The Real Case for Brexit

by George Hatjoullis

The Leave campaign has settled on immigration as the central case for Brexit. This is hardly surprising as it has a glib appeal and speaks to the xenophobia of many (not just British) people. The single market requires free movement of people so in principle millions of people could come to live and work in the UK. The only way to stop this is to leave. Simples! In fact, not so simple.

First, leaving need not stop migration. Most is still non-EU and, judging by Norway and Switzerland, continuing free trade with the EU might require a fair amount of free movement still. Second, free movement does not necessarily constitute net migration. The idea is people move freely to where there are jobs and there is no economic law that says this will always be in the UK. Finally, on new entrants to the EU, every country has a veto. Turkey may never want to join (under Erdogan) but if it does the UK can veto (assuming Cyprus or Austria do not). Given this, immigration does not provide the compelling case for Brexit. It may be in 10 years time the UK hits bad economic times and British workers want to go abroad to work (Auf Wiedersehen Pet). It will be easier in a single market.

The true case for Brexit is the ultimate destination for the EU; it is  political union. First all countries must join the eurozone and then a federal political structure will be put in place. Cameron claims to have negotiated an opt out to ever closer union. There cannot be a permanent opt out for ever closer union. The Cameron deal allows the UK to defer the fateful day but sooner or later the UK will need to join in or leave because logic demands it. The clue is in the negotiation terms.

Cameron made some progress in protecting the UK from changes to the EU driven by the needs of the eurozone. However, as more countries join the eurozone and the need for new mechanisms of governance become unavoidable, potentially incompatible needs will emerge. In the limit, the UK may find itself in a single market consisting of itself and a large federal eurozone. In effect, the EU will become a two-member entity. It is difficult to imagine this large and powerful bloc allowing the UK any say over its requirements and policies. The relationship, in the limit, between the UK and the federal EU will, at best, resemble that between Norway and the EU as it is now.

Given this limit scenario, the real case for Brexit is made. Sooner or later the UK will either end up in a Brexit situation unless it chooses ever closer union. It is just a matter of when. I would surmise the Remain supporters are hoping time will make ever closer union more acceptable (or do not recognise this is where it will lead). I am less clear why the Leave camp have not made more of this limit scenario. It may be because it is too subtle and they feel something as primal as xenophobia is a far better angle. Nevertheless, the idea that the UK can permanently exist in the EU on the terms it enjoys (yes enjoys!) now is the real fiction being promoted.