Dr Patrick Diamond argues that the Brexit vote has not laid to rest Conservative divisions on Europe.
5 October 2016
The Conservative party has been in turmoil over Europe since the late 1980s.
Divisions erupted back then over how Britain, led by the Thatcher governments, should respond to the quickening pace of European political integration.
A new political generation of hard-line eurosceptics emerged within the Tory party.
Leaders, from John Major to David Cameron, have been struggling to contain this group ever since.
William Hague and Iain Duncan Smith embraced a virulent strain of anti-Europeanism, but their obsession with the EU didn’t resonate with British voters back then. The Conservatives remained electorally marginalised.
In 2006, Cameron urged his party to stop “banging on about Europe” in order to develop a fresh, modernising appeal.
This strategy was initially successful in taking the Conservatives back towards the centre ground.
But even Cameron was unable to stem the eurosceptic tide.
Too many people in his party feared being eclipsed by the emerging UK Independence Party (UKIP). That was ultimately why Cameron agreed to hold a referendum on the UK’s EU membership (having staved off an initial attempt by his backbenchers to hold a vote in 2011).
His decision came against the advice of many senior Conservative politicians.
Even now the referendum has been held, the political divisions in the Conservative party have not been assuaged. The debate at the Tory conference in Birmingham has made that clear.
The party remains divided into three distinctive Brexit camps. Followers of Liam Fox and David Davis favour a “hard Brexit”, while some former ministers, such as Anna Soubry and Nicky Morgan urge a “soft Brexit” that they hope will see the UK working closely with EU partners.
A group of ministers in the middle led by Chancellor Phillip Hammond accepts that “Brexit means Brexit”, but would like the UK to retain access to the single market at a minimum.
The Conservative party membership is heavily in favour of a “hard Brexit”. But as former education secretary Nicky Morgan pointed out in a speech on the fringe in Birmingham, handling Brexit badly would weaken the Tories’ reputation for economic competence. It could potentially weaken their appeal to swing voters in marginal seats.
Nor has the referendum resolved the question of what kind of European future the UK should seek. This despite the new prime minister’s declaration that she intends to activate Article 50 by the end of March 2017.
The “Norway-plus” option is the most attractive for the political and financial elite (and indeed to many voters) who still have considerable influence over policy in the Tory party.
But unfettered single market access requires acceptance of free movement, budgetary contributions, and EU regulations without an ability to influence the rules of the game at European level. This option looks increasingly implausible to British and EU diplomats.
On the other hand, shifting towards a unilateralist trade policy would inflict an enormous structural shock on the British economy. That would divide the Conservative Party from its electoral base in corporate business and the City of London.
Years of uncertainty created by protracted and complex trade negotiations would threaten inward investment (the UK is more dependent on foreign investment than any other advanced economy). Key investment decision would have to be postponed or cancelled – as car manufacturer Nissan has signalled.
The failure to secure “passporting” rights for the UK’s financial services sector to trade in Euro-denominated activities would imperil London’s position as one of the world’s leading financial centres.
For this to occur under a Conservative government’s watch would be an extraordinary development, given the importance that Tory leaders have accorded historically to sustaining the support of financial interests.
Anything left to govern?
Then comes the issue of the threat Brexit poses to the British state.
Conservative politicians will have to make choices about the UK’s economic future within an increasingly dysfunctional and crisis-prone political system.
The territorial politics of Scottish independence, turmoil in Northern Ireland, and fragmentation in England (witness the attempt by London to secure greater autonomy over taxes and spending) threaten to break Great Britain apart.
A referendum is any case inimical to how Conservatives in Britain have traditionally thought about constitutional politics.
After the 1975 referendum, the then Conservative leader, Margaret Thatcher, argued that parliament had the right to ignore the referendum result. Constitutional authority flowed from the doctrine of parliamentary sovereignty, she said, not the direct will of the people.
Yet here are MPs implementing a referendum decision with which two-thirds of them fundamentally disagree, and believe will have negative repercussions for their constituents.
The referendum imposes a new divide in British politics between plebiscitary and parliamentary democracy.
The stakes for the Conservative party are high indeed. Negotiating a “successful” Brexit is a major challenge for Tory party statecraft.
They have to identify a plausible model for a British future outside the EU which recognises the will of voters expressed in the referendum result.
They have to do that without sacrificing the Conservative party’s traditional credentials of economic stewardship.
Meanwhile, May has to hold together a party which Europe has threatened to destroy more than once over the last three decades.
The June referendum was intended to clarify the UK’s relationship with Europe for at least a generation. The risk is that it simply provokes an almost never ending round of political turmoil and schism.