosen by MPs alone. Truss was the candidate of the Conservative party’s European Research Group (ERG), who have consistently pushed for the most extreme form of Brexit. The second is that we are finally seeing across the broadcast media discussion of the costs of Brexit. With the UK economy being alone among the G7 in failing to regain output levels seen before the pandemic, and about to go into recession, it just wasn’t possible to avoid the subject any longer.

But last week it also became clear (if it was ever doubted) that the Conservative government cannot change the Brexit deal that Johnson agreed in 2020, because it is hopelessly divided. The ERG may have lost their leader with the downfall of Truss, but they are still powerful enough to stop any attempt to change that deal. Leaks suggesting the government were looking for a Switzerland type deal have been met by a chorus of denials from ministers and Sunak himself. Given the party’s terrible position in the polls, and a general election not that far away, Sunak cannot afford to risk the internal division that any attempt to rewrite Johnson’s deal would cause. The best we can hope for is that he is able to come to an agreement with the EU on the Irish protocol.

Nor would anything change if he was able to win that General Election. Not only has he to pacify the ERG, both the right wing press and his party members remain solidly pro-Brexit. Even if that was not enough deterrent, there is the ever present threat of Farage or someone similar threatening to take Tory votes and even some Tory MPs. All this means that for the next decade at least, no progress in reversing the economic and political harm caused by Brexit can be made while the Conservative party is in power.

So just as a Conservative government will not allow another independence referendum, it will also do nothing to alter the heavy costs of Brexit that the UK is experiencing.

However we now have the strong prospect of a Labour government. In opposition Labour have been extremely cautious. The last thing they want to do is unite a divided Conservative party and revitalise the right wing press in labelling Starmer a rejoiner. With polls like this, it is far safer for him to talk about improving relations with the EU, without being specific about how that would be done. With the Conservatives offering nothing, while Labour offer hope, only Remain voters who have learnt nothing from 2019 would refuse to vote tactically against the Conservatives.

Once in government, however, the trade-offs for a Labour government will change. It will become clear that the economic gains from a closer relationship with the EU while still outside its customs union and single market are pretty small. Labour will become responsible for the health of the economy, and just as the costs of leaving the EU are now becoming clear, so will the economic benefits become clear of rejoining the EU’s Custom Union and particularly their Single Market. The political risk of doing either noted above will still be there, but they will diminish in size over time. For both reasons, becoming part of the EU’s single market will become more attractive over time, and the pressure on Labour to move in that direction will only grow.

Brexit has encouraged independence, but could also mean it fails

Brexit was missold to the UK. Almost everything the Leave campaign said was a lie. Saying there would be no economic costs and only benefits was a lie. Saying there would be more money for the NHS was a lie. Saying UK trade would flourish under ‘global Britain’ was a lie. Saying we could negotiate trade deals more advantageous to the UK was a lie. Saying prices would fall was a lie. Saying immigration would be lower was a lie. The list is endless. Whenever evidence that these were lies was put into the public domain during the referendum campaign Leavers had a simple response: they called it Project Fear. Project Fear became synonymous with don’t worry about the facts, just believe the lies.

But the term Project Fear did not originate with Brexit, but in the first Scottish Independence referendum. The short term fiscal costs of independence were large and undeniable, yet the Yes side, like Leavers, preferred to use denial and misdirection rather than acknowledge this fact. As with the Brexit referendum, they could get away with this because what was being proposed had not been done before. [2]

However the similarities between Brexit and an independent Scotland joining the EU are too great and too recent to dismiss as Project Fear. Leaving the EU’s Single Market has caused the UK significant economic loss, and there is every reason to expect that Scotland leaving the UK single market would cause even more in the short term. In the long term firms in an independent Scotland that was part of the EU would have a larger market, but it takes considerable time to reorientate firms from one market to another, including the time and costs involved in persuading that new market that you have something worth selling. That time period will at best involve Scottish firms producing less and employing less people, and at worst it means these firms might no longer exist.

It will be very hard for the proponents of Scottish Independence to on the one hand give Brexit as a key reason for wanting independence, and on the other hand to deny the costs of leaving a large single market on which Scotland is currently so dependent.

If the independence referendum had taken place under a Conservative led UK, then the UK government would have been in a bind, because it would not want to point to Brexit as evidence of the short term costs of leaving a single market. [3] But we now know that will not happen, because a Conservative government will not allow another independence referendum.

A Labour government would be less inhibited, but could still face difficulties if it was trying to pretend it could make a success of Brexit. As long as it stayed doing that for fear of opposition from Leavers, it would find it hard to fight an independence referendum and would therefore be disinclined to grant one. However the moment a Labour government became committed to seriously undoing parts of Brexit (by joining the EU’s single market, for example), the case for a second Scottish independence referendum becomes much weaker.

It would become weaker because Brexit could no longer be used as a justification for another referendum. But it also becomes weaker because the long term gains of an independent Scotland as part of the EU having a larger single market also disappear, because these gains could be had by staying in the UK. Finally, using Project Fear to discount the short term fiscal costs of independence becomes weaker because Brexit has discredited that form of defence.

Brexit has given Scotland a reason for having another referendum, and has also given some credibility to the long term economic future being brighter after independence. Unfortunately for those advocating independence, those arguments only work if Brexit in its current hard form is permanent. That would be the case for at least a decade if the UK is led by the Conservatives, but the Conservatives will not allow a referendum. The UK under Labour might, but it would only be wise to do so if that Labour government could admit that any hard Brexit is bound to bring large economic costs. A Labour government that was seeking to rejoin parts of the EU would severely undermine the case for another independence referendum. Thus Scottish independence and Brexit have become inextricably intertwined.

[1] Here long term means a few decades at least before there is any chance of the benefits of EU membership exceeding the costs.

[2] Some have suggested that the short term fiscal costs of independence could be overcome if an independent Scotland had its own currency. Then, it is claimed, having a large budget deficit would not be a problem , because all the new Scottish central bank needs to do is create the money equivalent to the previous transfer from the rUK. Because there would be no greater claim on Scottish resources, it is argued there would be no inflationary pressure.

This ignores the fact that an end to the rUK transfer doesn’t just create a budget deficit, it also creates a current account deficit. At present Scotland is consuming more goods and services than it produces because of the transfer. The rUK is financing both a Scottish current account deficit and a budget deficit. There is every reason to believe that this Scottish current account deficit is not sustainable (the private sector would not replace the rUK transfer by capital inflows), and so the Scottish real exchange rate would depreciate on independence.

That depreciation would help Scottish exports and diminish its imports such that the current account became sustainable. However a depreciation means a reduction in the purchasing power of Scottish consumers, making everyone in Scotland poorer. Higher exports and lower imports also means a larger demand on Scottish resources, creating inflationary pressure.  

[3] In many ways we may see a repeat of 2016, where Cameron having set immigration targets and having failed to meet them, left himself wide open to claims that immigration can only be controlled by ending free movement. The obvious retort that immigration was good for the economy was not open to him. The Brexiters, having created a customs border between Great Britain and the EU, will find it hard to wax lyrical about the harm an English/Scottish border will do.

The political economy and psychology of COVID rebounds

You can call it a second wave, or a resurgence of the first wave. But whatever you call it we are seeing in some European countries a steady (and occasionally rapid) increase in new cases after a longer period when new case numbers have been coming down or been stable.

A good reason to not call this a second wave is that the first wave never went away. Changing social behaviour, aided by government support and a lockdown, reduced new case numbers rapidly. However governments relaxed the lockdown before new cases fell to almost zero, and so domestic transmission continued at a low level. But why have the number of new cases started increasing in the last few weeks in many countries, after a period of apparent stability?

The simplest answer to this question is why shouldn’t they. The natural development of the virus is to create an explosive increase in cases. The first wave didn’t come near to creating herd immunity, so if people started to behave as they did before the virus emerged a second explosion is the inevitable result. What governments and those advising them must have hoped is that

1. social behaviour had been sufficiently scarred by the pandemic that people didn’t relapse into pre-virus behaviour, and instead that they continued to social distance, wash their hands etc

2. changing social behavior was sufficient on its own to keep R at or below one, even though the economy returned to normal, and most social restrictions had lapsed.

3. the country’s track, test and isolate (TTI) technology was good enough to deal with any local outbreaks.

Even if (b) and (c) are correct (and there is no certainty they will be), there is the danger that (a) is a function of the length of time since the initial pandemic. This will be true particularly for an age group where the virus is much less of a personal threat. It is therefore quite possible that the economy remains depressed because a large group of people worry about resuming their previous levels of social consumption, and at the same time another group of people are happy to forget about the pandemic altogether.

Another factor that may account for the recent pick up in new cases is the increased social mixing that generally comes from taking holidays. Someone who has an asymptomatic case of COVID-19 could possibly infect not just their usual social circle, but also all the people they meet on holiday. Such cases, because they transcend local areas, may be more difficult for TTI to deal with.

Why were governments so keen to end the lockdown? The political economy here is pretty obvious. Governments are under pressure from business, together with individuals.who fall through or are substantially disadvantaged by the government’s support apparatus. Because social consumption is such a large part of the economy, this pressure from social consumption sectors can be intense. For the holiday industry, almost a whole year’s business may be lost over a few summer months.

In addition governments start worrying about the cost of the support they are giving. Just the hint that the current level of support may be reduced is also enough to get individuals and businesses putting pressure on governments to relax the lockdown as soon as possible. National Treasuries may add to that pressure. Finally there is the ideology of neoliberalism, which can elevate the economy to become an entity that is more important than the people within it. That influence is very clear in the UK. (Whether the UK is on the point of joining other countries suffering a COVID rebound is difficult to tell, but in some parts it probably is.)

At some point the rise in cases in some countries may force them to reimpose elements of lockdown, particularly when schools reopen. There is a danger of a cycle of periodic lockdowns as cases rise and then fall, at least until a vaccine is available. One possible alternative is to make elimination of COVID-19, rather than just its suppression, the goal of each national government. Few governments have made elimination of COVID-19 their goal, with three exceptions being New Zealand, Scotland and Northern Ireland.

Why might elimination be a better strategy? Individual psychology is shaped by social (in this case government) goals. Most governments have focused on changes (the first derivative), then people and so typically the media has done the same. If cases are rising you throw everything you have at the problem, if cases are falling you can steadily relax any lockdown, but if cases are steady (and governments tolerate that) COVID drops down the news lineup. So (a) above is more likely to fail if governments focus on changes rather than elimination.

If instead the focus becomes eliminating any new cases then initial lockdown might be a little longer, but you could achieve some positive results. First, those that are naturally cautious know that it is safe to resume social consumption, and so the economy recovers more completely, although with bigger short term costs. Second, you would save more lives. Third, and this is much more speculative, if new cases start to emerge that becomes headline news and it receives the full attention of government and TTI resources (see very recent developments in New Zealand). However New Zealand’s success with this strategy owes a lot to enforced quarantine for anyone travelling from overseas, which would be more difficult for most other countries.

I do not know whether an elimination strategy would be more successful at avoiding the kinds or rebounds in cases we are seeing in many European countries, but what is very surprising is that there seems to be little public debate on this question outside Australia. There should be a lot more debate in the UK beyond the pages of the Lancet, given the different strategies pursued by the different nations within it. With previous administrations we would expect some kind of strategy document from the UK government on something so important.

Still knee deep in boxes, so next post will be in a few weeks time.

Some thoughts on Labour's campaign

The importance of this election cannot be overstated. Voters have a choice between re-electing a government that since 2010 has done untold damage to this country and which will be led by someone totally unsuited to be Prime Minister, or giving a minority Labour government a chance to do better for a few years. The fact that the polls suggest the public want more of the same illustrates how close we are to becoming an authoritarian, populist (in the Jan-Werner Müller sense) right wing state where it becomes very difficult for any opposition to break through.

This post looks at some key aspects of Labour's campaign so far, in I hope a helpful fashion.

Tax and spend

One of the dangers Labour faces is that they appear to be promising too much. Voters are skeptical of manifesto promises at the best of times, even though evidence suggests that in the past most manifesto pledges are fulfilled. If you promise so much it is possible voters will just not believe you can do all this.

In contrast the Tory manifesto is positively frugal. But there is a reason for this, and neither Labour nor the Liberal Democrats have emphasized enough why that is. Labour are not used to trumpeting the results of IFS election analysis, but on this occasion they really should. That analysis shows that one economic issue alone dominates the future of the public finances: Brexit. Here is the key chart

What this chart shows is that all these give-aways do not come close to matching the amount of tax we will lose if Johnson keeps his pledge not to extend the transition period. The reason the Tory manifesto is frugal is they cannot afford to do anything with any fiscal cost and implement a hard or no deal Brexit. Both Labour and the Liberal Democrats can afford much more, because they are not planning a hard Brexit. 

Perhaps Labour and the Liberal Democrats are reluctant to talk about this because it is going over ground covered in the referendum, and most Leavers just do not believe the economic consequences of Brexit will be negative. Yet the IFS has considerable credibility, particularly in the media. Furthermore the sparse Tory manifesto is a tactic admission that, whatever they say, the Tories believe the economy will take a hit from Brexit. Labour and the Liberal Democrats should make more of this. 

Protecting minorities

Labour should not just be defensive on charges of antisemitism. These attacks on Labour over the small amount of antisemitism among members distract not only from the more extensive racism in the Tory party and its actions, as Jonathan Lis describes so clearly here. It also distracts from the rise of right wing hate-crime. That the problem is growing is pretty clear. Attacks mostly involve race and sexual orientation, but it includes attacks based on religion: mainly Muslims but also Jews. Commenting on the steady rise in ethnic or religious hate crimes Dr Chris Allen said:

“The statistics show that for the third year in succession, religiously motivated hate crimes have not only increased in number but have again reached record levels. While some try to explain this as a result of better reporting procedures, doing so is over simplistic. From our research at the Centre for Hate Studies, one cannot underestimate the impact of Brexit and the divisive rhetoric employed by politicians and others in the public spaces. Affording permission to hate a whole range of ‘Others’ – especially Muslims and immigrants – it is likely that the upward trajectory of hate crimes numbers will continue for the foreseeable future.”

The police say that the alt-right is the fastest growing terrorist threat in the UK. A third of all terror plots to kill in Britain since 2017 – seven out of 22 – were by those driven by extreme-right causes.There is nothing comparable on the left. One Labour MP was tragically killed by a far-right terrorist during the Brexit campaign, and at least one serious plot against another has subsequently been foiled. The alt-right is well organised at an international level

What has that got to do with this election? The rise of the far right did not come from out of the blue. Campaigns against immigration, and particularly for Brexit, have encouraged racists into the open. So has over the top language used by Brexiters. It has mainstreamed xenophobia, and maxed out on crude nationalism. The media, particularly the right wing media, are happy to give a voice to anti-Muslim writers.

What will the current government, if it wins this election, do when Brexit does not lead to any improvement in people’s lives, and indeed makes them worse? The Tory manifesto has virtually nothing about redistributing opportunities in a more equal way across the country, and Brexit will not help. If the recent past is anything to go by, they will blame immigrants even more than they do now, which will only increase the threat from the far right.

Scotland

Do you remember pictures of Ed Miliband in Alex Salmond’s pocket? These came from the Tories towards the end of the 2015 election, when it became clear that Labour could only win with the SNP’s help. It wasn’t repeated in 2017, in part I suspect because no one on the Tory side believed Labour would do anywhere near well enough to make that attack line effective. I suspect they will not make the same mistake this time around.

The Tory attack was credited by some as helping Cameron get his majority, although I have no idea how true that is. But if Labour is attacked along these lines in a serious way in the final days of the campaign, what should they do? They shouldn’t do what they have done so far, and just say they will not do any deals. This doesn’t work because voters believe maths more than they believe politicians, and they remember the 2010 Coalition talks and the Tory give-away to the DUP.

What Labour should do instead is dig out one of the quotes where Sturgeon has ruled out allowing the Tories back into government and repeat it endlessly. If any interviewer asks why that is relevant simply point out in the most tactful way that the SNP only has bargaining power over Labour if they are prepared to put the Tories in power instead, and they have ruled that out because it would be political suicide for them. Not putting the Tories in power means they have no leverage over Labour.

The last week

The SNP (and of course antisemitism and law & order) are going to be part of the Tory’s lines to take in the final week, and they are likely to throw in a letter from business leaders if they can find enough willing to sign it despite Brexit. What should Labour emphasise? There is an embarrassment of riches to choose from. They could talk about

Revitalising the economy with public investment directed at the regions

Building more social housing

A Final Say on Brexit

Nationalisation and Free Broadband

Education

Revitalising bus services

A Green New Deal

Saving the NHS

And probably much more that I have forgotten about. Talk about them all and there is a danger nothing really hits home. More than ever before there will be an intense battle between the two major parties to get the media to talk about the topic they want talked about. In 2015 the media chose the SNP rather than the NHS which Miliband wanted to be the focus. In hindsight that represented terrible judgement by the media, but importance isn’t their key consideration.

What works best in getting airtime is to present something new. It could be a letter on the Tories climate change policy like this. It could be a new statistic on poor health service performance which should not be hard to find, or some gaffe by a senior Tory (like this). They can always use this. These are also the two obvious issues to focus on in the final day or two.

On climate change you can say that we cannot waste another five years before we take serious action. This is aimed, above all, at getting out Labour’s core younger vote. The NHS will have much greater resonance with the Tory core vote, and might discourage these voters from voting at all. On the morning of the election the newspapers most elderly people read will be full of scare stories about Corbyn, so Labour needs concerns about the safety of the NHS under Johnson, Trump and Brexit to counteract that.

Brexit makes the economics of Scottish independence much more attractive

There is a slightly later and extended version of this post, which may also be a little clearer, at the New Statesman here.

It is difficult to think clearly when you watch the utter hypocrisy of our Prime Minister, lecturing the SNP about politics not being a game, moments before she needlessly rejects a Lords amendment to secure the rights of EU citizens in the UK. Everyone knows those rights will be guaranteed during the negotiations, so it would be so easy to seize the moral high ground by doing that now. But I’m not sure our Prime Minister, and her MPs, would recognise the moral high ground if it was staring them in the face.

Nicola Sturgeon had no choice but to announce a second Scottish referendum. Brexit is a huge economic and political change, and she would be neglecting her duty to the citizens of Scotland not to explore ways she could avoid a hard Brexit fate for her people. She was given no choice by the decision to leave the Single Market, made not by UK voters but by the Prime Minister.

Yet it is also difficult to forgive the SNP for inventing the term Project Fear, which became the vehicle by which the Leave campaign was able to pretend that Brexit would not be the economic disaster it almost certainly will be. It is difficult to forgive them for trying to pretend that the short term costs for the Scottish people of leaving the UK would not be severe. I thought then that it was a huge risk to bear those short term costs when the long term benefits outlined by the SNP appeared to be little more than wishful thinking.

But Brexit changes everything. The economic cost to the UK of leaving the EU could be as high as a reduction of 10% in average incomes by 2030. If Scotland, by becoming independent, can avoid that fate then you have a clear long term economic gain right there. But it is more than that. If, Scotland can remain in the Single Market it could be the destination of the foreign investment that once came to the UK as a gateway into the EU. By accepting free movement, it could benefit from the immigration that has so benefited the UK public finances over the last decade. No, that is not what you read in the papers or see on the TV, but I’m talking about the real world, not the political fantasy that seems so dominant today.

There is an additional issue regarding the short term costs of independence. With little oil at a low price there is no doubt that the rUK is currently subsidising Scotland by a significant amount. Under Cameron it was reasonable to suppose that this subsidy would continue for some time, if only to prevent another referendum. I do not think we can make the same assumption about Theresa Brexit May. The prospects for the UK public finances under Brexit are dire, yet after the Budget there seems no way that the Conservatives will put up taxes to pay for the extra resources the NHS and other public services so desperately need. As the situation gets steadily worse, nothing - absolutely nothing - will be safe from continuing austerity. To be brutally honest, if the SNP loses another referendum, even the formidable Ruth Davidson will not be able to prevent Scotland being plundered by this government.

There are a huge number of issues that still need to be clarified regarding this second referendum. Will the SNP still go for, or at least appear to go for, staying in a monetary union with the rUK and keeping sterling just because it is the more popular option, even though having their own currency is much more sensible in economic and political terms? Will they be honest about the short term costs? Will the EU give them the chance of staying in the Single Market or EU, or will they insist they join the queue? But the bottom line is that the case for Scottish independence is now much stronger than it was in 2014. Then a brighter future outside the UK was patriotic wishful thinking. Now, if they can stay in the Single Market, it is almost a certainty. 

Does democracy require implementing the referendum result?

We all know the EU referendum was not legally binding on parliament. That is not true of all UK referendums: the referendum on using AV did require parliament to enact whatever voters decided. Despite the lack of a legal requirement, there remains a powerful political argument that parliament was nevertheless duty bound to implement the referendum result. It is an argument that is often invoked by both government and opposition MPs. Now I have no doubt that in reality other motives are important, perhaps decisive, but because political arguments can be persuasive, it is important to debate this one.

The clearest argument along these lines comes from a post from Richard Ekins, who is a Professor of Law at Oxford University. He writes

“Parliament made clear that the decision about whether to leave the EU was to be settled by the referendum. There were good reasons, outlined above, why Parliament should not permit Brexit otherwise than by way of a referendum. Even if one denies all this, one should still accept that a referendum once held settles what should be done. For the decision to proceed thus is itself an important public decision that fairly governs how we jointly are to decide. That is, Parliament having decided to hold the referendum, and the public having participated fully in it, the result should be respected and not undone.

Political fairness and democratic principle require one to respect the outcome of the referendum even if one is persuaded that Brexit would be a very bad idea. One might think it wrong to hold the referendum, but it was held – and Parliament invited the people to decide this question. ... In short, the important constitutional question of whether Britain should remain in the EU was fairly settled by public vote.

The proposal to ignore or undo the vote is unjust. It bears noting that the relatively powerless in our polity – the poor – overwhelmingly supported exit. Ignoring the referendum would be particularly unfair to them.”

Note that this does not say that people like me should shut up about the harm that this action will cause. Instead it says that parliament, having invited people to decide, should respect that verdict. To do otherwise would be highly undemocratic, and would be particularly unjust to those who, for well known reasons, might justifiably claim that they are not well represented by the sovereignty of parliament. Arguing that the Leave campaign told lies, or that voters were deceived, does not seem to be a compelling argument against this, as exactly these charges can and are made after general elections

To help see why Ekins is wrong, it is useful to look at his discussion of the claim by Ken Rogoff that the “real lunacy of the United Kingdom’s vote to leave the European Union was not that British leaders dared to ask their populace to weigh the benefits of membership against the immigration pressures it presents. Rather, it was the absurdly low bar for exit, requiring only a simple majority.” But Ekins’ response strikes me as particularly weak. He essentially says parliament could do this because it has done it before. He goes on to say that there is “nothing at all perverse in Parliament choosing to make provision for a clear decision on point by way of a single referendum, inviting and encouraging public deliberation that culminates in a moment of clear and authoritative decision.”

This strikes me as completely ignoring Rogoff’s point. How can a 51.9% vote on one particular day represent a “clear and authoritative decision”. If a general election is close in terms of seats, that is reflected in the balance of parliament, and governments with small majorities and independently minded MPs face constraints on what they can do. What Rogoff is saying is that a referendum which only requires in theory a majority of only a single voter can never be clear and authoritative. Those who lost can justifiably claim that if the vote had been taken a day later or earlier the result could have been different, and we know they could be correct. The fact that UK governments have made this mistake in the past does not make it right. Remember we are talking about what is right politically, not what is right in law, so precedent is far less compelling.

Much the same point applies to the issue of a second referendum. He says: “Parliament having chosen already the decision-making procedure, it is not legitimate now to say that this should be set aside. The time for arguing for a two referenda requirement, or majority support in each part of the UK, was before this referendum was held.” He is certainly right that those who had won would think it is unfair to apparently change the rules of the game after the event, much as those who have lost think the whole process is deeply unfair and unjust. I also think that Ekins’ appeal to those who are otherwise unrepresented resonates with many Labour supporters, who feel that such a move would look just like the elite overriding the wishes of the people. (See Owen Jones, who questions Corbyn’s leadership but not his Brexit line.)

Except that is nonsense. If those who voted to Leave cannot get a simple majority in a second referendum when we have a lot more information about what leaving entails then that indicates something very wrong with the initial vote, and not some plot by the elite to cheat them. It is hardly undemocratic to hold a second referendum because the situation has become much clearer. As I have said before, when politicians argue that allowing a second vote is going against ‘the will of the people’ you know that you are in real trouble.

Is that unfair to one side? Of course not, because it is how politics works. Take the Scottish referendum, where Remain won by 55.4%. Just a few years later, and we could well see another referendum. To say that is different because something crucial has changed actually plays into the arguments for a second EU referendum. Unless voters perfectly anticipated the nature of the exit deal with the EU, that deal in itself is a huge and crucial change.

It seems to be neither politics nor fairness dictates that something poorly done in the past should dictate what politicians do in the future, when there is no legal constraint on them changing their minds. Holding further votes when the situation has changed cannot be undemocratic or unfair to anyone. [1]

I think all this is a useful perspective when we go back to the original question of whether parliament is obliged in some way to enact the result of the referendum we have had. Recall that Ekins says: “Parliament made clear that the decision about whether to leave the EU was to be settled by the referendum.” Now I have said in the past that I can understand why an individual MP, who has pledged to let the referendum decide their vote, should feel duty bound to keep their word. But I do question how exactly ‘parliament’ made such a pledge. An obvious way for a parliament to make such a pledge is to embed it into the terms of the referendum itself, as was done with the AV referendum. This was not done on this occasion.

It seems to me, therefore, well within the rights of any MP or Party to say that they do not regard a vote this close as binding on how they should vote. Indeed I would go further. Any MP or Party who thinks, based on the knowledge they have, that those voting Leave will over time regret their decision, has a duty to vote based on his or her judgement, rather than be tied by some vague notion around parliamentary commitment. 

But all this assumes that the Article 50 vote was just about implementing the referendum. It clearly was not just about that. Any sane discussion of the referendum has to recognise that voting Leave gave no guidance to politicians about how to leave. The referendum was not about the Single Market, the customs union etc. What the Prime Minister should have done was to allow parliament to debate the issue of how to leave, which is critical for the future of the UK. No doubt they would have given parliament a lead, but triggering Article 50 could have waited until that discussion had taken place. [2] Theresa May decided not to allow parliament that discussion.

As a result, the vote on Article 50 was not just about deciding to start the leaving process, but it also effectively became the last chance for MPs to express any view on how we should leave. That in effect made the vote a decision to leave the way May had decided, or might decide without recourse to parliament. The moment the Prime Minister did that, any obligation an MP might have felt regarding the referendum became null and void.

This is the crucial difference between 1975 and 2016, and another reason why arguments that appeal to precedent are wrong. In 1975, voters had a clear idea about what both In and Out involved. In 2016 what Leave meant was completely unclear, not least to those campaigning for it. That meant in practice that voters decided on the basis of the form of Leave they expected to happen, or perhaps were promised would happen, rather than the form of Leave the government would eventually choose.

It is for this reason that we appear to have a decidedly undemocratic result. If the referendum had set remaining against leaving for the type of hard Brexit that we are almost certain to have, it seems extremely unlikely that a majority would have voted for that. Yet those who argue that the referendum obliged MPs to vote for triggering Article 50 are in effect arguing for exactly that result. That is neither democratic, fair or indeed wise.

[1] I am sure many would argue that a referendum which came with the promise of a later referendum where you could change your mind would be too great an invitation to those who simply wanted to exercise a protest vote. I will leave that and similar arguments for others.

[2] The more people argue that such an arrangement would not have been practical, the more they illustrate how badly designed the original referendum was. Instead of debating and voting on a specific way of leaving (which could have been chosen jointly by those who wanted to leave) relative to remaining, we got a decision which was far too open ended. As a result, Leave campaigners said during the campaign that voting Leave did not imply leaving the Single Market. Once again, it seems odd to argue that parliament should not try and rectify past mistakes like this for the sake of some imagined commitment.   

Cutting the Mail down to size: welcome to Scotland

For non-UK readers who might be mystified by the picture above, some background. The Daily Mail, a UK newspaper that once supported Hitler and seems to be returning to those good old ways, recently called the three independent judges, who had just ruled that parliament should have a say on triggering Article 50 to leave to EU, “enemies of the people”. In response to this and their remorseless headlines pushing the idea of a migrant threat, a group called Stop Funding Hate asked advertisers to take their business away from the Mail. Lego appears to be their first success.

All the UK tabloids have Scottish editions, but there is one additional Scottish tabloid, the Daily Record. In Scotland the Daily Record has a little under a third of the daily tabloid market. The Scottish Sun has a little over a third. The Mail has only 15%. Contrast this with the rest of the UK, in which if I’ve done my sums right the Mail has a third of the market, the Sun has a third, and the rest is split between the Mirror, Star and Express. So in Scotland, unlike the rest of the UK, the Mail does not dominate the tabloid market.

But everyone knows Scotland is just more left wing and liberal, you might say. But you would be wrong. When social attitudes are measured, Scotland consistently comes out as looking very similar to the rest of the UK.

The idea that the media is just a mirror, reflecting the political attitudes of its readers, is a (dare I say cultivated) myth that falls apart the moment you think about it. It relies on the idea that if a paper does not reflect a reader’s political viewpoint, the reader will stop buying. But most people do not buy newspapers for the politics. Furthermore, the market is hardly flooded with alternatives. These facts give newspapers considerable agency to push their owners views. Of course there are limits to what a paper can do, and Murdoch in particular is very careful not to let his papers get too out of line with its readers, but within those limits they have considerable power. Why else do politicians spend so much of their precious time courting them, if they have no influence? As Murdoch said, when asked why he was so opposed to the EU: “That’s easy. When I go into Downing Street they do what I say; when I go to Brussels they take no notice.”

In the EU referendum we know how the Mail, Sun and Express became part of the Leave campaign. That means that only around 20% of the UK tabloid market argued to Remain. What is more, this 80% pushed their position in a way that can only be described as propaganda. Was this dominance just a reflection of readers views?!

In Scotland however the Daily Record argued for Remain, and the Scottish Sun sat on the fence. (Compare the Scottish Sun’s editorial to the one the rest of the UK saw.) That means that those arguing for Leave were in a slight minority in Scotland. But perhaps more importantly, readers obtained information from newspapers, not propaganda. As we know, Scotland voted by over 60% to stay in the EU.

I listened to this talk (text) by Nicola Sturgeon at SPERI a week ago. She argued, correctly in my view, that leaving the EU but staying in the single market was the obvious way forward after such a close vote. She says that not only did austerity cause significant economic damage, but it also hurt the very fabric of society. She talks about how a fairer society is also good for the economy. None of the leaders of the three other main parties could argue these points. And she argues all these things with calm authority. It is natural to ask why the UK as a whole does not have a political leader of this quality. Perhaps a more balanced tabloid press in Scotland is part of the answer, although there are no doubt many other reasons.

Of course Sturgeon and the SNP can attempt to deceive voters, as they did in the Scottish referendum when it came to the short term fiscal costs. Yet in Scotland newspapers, including the Sun, gave their readers both sides of the argument rather than feeding them propaganda. And Scotland voted to stay part of the UK. It was close, but so was the EU referendum vote in the UK. Whether people get facts or propaganda from their newspapers can make that difference.

For economists Project Fear is Brexit

Ironically we have the Union’s side in the Scottish referendum debate for inventing the idea of Project Fear. Alex Salmond, who knows a bit about spin, immediately saw its potential, and the economic case against Scottish independence was branded Project Fear by the SNP. The implication of that label is that those using Project Fear are hugely overplaying their hand to frighten voters.

In the Scottish referendum the UK government’s case was that people would be significantly worse off in the short to medium term in an independent Scotland. It may have been met with the jibe that it was Project Fear, but in reality it was a pretty reasonable assessment of what independence might mean, parts of which were backed up by independent analysis from the IFS and the OBR. But together with some wishful thinking of their own, the SNP were able to dismiss all this economics analysis as just scaremongering.

Yet in reality things turned out to be even worse than the Treasury and independent analysis had suggested. That analysis assumed that the high oil price at the time would stay high. What actually happened was a sharp fall in the oil price, which would have been a disaster for an independent Scotland. So in the end the UK government’s case against Scottish Independence was understated. But Nicola Sturgeon keeps calling it Project Fear and journalists hardly ever challenge her on that. So by the rules of the politicisation of truth, any reasonable but negative assessment of the economic consequences of change is now seen as potentially politically counterproductive because can be called Project Fear.

It was therefore inevitable that the Leave side would pick up on this trick. They too knew that the economic facts were stacked against them. So they called the analysis produced by the Remain side Project Fear, and political commentators in the broadcast media - being balanced and all - found it easier to repeat the label than try and go through the arguments.

Yet the arguments are not rocket science. Countries find it easier to trade with others that are close by. If you make that trade more difficult by leaving the single market, some of that trade will go elsewhere, but not all of it for sure. The end result will be less trade. It is common sense, which happens to be backed up by lots of empirical evidence. There is also strong evidence that less trade leads to lower productivity growth, which means incomes grow more slowly. What is a key reason why China been growing so rapidly since the 1980s? Because it opened up to trade.

It is also common sense that if we leave the EU, foreign investment into the UK will fall. Invest now and you get easy access to the huge market that is the EU, so after Brexit many firms will go elsewhere to gain that access. This is why 9 out of 10 economists think we will be poorer after Brexit, with only 4 in every 100 thinking we will be better off. [1] As the IFS’s Director Paul Johnson wrote: “That degree of unanimity on any poll of any group of people about just about anything is almost without precedent.”

Faced with this level of unanimity, some in the leave campaign have tried to suggest that economists generally get it wrong. Yet ironically, one of the examples they choose shows completely the opposite, as Paul Johnson notes and I had also pointed out earlier. The UK’s decision in 2003 on the Euro was similar to the Scottish and EU referenda in the following way. Some politicians, for essentially political reasons, liked the idea of doing something they saw as bold: in 2003 it was adopting the Euro. The Treasury did an incredibly thorough job of looking at all the pros and cons, taking extensive academic advice, and convinced first Gordon Brown and then Tony Blair that the risks were too big. And just as in the case of Scottish independence, that analysis underestimated the problems the Euro would face. Luckily neither Brown or Blair thought this analysis was Project Fear.

The 2003 Euro work, and the Scottish independence work, were both headed up by the same man: Dave Ramsden, now Chief Economic Advisor at the Treasury. Having got two big calls right, he is just the guy you would want to be in charge of the Treasury’s analysis of Brexit. That Treasury analysis is once again pretty reasonable, and - just as with the Scottish referendum - has been shown to be reasonable by other studies [2]. The idea that you shouldn’t trust economists now because they always get it wrong has it completely backwards in this particular case.

But as Paul Johnson, myself and others have noted, the message from economists is either being ignored or has not got through. I do not think it is being ignored, for reasons outlined here and here. Which is why journalists in the broadcast media must stop this nonsense of obscuring the truth by being too literal about political balance. The problem, as I noted here, is that one point in the overall debate is obvious: you cannot control immigration from the EU within the EU. So if the media insist on obscuring the economic costs of Brexit by putting up nonsense analysis against the consensus among economists, or continuing to dismiss that consensus as Project Fear, they are effectively taking sides. Let’s hear less from political journalists about Project Fear, and more about the economic consensus that after Brexit wages will be lower and there would be less money for the NHS.

[1] There is this strange idea among Leave supporters that we cannot say people will be ‘poorer’ under Brexit, because being poorer can only mean less well off than you were in the past. I guess if the Brexit side are going to misuse numbers (£350 million a week), they are going to try and misuse language at the same time.

[2] Martin Sandu has a brief summary