Sentiments and statistics: why CANZUK won’t fly

The idea that the United Kingdom should try and rebuild closer ties with Canada, Australia and New Zealand raises its head from time to time. Obviously we’re close friends, with ties of history, language and culture, and there’s nothing wrong with reinforcing old friendships.

But thanks to Brexit, we’re hearing a bit more about this kind of thing than usual — with a focus on some kind of economic and geopolitical partnership. So is there a business case for CANZUK as a primary relationship for any of these four countries? Let’s look at where our potential partners currently sell goods and services.

Data: World Bank statistics (I grouped CANZUK, EU-27 and GCC figures myself)

In the United Kingdom, nearly half of our exports go to the rest of the EU. When you add EFTA members in, a majority goes to countries in or partly in the single market. By far our largest non-European partner is the United States. China and the Gulf Co-operation Council states both come in ahead of CANZUK. You might try and argue that we’ve had a lot of trade diversion to the rest of Europe. But even if you doubled our trade with Canada, Australia and New Zealand, it’s never going to be anywhere near enough to make up. We are a Euro-Atlantic economy.

Data: World Bank statistics (I grouped CANZUK, EU-27 and GCC figures myself)

In Canada’s case, it’s quite obvious that nothing and no-one could match the scale of US trade. It’s next door, it’s huge and it’s economically fairly integrated. Again, China and the EU-27 both come in ahead of CANZUK. Again, there’s no way CANZUK could even come close to matching trade with the neighbours.

Data: World Bank statistics (I grouped CANZUK, EU-27 and GCC figures myself)

A clear majority of Australia’s exports go to east Asia, with the developed English-speaking world clocking in at about 10%. CANZUK would theoretically be the fourth-largest destination for exports, but over half of them go to New Zealand. (Let’s also note that Australia and New Zealand already have a free trade agreement.) Australia trades mostly with its neighbours and within its geographical region.

Data: World Bank statistics (I grouped CANZUK, EU-27 and GCC figures myself)

New Zealand is the only CANZUK country where CANZUK would be the top recipient of exports (or even in the top three). But that’s overwhelmingly down to Australia, where 17% of New Zealand’s exports go. The UK makes up 3.4%. (Incidentally, the EU-27 accounts for about twice that.) Again, New Zealand is mainly an Asia-Pacific economy.

So all four of our prospective partners show the usual truth in trade: countries tend to sell to their neighbours. The UK, Canada, Australia and New Zealand are already mature, developed economies, so any idea that their vast growth potential could make up for diversion from elsewhere doesn’t stack up. There is no sensible case for CANZUK as a main economic bloc for any of its members.

But CANZUK has been sold as a geopolitical partnership, not just (or even mainly) an economic one. Do the defence and security arguments stack up any better? Clearly the four countries spend a large amount on defence between them — over $96 billion, though nearly 60% of that is spent by the UK. We have served together in many conflicts. Australia and New Zealand are committed to each other through ANZUS. Canada and the UK are allied through NATO.

But again, look at members’ defence strategies. The four countries share two main things: a predominant focus on their own regions and a critical dependence on the US. Our most important joint defence endeavour is the Five Eyes, where the US is the most powerful member. Only the UK even aspires to have a global reach in its own right. Our Strategic Defence and Security Review cited our military and intelligence’s ability to ‘project our power globally, and … fight and work alongside our close allies, including the US and France, to deter or defeat our adversaries.’ Note the US and France are the two main allies cited. It is abundantly clear that the UK’s main defence commitment lies in NATO.

Australia’s Defence White Paper from last year is clear. Its priority is to ensure an independent ability ‘to defend Australia and protect our interests in our immediate region,’ and then to ‘enhance Australia’s ability to contribute to global coalition operations.’ Its two principal allies are the United States and New Zealand. Canada’s key roles are ‘defending Canada,’ ‘defending North America — in partnership with the United States’ and then ‘contributing to international peace and security.’ New Zealand’s focus includes the need to ‘defend New Zealand’s sovereign territory’, ‘meet New Zealand’s commitment as an ally of Australia’ and ‘contribute to, and where necessary lead, operations in the South Pacific’.

Granted, the UK, Australia, New Zealand, Malaysia and Singapore have one joint security commitment. They have agreed to consult on responding to a threat to the latter two countries. But the Five Power Defence Arrangements aren’t a collective security agreement. They stem from a UK withdrawal from commitments east of Suez in 1968–71, not a willingness to take on new ones.

The FPDAs are generally agreed to contribute to security. But does anyone believe the UK and Canada could possibly defend states in the Pacific in an existential crisis without the US? Would Australia and New Zealand be in a position to assist in Europe if the roles were reversed? That may be a remote prospect, but a true collective security commitment requires the answer to be ‘yes’. I don’t think anyone actually believes that would be the answer without the Americans. So what, meaningfully, are we going to do together in the field of security and defence on our own?

There’s no decent case for making an economic priority of CANZUK. There’s no real defence or security case for it either. We’re all liberal democracies with similar positions on global issues, but we can already co-ordinate our foreign policy as and when we want. No doubt we could bring in freedom of movement between our countries if we particularly wanted, though it’s hard to see that as practically transformative. But in the end, this is about sentiment.

If ever the UK needed to be frank about its role in the world, the time is now. Brexit is going to be damaging anyway: if we get it wrong, it could be catastrophic. Our priorities are to minimise the damage to our relations with our nearest neighbours, try to keep the transatlantic alliance in one piece and develop economic ties where they will do most good.

Whether we’re ‘more like’ continental Europe or mainly-anglophone-developed-democracies-but-not-the-US is subjective and highly politicised. Much of the argument boils down to rival sentiments. But our trading patterns, principal threats and security priorities aren’t sentimental. And an economic, foreign or defence policy governed by sentiment would be doomed to failure.

This post was originally published on Medium.com on 8 April 2017.

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A Brexit speech for a Labour leader

I stand here to give a speech which I had hoped not to have to make.

I campaigned hard for Remain before 23 June. I wanted the United Kingdom to stay in the European Union, as did 16 million fellow Britons. But 17 million fellow Britons voted otherwise. They delivered a clear, though narrow, verdict.

Labour has said that we respect the referendum result. And so we do. The United Kingdom, as the Prime Minister has said, is leaving the European Union. I am not here to talk about how to stop Brexit, but how best to implement it.

We respect the decision taken; we also respect the fact that it was narrow. We live in a deeply divided country. If we want to bring it back together, we have to find a settlement which can appeal, at least in part, to both sides of the national argument last year.

Perhaps that sounds uninspiring. Boring, even. But if the referendum made anything clear, it showed that we have become far too divided a country.

I believe we need to rediscover the virtue of compromise; of remembering that we usually do have more in common, as Jo Cox MP – so tragically taken from us last year – said in her maiden speech; of meeting our friends and neighbours halfway.

Labour believes that ‘by the strength of our common endeavour we achieve more than we achieve alone’. But working together requires finding common ground. And today I want to outline how Labour would make that possible.

Listening to Leave voters

Any attempt at doing that must start with asking ourselves: what were Leave and Remain voters saying on 23 June?

For Leave voters, sovereignty played a crucial role. There is always a balance here. We can keep our rights to do things our own way, on our own – but that often means the way others do things affects us and shapes our own choices, sometimes decisively or almost completely.

Or we can agree to do things together with other countries, knowing we’ll have to compromise a bit, but often having a greater real say in the overall package than we’d have had on our own.

Just as no-one sensible believes that we can’t do anything together with other countries, no-one sensible believes there’s nothing we can best deal with by ourselves. There’s no 100% right answer to where the line is: and those of us who campaigned to Remain must accept that we failed to convince enough people that the line lies in the right place now.

The UK’s global ties were also important to many people who voted to leave. Our global story is also part of our European story. For better and for worse, Britons, French, Spaniards, Dutch, Portuguese and many others crossed the seas – as soldiers, settlers, farmers, factory workers, missionaries and far more. As Quebec and Latin America could remind us, transatlantic ties are not just the United Kingdom’s to enjoy.

But the UK has an exceptionally strong sense of its global ties today. That’s partly down to the English-speaking democracies with whom so many Britons share bonds of family, friendship and affection. It’s partly due to the sheer reach of past British expansion. And of course, it’s partly linked to our distinctive version of shared sacrifice in two world wars.

There’s no conflict between being European and having ties elsewhere. But I fear pro-Europeans too often – without meaning to – managed to join some opponents of the EU in inventing a tension where there didn’t need to be. And we know many who voted Leave thought of our friends further afield when they made their decision.

And third, of course, migration. Too many people have talked as though this was the only thing Leave voters thought of. It wasn’t, and we do fellow citizens a disservice in pretending otherwise. But no-one can deny that concerns, fears and anger about migration played a crucial role in the vote on 23 June.

Now, at this point Labour politicians go on to talk about wage levels, about exploitation of migrant labour, about funding for public services in areas of high recent migration – and I will. We must condemn prejudice and celebrate the contribution immigrants make to the UK – and I will always do that. But economics doesn’t address all the reasons many people are worried, even angry.

Much of people’s concern about immigration stems from culture, not economics. I am not saying that anyone with these concerns is racist or prejudiced. I am saying that many people, probably most, are ambivalent at best and unhappy at worst about rapid and unmanaged change, especially when it feels done to them rather than with them.

Concern stems from views about different cultural attitudes, too. Everyone has characteristics and instincts shaped by their nationality and upbringing, so this is not a attack on anyone’s worth or culture. It’s simply to say that, just as people with different personalities can sometimes need to think about how to get along, so can people with different cultural backgrounds. And we have shied away from that discussion for too long.

Reassuring Remainers

So any way forward needs to find a way of speaking to those concerns. But what of the second-largest number of votes cast for any cause in British history? What about those who voted Remain?

First, we need to acknowledge many Remainers’ strong sense of internationalism – not a passionate love of European institutions, but something broader than that. Many Remain voters don’t just see it as a practical necessity to get on with the neighbours; they believe it to be a good thing in itself.

Many have travelled elsewhere in Europe; they may have friends there, or remember spending time there themselves. They value their, their children and their grandchildren’s rights to live and work elsewhere.

And of course, many of us remember the European Union’s origins as a peace project – a way for Europeans to argue in council chambers over product standards, not with tanks over borders. As they go to Brussels, UK ministers need to remember that too, and respect how seriously our partners take it. It is not only a majority of UK voters who can value politics and history just as much as economics.

Second, a commitment to EU rights and standards loomed large for many Remainers – especially Labour Remainers. It would be easy for me to attack a Tory Government here, and rest assured we will whenever it is merited. But it goes deeper than that.

The rights to parental leave, to consultation at work, to protection for temporary employees; it is indeed often true that the UK’s legislation goes further than the EU minimum. But European minimum standards set a floor for all of us – not just the UK. Some Conservatives may want the UK to try to undercut the Netherlands; but actually, the rules help protect all our social models.

Similarly, many who remember what British beaches and rivers were like in the 1970s will know that EU environmental standards have changed things for the better. The EU is one of the world’s most forceful actors on climate change – no, not forceful enough, but more so than anyone else, and one whose word as the world’s largest economy matters.

Tory threats to scrap those rights and standards, to move towards an ever-more-ruthless free-for-all if the EU fails to agree a deal to their liking, are unlikely to survive contact with the voters for now. But it would be exactly the sort of destructive race to the bottom common rules are in place to stop.

Third and most prominently, the economy was a crucial reason millions voted Remain. This isn’t really about the fears of an economic shock – not in the long-term. Those of us who campaigned to Remain should have the grace to say we expected the reaction to be far worse than, so far, it has been.

It is about the inescapable heft and proximity of the European single market. The EU covers around 44% of our exports on its own. Add in the Swiss and the EEA countries, all of whom are in the EU’s single market to varying degrees, and the countries with a partial customs union with the EU, and it’s over half. And that doesn’t even consider the free trade deals already struck by the EU.

Bringing Britons together: a moderate Brexit

So any way forward should address both sides’ concerns, while fulfilling the mandate to leave. We should pursue a moderate, reasonable Brexit: a settlement our country can unite around for this generation. We must also seek a settlement which works for the European Union, whose survival and prosperity is a vital national and continental interest.

First of all, a moderate Brexit must be moderately implemented. In particular, we cannot allow ourselves to be driven off a cliff-edge by an ideological insistence on the fastest Brexit possible. The negotiations which lie ahead are the most complex we have had to negotiate in modern times. We must allow for a transitional deal, so we have time to get this right.

I believe our final deal must include membership of the single market. In many ways, the single market is a British invention. It goes far further than any free trade deal ever can. The reason Theresa May talks of preserving ‘single market arrangements in some areas’ – never mind the fact our partners won’t stand for cherry-picking – is this: she knows full well they cannot be bettered outside the single market.

It is quite possible to be in the single market and outside the EU. Plenty of Leavers looked to Norway’s place in the European Economic Area before the referendum. The EEA focuses on exactly the thing many eurosceptics in the UK said they always wanted: the most unfettered trade possible within Europe.

Norway is not in the EU. It plays no part in the Common Agricultural Policy or the Common Fisheries Policy. No EEA law takes direct effect in Norway; the Norwegian Parliament enacts it, and has more flexibility than an EU member. Political union is not an aim of the EEA. Norway makes smaller contributions to shared activity than it would as an EU member. There is a safeguard clause for legislation with unacceptable consequences – though Norway has very rarely had to use it. In principle, the EEA or something like it is the main arrangement able to include passporting for financial services.

As the Prime Minister has said, trade is not the only area where we wish to work with our European allies. Climate change is a shared challenge. The EU’s Emissions Trading System also includes Norway. The UK could be a leading player in green energy if it wanted to be, so it makes good sense for us to seek to stay inside. We should be no less keen to work with the rest of Europe on security and extraditions after Brexit than we were before and should be keeping the substance of the European Arrest Warrant, as far as possible.

The customs union and the Irish Border

Finally, the Prime Minister has argued for a renewed focus on trade deals elsewhere in the world once we leave the EU. I understand this: one argument for Brexit was pursuing new markets elsewhere. But at the moment, as a part of the EU’s customs union, our businesses are spared a tidal wave of paperwork in exporting to the rest of the EU. We are also spared customs checks on our only land border.

This is a difficult choice. Making the best of Brexit might be argued to require looking across the world for new business and new markets. But it is hard to see how the UK is likely, for now, to strike the kind of deals which would make up for such major new barriers with our largest market.

Above all, we cannot risk creating a hard border on the island of Ireland lightly. Any changes to our position in the customs union will require the closest consultation with Ireland and with the Northern Ireland parties. Labour will press the Government to ensure this happens.

Any measures which could reduce the burden of checks should be considered: facilities to carry out EU customs checks in the UK for Ireland-bound goods and vice versa, for instance, or ways of pre-certifying goods bound across the Irish Border. We should learn from Norway and Sweden, who ensure only one national authority needs to check goods. The UK should stand ready to discuss how such measures might be delivered and funded with Ireland.

And if broad consent in Northern Ireland can be found for special measures or some special status there, then – given its unique position – the UK, Ireland and the EU should give them the most serious consideration.

The issue of the customs union is almost uniquely difficult. We need time to address the challenges it raises. We should remain in customs union with the EU during the transitional period, during which we will be seeking to re-establish the trade deals we currently have as an EU member. We can do that from within a customs union with the EU.

And let us then take our final decision on its future on evidence, not ideology.

A close neighbour and a closer Union

My judgment is that the best approach – one which increases our domestic sovereignty, allows a renewed sense of global ties, supports our economy and protects our social rights – lies in membership of the single market, through the EEA or some other means.

I believe this path, together with close co-operation in security and foreign policy, reflects our position as a European nation with ties elsewhere. A close friend to the EU for whom its degree of integration has proved too great.

It also speaks to all four countries in our United Kingdom. The Scottish Government has been loud in seeking a differentiated solution for Scotland. The Welsh Government has put forward proposals of its own.

I do not believe the right solution for the UK is to create new borders within the UK. It is, instead, to respect the devolved nations’ concerns as part of a UK-wide settlement. Not Nicola Sturgeon’s seeming determination to use Brexit as a wedge for separation; not Theresa May’s seeming indifference to the views of Scotland, Wales and Northern Ireland; but a settlement which can bring us all back together.

Free movement as managed movement

But I am not going to lie about the price of staying in the single market. Too many politicians have peddled too many myths over the years. The price of staying in the single market is some form of free movement of labour.

We have to understand that our EU partners are not bluffing about this. The European project relies on common rules for common benefits. For them, conceding that principle sets a dangerous precedent for the future. If one country can unpick parts of the single market, others can too. We need to recognise this and respect it. But I also know immigration was one of the main reasons people voted to leave the EU.

Faced with this, some say we should offer up our own people’s jobs on the altar of cutting migration. Others say we should ignore public concerns and carry on regardless. Still others say we should simply demand the single market and a end to free movement. The first ignores our people’s future; the second ignores democratic reality; the third ignores the clear views of our European partners. None of these are good enough.

What we need to do is find a way to handle the way free movement operates – and, over time, to better handle the pace of change. Not ‘free movement’ as we have implemented it in the UK so far, nor a denial of economic reality, but managed movement.

First, we need to make better use of the powers we already have to manage movement from the rest of Europe better. There’s no need to wait for Brexit to do this; a Labour Government could start working on it now. After three months, we actually have a right to tell EEA citizens they need to show they are working or studying or have the resources to support themselves if they wish to remain in the UK. We don’t do it at the moment. Let’s look at it.

Second, there are issues we can talk about in Brexit negotiations, especially around benefit claims and hiring policy. Of course, the vast majority of EEA citizens actually come here to work. But because of the way tax credits work in the UK, we do have concerns here about whether people have made a contribution before they start to receive benefits as well.

Article 112 of the EEA Agreement allows non-EU members to take safeguard measures if there are ‘serious economic, societal or environmental difficulties of a sectorial or regional nature liable to persist’. We should, if possible, seek a political understanding that the UK will take some proportionate action on EEA migrant benefits as an EEA member. We should also explore the possibility, as the Swiss (with extensive single market access, though not EEA membership) have recently, that those who have registered as jobseekers in the UK might be given priority for jobs over new arrivals.

We should also take action on wages and skills, so more British people are able to do jobs which others currently fill. Some pro-Europeans have bemoaned the rise in wages offered by agricultural employers in Lincolnshire. Not I. No social democrat worthy of the name should bemoan a better deal for low-paid workers. Labour’s commitment to higher wages and to tackling exploitation could open more of those jobs to British citizens.

We need to do far more both to support British citizens to develop new skills – so they have no need to worry about competition from others, because they will know they can hold their own. And considering migration from outside Europe, we should be willing to probe a bit deeper on whether we could be training more people here. If we struggle to find people in the UK who want to work in Indian or Chinese restaurants, for instance (as we have in the past), we should ask why more often.

Finally, we need to talk more about integration. The vast majority of people who make their home here want to play a full part here. In reality, people in the UK are mostly pretty good at getting on together. And evidence suggests that when people are reassured that immigrants overwhelmingly do wish to contribute, join in and integrate – which they do – their concern about immigration falls considerably.

So partly, we need to reassure people and show we value people living together, not just living beside each other. We should not be relaxed about the idea of people living parallel lives.

But there are some areas where we do have a problem. And it is progressive to say as much and look to do something about it. There is nothing left-wing about people, disproportionately women, finding themselves unable to get help they need or talk to people in their local area because they don’t speak enough English. There is nothing left-wing about cutting government funding for language classes. And to ask (and fund) councils to do more to support integration in their local areas would be good for new immigrants and established communities alike.

No one policy or strategy will succeed in squaring this circle. But making use of the powers we already have, seeking adjustments where this is feasible, taking real action on wages and skills and doing more to ensure people live together not apart can both better manage the pace of change and help address its consequences.

Wider Europe

No speech on UK strategy should ignore our wider European role outside the EU.

The UK is a European country and we must remain committed to European values. That includes the Council of Europe – wholly separate from the EU – and the basic values enshrined in the European Convention on Human Rights.

The ECHR is the Council of Europe’s greatest creation and one of the world’s most remarkable backstops for basic decency anywhere in the world. Britons led the way in putting it together; assumptions that long informed the common law became part of its warp and weft.

Our membership of the Convention does not just matter to us: it matters to our whole continent. The European Court of Human Rights is far from perfect, but it matters to Russian human rights activists who struggle to get their cases to Strasbourg. It matters to novelists in Turkey who look to the Convention to help protect their free expression.

Quite rightly, our neighbours would be appalled were the UK – one of the world’s great democracies – to withdraw from its commitment to such a basic instrument of human rights protection.

Co-operation on extradition, on security and much else besides could be threatened if we no longer adhered to common human rights standards. Further, our influence in the counsels of our continent – a continent in which we will always need and wish to play a role – would be badly hurt.

But above all, the true values and true nature of the country where Amnesty International was born could never be served by turning our back on human rights protections. We seek a different relationship with the rest of Europe. But Labour wants no part in abandoning Europe’s finest values.

Protecting the West

The United Kingdom must also remain unequivocally committed to the collective security of our continent. How and to what extent we co-operate with the EU on military matters is a matter for negotiation, but our commitment to our continent through Article 5 of the North Atlantic Treaty is not. We stand with our neighbours.

And here, we cannot ignore the challenges to our east and the changes to our west. I don’t propose to say too much about President Trump today. The UK, and Europe as a whole, must of course retain a close relationship with the United States, above all through NATO. We must also be able to speak frankly where we disagree.

But we Europeans must recognise that our ability to speak frankly and our ability to defend ourselves are intrinsically linked. Credible defence is the foundation of an ethical foreign policy, to coin a phrase.

To our east, Vladimir Putin leads a country which, just three years ago, altered the boundaries of Europe to its own direct benefit for the first time since 1945. That country’s interference in the democratic processes of the West is now well-documented.

The UK, as Europe’s leading defence power, retains a crucial role in Europe. We must not abdicate it. We must build on our links within NATO, and our bilateral agreements with France. We should also seek to retain the right – like Norway, Serbia, Switzerland and Ukraine – to take part in joint procurement via the European Defence Agency, where this is in our interest.

But above all, we and other Europeans must have a serious, honest conversation about our defence capabilities. It should go without saying that the target of 2% of GDP on defence should be met by every NATO member. But more than that, we must ask whether that level will suffice to keep our continent safe.

Because we may be leaving the European Union, but we could not leave Europe even if we wanted to. And our neighbours’ security will always be part and parcel of our own.

Labour’s approach today

So we seek membership of the single market; a close relationship with the EU after Brexit, while strengthening our ties elsewhere; a balanced approach to managing migration within the single market and from outside the EU; and a firm commitment to European values and security. Where does this leave Labour, facing a Conservative Government?

We will be a responsible Opposition. The times are too grave to play games now. We will judge the Government against the vision I have set out, and we will reach out to other parties and other MPs who share some or all of it. And where the Government get it right, we will support it.

So I say this to the Prime Minister: you are not the prisoner of your backbenchers. You need not put their ideological obsessions above our country’s interests. Where you do the right thing for British jobs, British workers and British safety, Labour will support you. You can be as brave as you want to be.

In Government, we will accept that the question of EU membership is settled for this generation. But if this Conservative Government drags the UK out into a hard, damaging, reckless Brexit, Labour will work towards a partnership of the kind I have described today. We will reach out the hand of friendship to our fellow Europeans and bring our fellow Britons back together.

Perhaps it is unusual for a Labour leader to cite Churchill rather than Attlee. But in a speech about reuniting a nation, it makes some sense to look across the party divides. On 11 May 1953, he said:

Where do we stand? We are not members of the European Defence Community, nor do we intend to be merged in a Federal European system. We feel we have a special relation to both. This can be expressed by prepositions, by the preposition “with” but not “of”—we are with them, but not of them.

Churchill was enlisted by both sides of the referendum debate. But it might be fitting if our new place in Europe and the world reflected his real complexity more than the partisan moulds into which he has been shoehorned.

The future I describe is not the one I argued for before 23 June. But for this moment, for this generation, it might be one with which we all can live.

On Article 50

Whether the Supreme Court was legally correct to say that Parliament must legislate before the Government can invoke Article 50 is for others to debate. Rightly, the courts gave judgment and have settled the issue. Politically, I always believed the Government should seek approval from Parliament for its timing and strategy.

But the Supreme Court’s decision places Labour in a truly poisonous position. Most of our voters backed Remain; most of our seats backed Leave. We cannot defy the referendum result; we cannot back a hard Brexit. I do not envy our embattled MPs.

Second Reading

I can see why Jeremy Corbyn wishes to ask Labour MPs to vote for the Article 50 Bill at Second Reading. And ultimately, I won’t blame him for that, although I disagree with a three-line whip. I know Labour cannot simply ignore the referendum result, and that many – probably most – will feel they should vote in favour to show they accept that result.

But Labour MPs overwhelmingly backed Remain. In many cases, their constituents did too. MPs like Jo Stevens, Catherine West and Tulip Siddiq put themselves at great risk if they ignore their own residents’ views. And some – those who are and have always been committed Europeans – will feel their consciences can only stretch so far.

I accept parties of government must have a position on such issues, but frankly I see little point in pretending Labour is in any danger of being in government soon anyway. The current struggle is for survival – one which many MPs will struggle to win if they alienate their Remain-voting constituents. Jeremy can take his position, and most Labour MPs will back him, but it is divisive and unhelpful to force MPs’ consciences at Second Reading. MPs will split hopelessly anyway; best to make some shred of virtue out of overwhelming necessity.

Third Reading

The more important question for the national interest is how Labour MPs vote at Third Reading. Here, there comes a point where Labour MPs must consider the policy consequences of their votes, however electorally inconvenient that may be. Reluctantly, I accept the country voted to leave: overriding the vote without a referendum would be anti-democratic and could occasion a terrible backlash against mainstream politics, and we would lose a second referendum by a larger margin than the first. We now need to try to minimise the damage. As such, I recognise Labour cannot reject Article 50 en masse regardless of the circumstances.

But once the UK triggers Article 50, we have a two-year window in which to negotiate an exit agreement, hopefully with a transitional deal as we move to a new relationship with the EU. It’s all very well to talk about meaningful parliamentary votes on the deal, but we can only extend those talks if every other EU member agrees. It’s legally uncertain whether we could even revoke Article 50 outright unilaterally, but clearly the Government will not do so. That means a vote on the final deal on exit and transition is very likely to be a choice between whatever May comes up with or nothing at all. Backing the Tories’ deal or being thrown out on WTO rules isn’t much of a choice.

If Parliament really wants to influence the shape of Brexit, it has to exercise that influence now, before the two-year countdown starts. And that means Labour’s backing for the Article 50 Bill must depend upon the amendments the Commons passes. If Labour MPs will not vote against the Article 50 Bill at Third Reading in any circumstances, they will effectively show that in the final analysis, they are prepared to let any kind of Brexit through.

The referendum gives Theresa May no right to a blank cheque. Nor does she have a right to ride roughshod over the views of Scotland, Wales and Northern Ireland’s administrations and legislatures. Her form of Brexit will do enormous damage to the people Labour represents. It may well poison our relations with the rest of Europe at the very time when the United States may abandon our continent too. Labour should not sign her cheque so long as it stays blank.

Labour and Brexit

More broadly, Labour needs to be frank about the true implications of what Theresa May plans to do. She has said she wants to leave the single market and the customs union, although she seems to have some notion of simplifying customs proceedings. Responding to her speech, Keir Starmer said: ‘It is good that she has ruled out that hard Brexit at this stage.’ He also said ‘I accept that form follows function’.

His response ignores the secret of the single market. The rules and institutions of the single market are the single market: the form creates the function. It is simply not the case that May’s ‘bold and ambitious free trade agreement’ will do the same job. And Labour does no service to scrutiny by allowing that elision to pass unchallenged.

Jeremy Corbyn’s response shows where such a path leads us:

We welcome that the Prime Minister has listened to the case we’ve been making about the need for full tariff free access to the single market but are deeply concerned about her reckless approach to achieving it.

It is simply not good enough to say ‘hard Brexit’ is only about process, not endpoint. Labour should back remaining in the single market and level with voters about the tradeoffs – as well as the reality of our EU partners’ position. The Opposition should puncture the Government’s delusions, not indulge them.

In conscience

Finally, I will not lie about what I would do at Second Reading if I were a Labour Member of Parliament. I could not in good conscience vote to give any impression I approve of what we are about to do. I do not approve, even if I try to be resigned. I am a passionate European and I always have been. I believe the European project is, for all its faults, the greatest attempt to build relations between our countries on the basis of law and not just power we have ever seen. I believe it has made an invaluable contribution to peace, democratisation and constitutionalism on the continent of Europe. I believe it is part of a web of institutions and habits of mind and inaccurate historical memories, a web which helps keep the dark heart of man at bay. And I would not want it said that the United Kingdom’s representative assembly walked away from it as one.

1707 and 1973: Scotland, the UK and Brexit

When a 62% Remain vote in Scotland met a 52% Leave vote across the UK, the Union of 1707 looked shaky to many. Nicola Sturgeon promptly said a second independence referendum was highly likely. Support for Yes spiked briefly in the polls. Frankly, as a half-Scottish European, I was severely tempted myself – despite being a fervent Unionist in 2014.

Since then, somewhat to my surprise, support for Yes now looks pretty similar to 2014. This has, so far, held even as it’s become clear Theresa May takes a hardline view of the Brexit vote. No doubt as a result, Sturgeon – who has no desire to lose a second referendum and really bury the issue – has tried to keep her options open. Her stated position is that her priority for now is to keep the whole UK within the single market. This would be the best possible Brexit outcome for Scotland and for the rest of the Union.

However, she has also spent plenty of time arguing Scotland could stay in the single market even while the rest of the UK left. Clearly, this ‘differentiated solution’ has a distinct political edge: Sturgeon has an interest in the UK being seen not to meet Scotland’s wishes. Still, the UK was always asymmetrical, and voters in Scotland voted decisively to remain. It is also fair to say Sturgeon has softened her position quite a bit from demanding Scottish EU membership post-Brexit. So taking it at face value, what would the differentiated solution entail?

The ‘differentiated solution’: Liechtenstein-in-Europe

The Scottish Government’s paper Scotland’s Place in Europe suggests Scotland could stay in both the EEA and the UK customs union. The document cites the principle of ‘parallel marketability’. This is the model Liechtenstein uses vis-à-vis Switzerland, while participating in the EEA. Because Liechtenstein has a customs union with Switzerland, it has to adopt Swiss technical standards and regulation in a wide range of areas. But the EEA also requires Liechtenstein to adopt its technical standards and regulation.

As a result, EEA and relevant Swiss law are now simultaneously applicable in Liechtenstein. Liechtenstein agreed this with Switzerland, and the EEA also agreed to accept the arrangement. Products meeting either Swiss or EEA standards can be sold in Liechtenstein, but EEA law trumps Swiss when dealing with the rest of the EEA. Liechenstein also had to create a Market Control and Surveillance Mechanism, so neither EEA nor Swiss rules were broken outside the principality.

The Swiss Federal Customs Administration collects duties on goods entering the whole customs area. It informs Liechtenstein’s Office for the National Economy when goods are destined for Liechtenstein. Where customs tariffs are different (some EEA goods attract tariffs in Switzerland, but not Liechtenstein), duties are reimbursed. Importers are informed of their obligations, including proofs of sales in Liechtenstein.

Why it wouldn’t work for Scotland

For Scotland, this presumably means HM Revenue and Customs would continue to collect duties for the whole UK. It would then inform a Scottish public body where requirements differed and when goods were destined for Scotland. By analogy with HMRC, the Scottish body might be a beefed-up Revenue Scotland.

The UK would also have to devolve much of employment, commercial and competition law, so Scotland could implement EEA law. Alternatively, the UK might confer a general power to implement EEA rules on Holyrood. But that could cause chaos in UK-wide law.

Where the UK’s rules didn’t mirror the EEA’s, new non-tariff barriers would arise, which poses a major problem. 64% of Scotland’s exports (excluding oil and gas) go to the rest of the UK, compared to 15% going to the rest of the EU. Even ignoring the fact that much of the oil and gas also goes to the rest of the UK, it is clear who Scotland’s main trading partner is. The Scottish Government would say the model keeps UK goods standards for UK trade. But Scotland is mainly a service-based economy. In fact, Scotland trades more in services with the rest of the UK than it does in goods. The position is reversed in trade with the rest of the EU.

So given that, what happens as UK and EEA employment law start to diverge? What about financial services regulation, especially when UK financial services are so intertwined? What if EEA competition law is tougher than the UK variety – what does that mean for a UK-wide company operating in Scotland?

The problem gets worse when you remember this is Sturgeon’s proposal in the event of a hard Brexit. The further the rest of the UK pulls away from the EU, the more acute the problem becomes. In Liechtenstein’s case, Switzerland adopts most of the acquis communautaire for goods anyway, which softens the dilemma. The UK may well copy a lot of EU regulation anyway, as it discovers the irritations of diverging from its main trading partner. But to the extent that it doesn’t, Scotland will pay a price.

Above all, Liechtenstein is a small and sovereign state. Legally, presumably the UK would need to join the EEA and then restrict its territorial application to Scotland. Scotland would then need powers to take part in the EEA Joint Committee and the EEA Council, appoint a judge to the EFTA Court, select a member of the EFTA Surveillance Authority College and so on. Spanish domestic politics on their own make it clear this won’t happen. But even if the politics could be resolved, the cases are fundamentally different. Liechtenstein has about 37,000 inhabitants. It is tiny, and therefore allowed to be anomalous. Scotland, on the other hand, would have the largest EFTA population in the EEA. It would also be far more closely bound to the rest of the UK than Liechtenstein ever was to Switzerland.

Liechtenstein’s single market model is not workable for Scotland, any more than its migration quotas set a precedent for the UK. Pursuing it undermines the overriding need for a sensible UK-wide deal.

On Brexit, powers reserved should be powers shared

With the partial but crucial exception of Northern Ireland, the form of Brexit mostly needs to be settled UK-wide. But that doesn’t mean Scotland’s (or Northern Ireland’s) distinctive views should be ignored. The UK-wide settlement needs to be a compromise befitting a narrow vote and a territorial split.

In many ways, Scotland, Wales and Northern Ireland have federal relationships with the UK. Each has a legislature of its own as well as the UK Parliament. Powers reserved to the UK Parliament are specified in law. The courts can decide if devolved legislation exceeds devolved powers. Devolved powers aren’t meant to be changed unilaterally, though what that means is obviously disputed.

One key difference with federalism is the lack of formal protection for devolution. Unless Section 28(8) of the Scotland Act 1998 is read very radically indeed, no court would actually stop the UK Parliament legislating over devolved legislatures’ heads. But another is the lack of a mature federal political culture. Federalism usually involves shared rule as well as self-rule – an idea that a state’s nations or regions have a say in government at the centre. In a state large or diverse for federalism, central government has to govern with the territorial dimension in mind.

This is why many federations have indirectly elected second chambers. It’s why federations usually require some or all constituent territories to agree some or all constitutional changes. Modern federalism requires governments to work together. But at the moment, we ‘deal’ with problems between the UK’s nations by ignoring them or offering more powers. With Brexit, working out where to handle powers no longer exercised at EU level will matter a great deal. One of the many arguments for the EEA is that it spares us the need to create a framework for a UK single market which neither undermines devolved powers nor means more non-tariff barriers within the UK.

If the SNP wants to serve Scotland’s interests, however, it needs to recognise the UK can’t just devolve itself out of this problem. Scottish Labour, meanwhile, should push hard for UK Labour to back staying in the single market. But in some ways, it’s the Scottish Conservatives who bear the biggest responsibility.

After the referendum, Ruth Davidson said she’d prefer to stay in the single market post-Brexit. She has built her success on being an uncompromising voice for the Union of 1707. No one will ask her to row back on that. But Scottish unionism shouldn’t just be about keeping Scotland in the UK, but helping Scotland shape the UK. The Scottish Conservatives have political capital. Ruth Davidson is highly respected by her UK party. She has shown Tories can make headway in Scotland. She should use it to make Brexit respect Scotland’s interests, and work better for the whole UK.

What happens otherwise?

Some of the Tory right will say Scotland wouldn’t really leave over Brexit, hard or soft. Well, it might or it might not. Brexit complicates and sharpens the choice for Scotland, and the harder the Brexit the truer that will be. Scots would need to be prepared for a decades-long, probably very painful reorientation. It would be a far more radical form of independence than Alex Salmond proffered in 2014.

But wise unionists should want to reduce Scottish discomfort within the UK, not foment it. They should also beware of assuming Scotland would never jump. A Scotland where 45% voted to leave the Union is not one where the Union is secure. It is one in which the Union has much to prove. If Theresa May really cares for its ‘precious, precious bond’, she would do well to bear that in mind.

Saving the single market

Dear Labour MPs

The referendum result is a terrible tragedy, but I understand the people have spoken. I am not asking for a second vote unless voters actually want one, which they clearly don’t now. I accept we have to try and make the best of Brexit. But we shouldn’t just let its most hardline advocates define our future. I am horrified that so many Labour MPs who campaigned to remain are saying an end to free movement of EEA nationals must now be a red line.

Most of you campaigned for Remain – so you know the EU means what it says about the single market’s four freedoms being indivisible, because you travelled the country saying so. But to reiterate: Brussels is not bluffing. The European project relies on common rules for common benefits. Conceding that principle sets a dangerous precedent for the future – throw your toys out of the pram, walk away from your neighbours and reap the rewards. It would be a tragedy of the commons on a continental scale.

Some of you talk about an ‘ambitious negotiating strategy’ to try and square the circle. Yes, other EU countries face challenges too: the threat from Marine Le Pen, Angela Merkel’s difficulties with the refugee crisis, Matteo Renzi’s upcoming constitutional referendum. But offering Britain some sweetheart deal would make their electoral troubles worse, not better. Polling clearly shows their voters do not want us to get any such deal. Some mainstream politicians have talked about greater border controls on entering the passport-free Schengen Area or even longer-term ones within it, but curtailing or ending EEA free movement rights is a distinct issue. Renzi has said an end to free movement won’t happen. Whatever changes Sarkozy puts forward for Schengen, he’s not challenging EEA nationals’ rights (and no French mainstream candidate will go further than him).

Some might point to the fact that, technically, EU free movement is on a different legal basis from the models the EFTA countries apply. The EEA countries have slightly different rules on free movement – essentially, EU citizenship is not a relevant concept and the right is (technically) free movement of workers rather than people. If Switzerland’s compromise on ‘local preference’ in hiring gets consent from Brussels (far from guaranteed), perhaps we could secure something similar to effectively stay in the single market in goods (though not in services). The Swiss model would harm a country as dependent on service exports as Britain. Either approach keeps free movement – and selling tweaks as radical changes failed dismally in the referendum. In the end, you only put off the evil day when we have to choose: do we accept the single market’s rules or not?

If Britain insists on ending free movement, therefore, we will make our way out of the single market. That will damage working people’s incomes, jobs and communities far more than immigration ever could. The evidence simply does not support the idea that immigration depresses wages overall. At worst, it may have a small effect on some low wages – though even then, it mainly seems to affect other migrants rather than British workers. Of course, if you’re on the breadline, a small change has a big effect. But the lost jobs and tax revenue (and guess whose tax credits or public services will be cut to make up for that?) from hard Brexit will dwarf any notional gain in wages.

To be clear: this is not about metropolitan liberals refusing to listen to anyone outside the M25. I understand you want to meet voters halfway on immigration. And yes, we probably have relied on low-paid labour from elsewhere too much and for too long. You can talk more about training our own people. You can ask why we don’t pay enough for British people to do more of these jobs. You can say tackling both of these could reduce immigration and slow the pace of change. You can spell out that people feel that their society changed too fast without their being asked. You can use plainer English to talk about the issue – metropolitan liberals should stop insisting that you tie yourselves in linguistic knots whenever it comes up.

But there is a difference between doing all that and staying quiet while the Tory Right sells us snake oil. It won’t appease people in the end anyway. What do you think will happen if Britain marches to hard Brexit and the country ceases to be a gateway to the world’s largest single market? Do you think angry voters will be less angry once investors go? Once Nissan leaves Sunderland? When people find themselves without work? What will Labour say to them then?

You are the Official Opposition. I realise fulfilling that role is much harder with our current leadership. But you are still the second largest bloc of MPs, and you can put pressure on a Government with a small majority in perilous times. Theresa May could well be held hostage by those Conservative MPs for whom no level of anti-European zealotry would ever be enough. Labour MPs need to press her to minimise the damage Brexit does, not encourage her to maximise it.

Yes, the referendum result mandates some form of Brexit. But all of us, not just some of the 52%, should have a say as we decide what form we choose. Please reconsider, for all our sakes.

Best wishes
Douglas Dowell

Europe after Brexit: what now?

Brexit is disastrous for the UK, but also a crisis for the EU. Some EU observers (generally firm federalists) have argued Brexit will do the EU a favour, on the basis that an obstructive UK has been an obstacle to building Europe. They are making a serious mistake – one which risks blinding them to how best to mitigate the damage done.

Britain was the second-biggest economy in the EU. It’s now the third-biggest, courtesy of the Leave vote, but it remains one of the major developed economies. It has been a powerful voice for a deeper, more complete single market. In foreign and defence policy, it plays an important role. Granted, Britain is already semi-detached in many areas and was due to become more so. But despite its Government’s worst efforts in recent years, its size and strategic assets have made it an important voice in the EC and then EU since 1973. Now it has set a deadly precedent. A member state pulling out of the EU is no longer an abstract hypothetical, but a real option. Europe’s future may well depend on getting its response right.

British citizens need to show some humility in commenting here. Britain voted to leave: quite fairly, the EU is hardly going to design itself to suit us. Of course, the Bratislava Summit also shows that ‘the EU’ includes many different actors (as ever). I write, though, as a committed European who wants to see the EU survive and prosper.

How should the EU deal with the UK?

Governments of the EU-27 should clearly put the the rest of the EU’s interests first. Britain has the right to decide to leave; it has no right to demand that others continue to go out of their way to help it, having done so. When you leave a club, you forfeit solidarity from the club. The three Brexiteers can bluster all they like; it will only harm their cause, and deservedly so. Frankly, the long-term peace, security and prosperity of Europe are more important than pandering to British exceptionalism.

That said, it isn’t in the EU’s interests to deliberately ‘punish’ the UK. A club of democracies, founded to preserve peace and freedom in Europe, shouldn’t punish a country for voting the wrong way. Further, though Britain is less important to the rest of the EU than it tends to believe, it will be the EU’s largest trading partner on exit and will remain a major player in Atlantic defence and security. A constructive and, preferably, close relationship remains in both sides’ interest.

Overall, the priorities should be: to protect the integrity and viability of the European project; to ensure EU members’ reasonable interests are protected; and to ensure continued cooperation in key areas.

No special punishment, no special deals

The EU should, therefore, neither reward nor punish the UK. Brexit needs to have clear consequences, partly on principle and partly to prevent contagion, and Britain shouldn’t be allowed to escape the fundamental tradeoffs which go with it. But if it is willing to play by the rules, the EU should be willing to play ball.

For instance: the EU should categorically refuse EEA-style single market membership without free movement of labour, the acceptance of relevant single market legislation and a budget contribution. It should, though, be willing to offer the full EEA deal to the UK and seek to persuade the EFTA members to do likewise. And where EEA countries currently join EU initiatives (such as extradition arrangements very close to those in the European Arrest Warrant), the EU should not unreasonably refuse access to a UK in the EEA if it wants it.

In the same way, if London insists on ending free movement, then the EU should be clear that the price is leaving the single market. Any interim EEA-type model should be clearly time-limited, with its endpoint in the EU’s gift and not the UK’s. But the EU-27 should also move a UK trade deal to the front of the queue in these circumstances; the UK will be the EU’s single largest trading partner, so this is in both sides’ interest. And neither side should want the transition to take longer or be messier than necessary.

Ireland

The EU has one member state uniquely affected by Brexit: Ireland. Joining the EC, as it then was, allowed the UK and Ireland to meet as equal partners for the first time. The open border for people is currently possible because free movement of EU citizens (and EEA workers) applies to both; the open border for goods has been underpinned by the EU customs union, removing any requirement for customs checks and rules of origin at the border. EU membership underpins key aspects of the Belfast Agreement. And though Europe has allowed Ireland to emerge from the UK’s economic orbit, Britain remains a vital trading partner for Ireland.

The Irish Government has every reason to be appalled by Brexit. The economic damage sustained will be greater than for any other state except Britain itself. But more than that: British voters have put the open Irish border at risk. People in Northern Ireland grew up with checkpoints and police queries; now, crossing from Derry to Letterkenny is an uninterrupted bus ride. The Belfast Agreement, the end of the checkpoints, the softening of the Border and a virtual end to its day-to-day presence: all of this was key to devising a version of the United Kingdom which Northern Irish nationalists could tolerate.

The EU should do its best to protect Northern Ireland from the consequences of English and Welsh voters’ decision. Its scope will be much more limited if Britain decides not to seek single market membership in order to end free movement and, especially, if it decides to step outside a customs union with the EU. But the European project was founded to end wars: it should put a peace process above ensuring there are consequences for the UK. Legally, Ireland has a parallel opt-out from the Schengen Area and can opt into EU measures on the ‘area of freedom, security and justice’ (or not), like the UK. Ireland’s consent would be required to end this, but the wording may in some cases need to be amended to reflect Brexit. The EU should not make difficulties here where they can be avoided.

Foreign and defence policy

In foreign policy, the UK will remain a reasonably important power, though greatly diminished by its exit, and far more important to the EU than any other democratic European non-member state. Further, Brexit means the EU’s potential in foreign and defence policy is dramatically reduced.

Obviously, the UK has always insisted that these areas should stay intergovernmental. But it boasts one of the world’s best diplomatic services. It is the EU’s largest defence spender. It has a seat on the Security Council. Its international networks and connections are damaged by Brexit, but close cultural and historic ties remain. It has the second-largest development budget in the world. And so on. EU sanctions without UK involvement are clearly much less effective; and in most areas, the UK and EU will continue to share key interests and views. The EU should therefore regard the UK, along with the US, as one of its most important partners for the purposes of the Common Foreign and Security Policy (CFSP) – on Ukraine, Iran, the Middle East and more besides.

Following Brexit, enhanced co-operation on defence may well be revisited in the EU. France, Germany, Belgium and others have often raised this. The UK, by contrast, has always had firm limits here, even though it kickstarted the Common Security and Defence Policy with France. There’s nothing inherently wrong with going further, so long as it remains compatible with the Atlantic alliance: the US supports more credible European defence. But the fact remains that one of Europe’s two main military powers is leaving the EU. Franco-British co-operation would probably be more formidable than the EU without Britain. If the UK shows an interest in European defence co-operation, whether on a Franco-British, multilateral or UK-EU basis, Paris and Brussels’ doors should be open.

Beyond Brexit: what should the EU do now?

Since Britain voted Leave, support for the EU has risen in other countries. Given the chaos which ensued in Britain and the evident lack of a plan on the part of its anti-Europeans, perhaps that’s unsurprising. For now, the mess in which the UK has landed itself will be a deterrent – and as the price it will pay becomes apparent, that deterrent may even grow for a few years. In the long term, though, clearly it will remain a developed liberal democracy, and ‘life after the EU’ will now be a concrete possibility.

Eurosceptics’ gifts to Europe

Obviously, the UK has been more sceptical of further integration than any other EU member state – a fact some have cited to claim the EU will gain from its departure. But other countries have often relied on the UK’s outspokenness to avoid picking fights themselves. When the UK deliberately sat on its hands during discussions about ‘political union’ in the 1980s, for instance, it rapidly became clear most other countries did not actually want to go much further than London did. I suspect we may well see other countries being louder about their own reservations in future, now they can’t rely on the UK to pick a fight first.

More importantly, UK politicians’ euroscepticism may well have helped limit the extent to which the EU has drifted from what its peoples will accept. No one who looks at the referendum on the Constitutional Treaty in France, the rise of Alternative für Deutschland, the anger in Greece, the Dutch vote on the free trade deal with Ukraine or the forthcoming Hungarian referendum on refugee quotas can see anti-EU sentiment as just a British phenomenon. But most other EU countries’ political classes have been more uniformly pro-EU than ours. Britain is an outlier. It’s also Europe’s canary down the mineshaft.

Of course, different countries have different reasons for their scepticism. Worries about migration (either from within or outside the EU) abound. The Dutch, like Britain, worry about whether other EU members follow the rules. The Spanish, Greeks and Italians resent ‘EU-imposed austerity’. The French worry about l’Europe libérale and were always unenthusiastic at best about enlargement. The Nordics, like Britain, have always been relative sceptics. Eastern Europeans only regained real sovereignty from the Soviets a quarter-century ago: they are in no hurry to hand too much of it over again, even on a democratic basis. But the fact that these reasons are so different is exactly the point. Europe’s peoples don’t agree on enough about their preferred destinations, at least for now, for the EU to just march boldly forward after Brexit.

I am a passionate pro-European. I always have been. The first vote I ever cast helped elect the first European Parliament to include eight former Communist states, thanks to the enlargement which is one of our continent’s finest achievements – a Europe whole and free. I will never dismiss how precious it is that EU members don’t even consider war with each other, and I give the EU a huge amount of the credit for that. In an ideal world, I am a European federalist. I believe in European integration, for all Europeans’ sake.

But its most important gifts are twofold: a guarantee that Europeans settle their affairs by rules and laws, not force and armies; and the entrenchment of a constitutional, democratic continent. Its institutions and powers are vital means to those ends (a basic point the British have refused to understand), but they are not ends in themselves. Without a large Eurosceptic member state as a check, the gap between Europe and its peoples could well bring the whole union crashing down. The European ideal must not be sacrificed to European federalism.

Stop, look and listen

Responding with a great leap forward in terms of powers is thus exactly what the EU should not do. European integration is not a bicycle; it won’t fall over if it doesn’t go forever forward in all circumstances. There is, clearly, a vital debate about what powers are necessary to make the eurozone function as a currency union – that was true before 23 June and it’s still true now. But beyond that, EU member states and institutions should state plainly that no major new initiatives to pool more sovereignty are expected for the currently foreseeable future.

EU institutions and governments should, instead, focus on what Europe can do within its current powers to help its citizens, and to show they actually do have some control over the EU. Jobs and economic growth are, obviously, vital here. The exact blend of completing the single market and a strong set of social standards needs to be debated: I suspect explicitly linking the two might both help Europe’s economies and reassure some of its sceptics. A stronger focus on new industries and growth areas throughout the EU, and a commitment by national governments to actually tell their voters what the EU has added, would help too. It may well be worth doing things designed to help job opportunities in Eastern Europe, expressly aiming to reduce migration flows to western Europe. These are only broad-brush points: but they suggest a direction of travel.

Finally, the EU needs to assure its citizens that there are limits to how far its borders will go. Enlargement has been one of the EU’s great successes, which the UK championed. No one should apologise for the enlargement to eastern Europe: bringing the former Communist states into a community of democratic states embodies the best of Europe’s values. The EU is a vital anchor for the security and stability of the Western Balkans – the Brussels Agreement between Serbia and Kosovo, helped enormously by their wish to join the EU, is a powerful example.

But as the UK’s referendum showed, Turkish membership of the EU is toxic with too many voters in too many countries. In reality, we know it’s not really going to happen – too many governments oppose it and Turkey is rushing headlong away from being in any way eligible to join. But while you can usually get away with meaningless promises in foreign policy, in domestic politics they frighten voters and leach public consent. Turkish accession is dead: the EU should, when it can find a geopolitically acceptable moment, tell its peoples so.

Fireproofing Europe

The first step to making the best of things is to recognise how bad they are. Britain will lose much more than the rest of Europe from its decision, but this is a body blow to the EU nonetheless. This is not good news, or insignificant. Britain’s decision has badly damaged the network of institutions on which Europe relies. It has also delivered a deadly warning, which the EU can heed – or not.

The EU should neither indulge nor punish the UK. Britain needs to accept that Brexit has consequences, choose its tradeoffs and then live with its decisions. But though it’s clear who needs whom more, the EU nonetheless has no interest in a disorderly break-up, or any more acrimony than can be helped. So while refusing to spare the UK the consequences of its choice through some sort of sweetheart deal, it should stand ready to put the EEA or a deep free trade deal on the table. And it should see the UK as a major partner for the future in the affairs of Europe as a whole.

More important is how the EU conducts itself to try and prevent future Brexits. It would be a serious mistake to respond to the crisis by pushing integration further and faster: the democratic elastic binding Europe and its nations is stretching dangerously thin as matters stand. Better to consolidate, to show what Europe can do for its peoples with the powers it already has and to address their fears.

23 June was a dark day for Britain and for Europe. Nothing will change that. It is already a (self-inflicted) tragedy for Britain’s future, role in the world and reputation. Europeans, including British Europeans, can only hope the EU does not let it become the first act in a tragedy engulfing the whole Union.

You may also be interested in my blog from June on how the UK should approach Brexit, following the referendum.

This piece was subsequently amended to highlight the fact that the EU customs union is the key challenge relating to the Irish Border.

Brexit as if the 48% mattered

‘Brexit means Brexit, and we’re going to make a success of it’ means virtually nothing. But the mood music is getting clearer now: and it sounds grim for pro-Europeans and moderate Leavers.

Robert Peston cites reliable sources saying the Government wants a ‘Canada-plus’ deal. Canada’s Comprehensive Economic and Trade Agreement (CETA) is a so-called deep and comprehensive free trade agreement, which scraps almost all tariffs and tackles a large number of non-tariff barriers. The UK would, however, seek an agreement which extended much further into services as well as goods. (CETA theoretically covers services, but there are hundreds of exceptions – and crucially for Britain, it has no financial services passport.) This is to secure an end to free movement, an end to implementing EU law and an end to compulsory payments to the EU budget.

Even if secured, ‘Canada-plus’ means hard Brexit. Britain would leave the single market – which delivers freer trade than any other arrangement anywhere in the world. As the Treasury and others warned, leaving the single market means much greater economic damage. Canada would want a much deeper relationship than CETA for a market as important to them as the EU is to us. And of course, we still have no idea what other forms of co-operation the Government wants to keep.

Peston’s sources only claim a 75% chance of getting this deal. He rightly describes this as a ‘wholly spurious probability’. Only one relationship with the EU offers membership of the single market in services: the European Economic Area (EEA). Switzerland – the next closest partner – has de facto membership for goods, but not services. CETA is much less complete than the Swiss bilateral agreements. And if you think France will allow our financial services to operate freely in the EU while we leave the single market, I have a bridge to sell you. CETA took five years to negotiate (2009-2014) and still isn’t in force. Depending on a court case, every individual EU member may need to ratify the deal. And how does an Investment Tribunal improve on a proper European Court of Justice?

I’m frightened that, while this happens, Remain voters and politicians are focusing on trying to block Brexit via the Lords, launching court cases over triggering Article 50 and so on. While we all talk about whether we can reverse Brexit on the sidelines, in the here and now we’re taking our eyes off the ball and ignoring the real fight. Whatever you think about a second referendum, we have a Government committed to enacting Brexit in power until (by default) 2020. Its manifesto promised to enact the outcome of the referendum. In this Parliament, MPs won’t try to reverse the choice of 52% of voters on a 72% turnout without a clear electoral mandate to do so.

While we have that argument, Brexit is being defined by a Conservative Prime Minister under pressure from the Tory Right. The Leave vote must be honoured unless opinion changes, the public want to revisit the issue and they then vote for a volte-face. But Britain is a liberal democracy, not a pure majoritarian state, and the 48%’s concerns deserve a hearing. There is no democratic or moral reason to define Brexit in its most hard-line advocates’ terms. Further, the polling suggests most people prioritise the single market over ending free movement. This includes an overwhelming majority of Remainers and a significant share of Leavers.

Joining the EEA, like Norway, Iceland and Liechtenstein, would be far less damaging than a Canada-style deal. Fisheries and agriculture aside, the UK would stay in the single market. We would keep the services passport, so financial services could still operate. Customs barriers would be imposed, but the UK could thus negotiate its own trade deals. There are some limited differences on free movement. The EEA already exists: following an ‘off-the-shelf’ single market model reduces the risk of ending up in limbo after Brexit.

There are hurdles: first, Britain would need to join the European Free Trade Association (EFTA). It is not guaranteed that the UK would be allowed to join EFTA or the EEA. But a constructive UK Government could give EFTA more heft in striking trade deals. It could also (potentially) increase EFTA EEA members’ leverage vis-à-vis the EU. Britain would need to assure partners it would not destabilise the EEA, and it could fairly point to its good record in transposing directives. But there is a potential deal here. EEA membership, staying in the Emissions Trading Scheme and European Arrest Warrant and working together on foreign and security policy, could add up to a ‘pro-European Brexit’.

The Conservatives only have a majority of 12 in Parliament. Most Tory MPs, at least in public, favoured a Remain vote. Many Leave voters and MPs supported a ‘liberal’ Brexit. We could therefore build a majority in the Commons and the country for a much less damaging approach than the Government’s. A majority in the Lords would probably resist a hard Brexit, if offered an alternative.

The Scottish and Welsh Governments, most Northern Irish parties and the London Mayor backed Remain. Scotland, Northern Ireland and London’s voters did, too. It is currently disputed whether the devolved legislatures should pass legislative consent motions for enacting Brexit. If Westminster insists on a hard Brexit, I cannot see why they should have to vote for them. And if Theresa May doesn’t want to alienate Scots further, she should be willing to meet them halfway.

Labour MPs need to lead the fight in Parliament – working with Tory Remainers, the Lib Dems, the SNP and others. A competent leader who supports the European cause would help enormously. Failing that, MPs and peers must co-operate anyway, in the national and continental interest.

Pro-Europeans must be realistic. For, our battle is now to control the shape of Brexit – to minimise the damage and to stop leaving the EU from meaning leaving Europe altogether. So far, we’re neither fighting hard enough nor focusing our efforts. That has to change. If it doesn’t, leaving the EU will be wholly defined by our opponents.