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Schweiger on European Affairs

Running commentary on the internal and external developments of the EU

Britain and the UKIP vision: Flirtation or destiny?

The ghost of rising Euroscepticism has been haunting the European Union for a considerable amount of time. Since the onset of the global financial crisis the level of support for EU’s institutions and policies has dropped to worryingly low levels in many member states. The United Kingdom is consistently positioned at the bottom of the league when it comes to public support for the EU. This is not surprising given the fact that since the UK first entered the European Community in 1973 the domestic debate on membership has been predominantly negative, apart from the brief period in the run-up to the first public ‘in/out’ referendum in 1975. During the Conservative-dominated era under Margaret Thatcher and John Major between 1979 and 1997 Euroscepticism grew substantially in the UK and was substantially fuelled by the predominantly foreign-owned tabloid press. Ruport Murdoch, Conrad Black and their supporters made sure that the EU was receiving constant negative headlines in the UK. Engagement in the EU was portrayed in terms of fighting ‘battles’, ‘putting down red lines’ and showing ‘no surrender’ to an alleged Franco-German plot to undermine British state sovereignty by stealth as part of the wider plan to create a federal superstate in Brussels. Conservative Prime minister Margaret Thatcher who had campaigned for Britain to stay in the EC as opposition leader during the run-up to the 1975 referendum, adopted an increasingly hardline Eurosceptic stance whilst in government. This eventually cost her the premiership in 1990 when she was pushed towards resignation by her own cabinet who were no longer willing to put up with her constant warfare against Brussels. Thatcher’s successor as PM John Major saw his premiership riddled by infighting between hardline Eurosceptics, such as John Redwood and Bill Cash, and moderate pro-Europeans like Kenneth Clarke and Michael Heseltine. The Conservatives’ deep divisions and obsession with the EU have never gone away since. They contributed substantially to the heavy defeat Major suffered at the May 1997 general election and subsequently deepened further during the party’s  long period of opposition under New Labour in government between 1997 and 2010.

Tony Blair, the first Labour prime minister in 18 years, was elected in May 1997 on the basis of a pragmatically pro-European manifesto. This seemed to indicate that the UK would in the medium- to long-term finally be able to adopt a more positive attitude towards its membership of the EU. Blair and his ministers famously claimed that it was their aim to ensure that the UK would become a leading player in the EU by engaging rationally in individual policy areas. To a certain extent Blair was able to put this ambition into practice by using the UK’s strong economic position in the early 2000s to substantially influence the design of the EU’s Lisbon Strategy, which developed overall policy targets for the reform of national labour markets and welfare states. Blair had also been an agenda- setter in the area of the defence and security where he and French president Chirac jointly pushed other leaders towards the establishment of an EU military crisis intervention force. For Blair the establishment of the EU Rapid Reaction Force was the essential conclusion from the failure of the EU to be able to collectively resolve the Serbian genocide against ethnic Albanians in the Kosovo in 1998-99 without US military support. Blair however subsequently made little effort to promote the increased level of British influence in the EU as a positive development in the domestic political debate. Unlike his senior spin doctor Peter Mandelson who famously claimed in 2005 that ‘New Labour is inspiring Europe’ (The Guardian 3 February 2005) Blair played a double act in his European policy approach. At home Blair avoided any confrontation with the Eurosceptic media and kept close relations with the influential Eurosceptic Australian-born media mogul Ruport Murdoch and his editors at The Sun and News of the World tabloid newspapers. On the EU level on the other hand, Blair presented himself as a modern cosmopolitan Social Democrat who was willing to confront domestic Euroscepticism. In speeches abroad, such as at the German Social Democrats party conference in Nuremberg in November 20011, Blair even led the argument on convincing the British public of the eventual necessity to join the euro. Blair was only able to maintain this double act for a limited period. Eventually he abandoned his initial ambition to build a leadership position in the EU, which was closely linked to his wider ambition to establish the UK as a ‘bridge’ between United States and European interests. The watershed moment in this respect were the events of the 9/11 terrorist attacks in the  US after which Blair adopted a messianic approach towards foreign affairs. His strong support for president George W. Bush’s ‘war on terror’, which in practice amounted to preventive military intervention against supposed rogue states, alienated France and Germany and caused a major rift in the EU. French president Chirac and Germany’s chancellor Schröder were united in their opposition towards the Bush agenda and towards Blair’s calls for European military support in the Iraq intervention. The result was that the level of British influence in the EU that Blair gradually built up since 1997 was starting to vanish again. Gordon Brown, his arch political rival and successor as prime minister in 2007, made little effort to engage in EU affairs, which he seemed to consider of little benefit to his own political standing at home. In retrospect the New Labour era consequently has to be considered as a missed historic opportunity to changethe British public attitude towards EU membership. The failure of Blair and Brown to make a consistent positive public case for engagement in the EU and to emphasise the benefits of the UK’s membership allowed a predominantly Eurosceptic media to dominate the debate.

 When David Cameron entered Downing Street as the new Conservative prime minister in May 2010 Britain was feeling the full economic impact of the 2008-09 global financial crisis and the subsequent major shakeup of the British banking sector. Cameron had established himself as moderate Eurosceptic whilst in opposition. A central feature of his 2010 campaign manifesto was the promise that no further powers could be transferred to the EU without the consent of the British people in a public referendum. Cameron’s reaction to Merkel’s and Sarkozy’s plans to develop new layers of policy coordination in the eurozone and the wider EU in response to the crisis hardened his Eurosceptic stance. This eventually culminated in his deliberate veto against the passing of a new stability treaty for the eurozone and the rest of the Single Market at the Brussels EU summit in December 2011. The treaty which was widely referred to as the ‘Fiscal Compact’ was an attempt by Merkel to widen her vision of a ‘stability union’ for the eurozone countries to all EU members by getting them to introduce a debt brake in their national constitutions. Cameron argued that the proposed treaty was unacceptable for countries outside the eurozone as it would fail to provide adequate safeguards against transferring further powers to the EU institutional level, most of all towards the European Commission.

Cameron has cast a lonely figure amongst EU leaders as a result of his veto policy. French president Sarkozy famously refused to even greet Cameron at subsequent EU summits. Sarkozy’s Socialist successor François Hollande has had little time for Cameron’s repeated demands for the renegotiation of British membership terms. On the latter Cameron initially had pursued a strategy which seemed to be aimed at gaining support amongst other EU leaders by presenting these demands as part of a wider reform agenda for the EU. In his Bloomberg speech in January 2013 Cameron announced that he intended to seek the renegotiation of the UK’s membership terms on which the British public should have a say in an in-out public referendum on EU membership in 2017. Cameron spoke of a ‘positive vision’ for the whole of the EU. This seemed to have clearly set him apart from the agenda promoted by the UK Independence Party (UKIP) and the fundamentalist Eurosceptic wing of his own party: ‘I am not a British isolationist. I don’t just want a better deal for Britain. I want a better deal for Europe too.’[1] This explains why German chancellor Merkel reacted generally positive towards Cameron’s calls for reform and promised to be open towards negotiating a ‘fair compromise’ on the renegotiation of British membership. The problem for Cameron since he made the Bloomberg speech has been that it opened Pandora’s box of British Eurosceptism. The past 22 months have consequently been dominated by a domestic discussion about the likelihood of the success of renegotiating the conditions of Britain’s EU membership. Cameron did not mention the central underlying issue of his demands for renegotiation, which is the desire to gain an opt-out for the UK from the principle of the free movement of people in the EU. The freedom of movement is of course one of the four fundamental principles of the Single European Market which was first established in the Treaty of Rome in 1957. Cameron’s government initially put this subject on the public agenda by emphasising the need to protect Britain’s welfare system and public services from an alleged wave of welfare tourism, predominantly from the two  poorest EU member states in Central and Eastern Europe, Bulgaria and Romania. This was subsequently increasingly picked up by the tabloid press and most of all by UKIP leader Nigel Farage, who has turned the issue of alleged unlimited welfare migration into a vote-winner for his party. Cameron and his Conservative ministers have reacted to this by jumping on the UKIP anti-immigration bandwagon. The recent comments made by defence secretary Michael Fallon that parts of the UK had been ‘swamped’ and were ‘under siege’ from Eastern European immigrants go hand in hand with Cameron’s ambition to renegotiate the EU’s freedom of movement principle.

Economic insecurity breeds fear. Since the onset of the 2008-09 global financial crisis large sections of British society have been experiencing unprecedented levels of personal economic insecurity as a result of a prolonged period of wage stagnation, rising inflation and cutback of public service provision.

The deep and sustained public spending cuts which were introduced by Cameron’s Conservative-Liberal coalition after May 2010 are obviously not the result of budgetary mismanagement by the previous Labour government. The decision of the Brown government in 2007 to support banks who were faced with a sudden liquidity problem from public funds rapidly pushed the UK from a healthy budgetary situation towards the brink of a sovereign debt crisis in the course of 2008-09. The government’s intervention was essential to prevent the partial collapse of the UK’s financial industry through the recapitalisation of major banking groups such as RBS, Lloyds and Northern Rock. The collapse of major banks would have had unpredictable consequences for the UK’s liberal market economy which strongly depends on the financial industry for growth and job creation. The prolonged period of austerity in the UK since 2010 is therefore the result of the instability of parts of the country’s domestic financial industry. Most of all it resulted from the failure of large banks to ensure that they have sufficient capital buffers to withstand a sudden shortfall of capital on the global markets. In this context it is puzzling that the public debate on the causes for Britain’s financial malaise has shifted almost entirely away  from the root causes towards a phantom debate which blames the effects on scapegoats. Economic insecurity breads fear and people who are scared tend to look for easy solutions and almost naturally for scapegoats. This has been true since the rise of nationalism and eventually German-born National Socialist fascism which raised its ugly head across Europe in the wake of the stock market crash of 1929. The scapegoats are usually minorities who are supposed to be responsible for the insecurities people are experiencing. In the 1930s it was the Jewish population that was blamed for the record number of job losses people were experiencing in many countries in Europe. What followed was an unprecedented wave of anti-Semitism which eventually resulted in the unimaginable monstrosity of the industrialised genocide by the National Socialists’ henchmen. Today the new scapegoats are migrant workers from other EU member states, mostly from those with a low-wage culture in Central and Eastern Europe and with high levels of unemployment, such as in the Southern European sovereign debt eurozone crisis countries (Greece, Spain, Italy, Portugal, Cyprus). This is not an exclusive British phenomenon as is shown by the surge of support for populist and in some cases fascist parties in other EU member states who all stand on a mixed anti-EU and anti-immigration platform. Prime examples are the Front National in France, the AFD in Germany,  the Freedom Party in the Netherlands and the Swedish Democrats. The main difference in the UK context is that UKIP’s isolationist anti-immigration agenda is increasingly being adopted by the mainstream political parties. David Cameron and his Conservative ministers are trying to contain UKIP by adopting a progressively more narrow hardline stance towards the EU. This essentially boils down to demands for scrapping the principle of the freedom of movement for all EU citizens, for which there is currently little support amongst the other 27 EU governments. If Cameron fails to gain support for this demand he will face growing pressures from the hardline Eurosceptic wing in the Conservative Party to call an early referendum on EU membership, most likely straight after the 2015 general election. In this case he is likely to find himself standing jointly with UKIP on a pro-exit platform in the referendum campaign. The Labour Party under Ed Miliband has so far been very cautious to challenge UKIP on immigration and also failed to make a positive case for continued British membership of the EU. This leaves the Liberal Democrats, Cameron’s currently quite unpopular coalition partner, and the Scottish Nationalist SNP as the only vocal supporters of EU membership. The increasingly Eurosceptic political climate in the UK is strongly supported not just by the tabloid press but recently also by the mainstream media which has started to link reports on EU immigration with the debate on domestic welfare reform and shortages in public services. It is rather surprising that in this climate public support for EU membership amongst the British public did actually temporarily grow. IPSOS Mori reported on October 22nd that in spite of a noticeable increase in public support for UKIP in polls, the latest polling data on EU membership showed the highest level of support for remaining in the EU in 23 years[2]. It seems therefore that, in spite of persistently negative coverage of the EU in the British media and the predominance of a Eurosceptic political agenda, a substantial part of British society has underlying concerns about the effects leaving the EU. This is most likely the result of the hard facts on the economic effects of exit from the EU for the British economy which were presented by the Confederation of British Industry (CBI). The CBI estimates that the  membership of the Single European Market boosts the British economy by contributing between four and five per cent to its annual GDP growth, a net benefit of between £62 and £78 billion each year[3]. The increase in public support for EU membership in the UK raises some hope that the recent surge in support UKIP is more the result of an anti-establishment protest against the performance of the mainstream political parties than that of deep-seated Euroscepticism.

My concern is that the vulnerable seedling of public British pragmatism on EU membership could be extinguished before it has even had a chance to flourish due to the insensibilities shown by both the EU and the Cameron government. The emerging public spat between Cameron and EU Commissions officials on the rather sudden announcement of demands for more than two billion pounds additional contributions to the EU budget is a major cause for concern in this respect. It certainly shows a degree of insensivity on the part of the EU Commission towards the British domestic debate on Europe. It is not clear to what extent the announcement of the demands for additional UK payments was coordinated between the outgoing Barroso and the incoming Juncker Commission. What is obvious is that it comes at a time when the Commission should be careful not to provide UKIP’s anti-EU agenda with new ammunition by making a sudden public announcement on this politically sensitive issue, rather than to find a solution with the UK Treasury in behind the scenes negotiations. The way the Commission handled this announcement without any concern for the impact it is likely to have on public opinion in the UK towards EU membership does not bear well for the future. What this issue nevertheless reveals most of all is the stunning degree of incompetence on behalf of the UK Treasury under chancellor George Osborne with regard to EU budgetary affairs. It is obvious that the UK government, like all other 27 member state governments, was fully involved in the negotiations on Eurostat’s recalculation of the statistical formula for individual member state budgetary contributions. After all the Commission only has a mandate to initiate changes on any major policy issue if these are backed up by a mandate from at least a qualified majority of governments. Changes in crucial policy areas such as the EU budget are therefore discussed in the collective Council meetings of national finance ministers which take place frequently. George Osborne and his officials in the Treasury should hence have been well aware of what was coming their way. A recent special feature in the Financial Times on the EU budget back payment demands emphasises that the revision of the UK’s budgetary contributions took place on the basis of the UK’s Office of National Statistics upwards revision of the country’s Gross National Income (GNI) by £74.2 billion[4]. Moreover it has emerged that Osborne’s Treasury had already previously underestimated the UK’s contributions to the EU budget. In 2013 the UK Treasury had to make £2.7 billion additional payments to the EU as a result of its own miscalculations on budgetary contributions[5]. Cameron’s public outrage over the issue therefore has to be regarded as a calculated political stunt which is aimed at trying to lure voters away from UKIP and back to the Conservatives in preparation for the 2015 general election and the upcoming by-election in Rochester and Strood on November 20th. The danger for the future of British EU membership lies in the potentially toxic mix of Cameron’s mismanagement of relations with Brussels and the failure of the Labour opposition to make a genuine case for staying in the EU. The current leadership of the Labour Party seems to pursue a low-risk electoral strategy for the 2015 general election which may potentially allow it to win on the basis of a substantial defection of Conservative support towards UKIP. The failure of Labour to face up to the challenge of making the pro-EU case may in the end yet still allow Nigel Farage and UKIP to achieve its vision of a Britain outside the EU. Public support for exit from the EU could rise substantially in the UK if the new Juncker Commission and the other 27 member states should decide to make no concessions to Cameron on his demands for the renegotiation of the freedom of movement.

If the British public ultimately decides to embrace Farage’s vision of a UK which moves towards ‘splendid isolation’ from Europe EU this would in the long term not only risk to severely undermine the country’s economic standing but also be detrimental to its influence across the globe. Britain’s exit from the EU would be a lost opportunity to show that narrow-minded nationalism and isolationism have no place in the dynamic and liberal market economy of the UK. At the same time without the UK the EU would have lost a substantial part of its economic dynamism, political pragmatism (most of all in terms of being open towards further enlargement) and its overall external clout. It is high time for Brussels and London to stop posturing and to realise what is at stake.

[1] https://www.gov.uk/government/speeches/eu-speech-at-bloomberg

[2]https://www.ipsos-mori.com/researchpublications/researcharchive/3463/Support-for-EU-membership-highest-for-23-years-even-as-UKIP-rises-in-the-polls.aspx

[3] http://www.cbi.org.uk/media/2451423/our_global_future.pdf, p. 11.

[4]http://www.ft.com/cms/s/0/0f8df0c2-5b64-11e4-b68a00144feab7de.html?siteedition=uk#axzz3Hq9u1z9vs

[5] http://www.theguardian.com/politics/2014/oct/31/conservatives-eu-bill-pressure-contributions



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