Progress | Centre-left Labour politics

A sense of entitlement

The Brexiteers’ indulgence of ‘British exceptionalism’ exposes the false truth of leaving the European Union, argues Roger Liddle

The best book I read over Christmas was David Cannadine’s masterly Victorious Century. A central theme of this history of the United Kingdom from 1800 to 1906 is the myth and reality of ‘British exceptionalism’. As Cannadine notes, ‘the United Kingdom was not only remarkably stable in terms of its unwritten constitution and its institutions of government, but also in geographical terms, avoiding armed invasion, enemy occupation and the forced loss of lands, which were often the fate of continental countries’. Despite Britain’s entanglement in two murderous world wars in the century that followed, the perception of British exceptionalism was strengthened by the world changing events of 1940 when Britain stood alone against Nazism: this exceptionalist interpretation of British history is currently being reinforced for a whole new generation by the success of such brilliant films as Dunkirk and Darkest Hour.

I share this sense of pride in Britain’s exceptional history. But the myths of British exceptionalism now far exceed the realities. The empire has long gone and it was always a racist disgrace and an economic drain. Britain is still a considerable military power, but the tensions between limited budgets and essential military capabilities are being stretched to breaking point: aircraft carriers without planes to fly off them, the smallest army for more than a century, a modernised submarine deterrent with inadequate naval and air protection. The only future is in closer European defence cooperation, which may still happen, especially with the French, despite the Brexit mindset that stands unhelpfully in the way. We are still permanent members of the United Nations security council, but for how long will the legacy of history enable Britain to pull rank over India, Indonesia, Brazil and South Africa? Post Brexit, France will stake its claim to be the only European Union member state with UN permanent representation. We should be proud of Britain’s generous aid and development budget, but our political influence now almost wholly depends, especially with Donald Trump in Washington (but it was in decline in any event under Barack Obama), on effective working relations with our EU partners when it comes to Russia, Iran, Ukraine, the Middle East, Syria and Turkey, the refugee crisis in north Africa and the Mediterranean.

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The same gap in perception between myth and reality applies in economics and trade. In place of the vast overseas assets which the Victorians built up and were sold off to finance two world wars, we are today a nation with a permanent overseas payments deficit dependent, as governor of the Bank of England Mark Carney puts it, on ‘the kindness of strangers’. In practice this means our ability to pay our way in the world by selling domestic assets to foreigners (whether posh London flats, infrastructure investments like new nuclear power stations or home grown enterprises seeking a buy out). We see ourselves as a global trading nation: the government claims its national strategy for Brexit is based on a philosophy of ‘global Britain’. While we rightly boast some great strengths, especially in research, the facts are inescapable: over 40 per cent of our trade is with the European single market and a further 30 per cent with nations with which the EU has trade agreements and there is no guarantee that on Brexit we can negotiate equivalent, never mind better, terms with these non-EU trading partners. As for the new global opportunities of which the government boasts, in China and India we are comprehensively outsold by German exporters: it is unclear how their EU membership, in Eurosceptic parlance, ‘holds them back’.

The main difference between our partners and ourselves is that they have fewer illusions. They are conscious of Britain’s reduced position in the world. That is why they have such difficulty in understanding the Brexit vote. It is in defiance, as they see it, of objective reality. For them it is a terrible failure of our political leadership that this disaster has been allowed to happen. Most continentals sincerely regret it: only a few want to see the back of Britain as an ‘awkward partner’. But they are determined – and here the unity has been impressive – that Britain’s decision will not in turn weaken the EU itself, still less strengthen the poison of anti-European populism.

Yet the perception of British exceptionalism still shapes the Eurosceptic mentality with which many Britons, both ‘Remainers’ and ‘Leavers’, approach the special deal that they think the EU should now, as of rights, offer us. Most Leavers make snide remarks about the EU in virtually every sentence. They celebrate Brexit as ‘independence’ from a Brussels dictatorship. The Leavers have no sense of how these words sound to continentals whose recent historical experience has been of real dictatorships and who for the most part see the idea of a united Europe (whatever many gripes they may justifiably have about Brussels and the European commission) as one of the greatest blessings of the last seven decades. The Leavers cannot bring themselves to see that the EU, for all its blemishes, is historically one of the greatest achievements of European civilisation.

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Yet the arrogance of British exceptionalism means we somehow see ourselves as unique, entitled to the ‘deep and special partnership’ which Theresa May robotically demands. The Conservative government appears to have convinced itself that as long as it adheres to European regulatory standards in a particular economic sector where it suits us, for example the motor industry, it should have unimpeded rights of access for goods and services in that sector, but it should have the freedom to opt out of European regulations in any sector it chooses. As a realistic negotiating strategy, this is a joke.

This demand is as hypocritical as it is likely to fail. The major British error is to view membership of the European Union through an economic lens. For most of our present partners, the EU is a political project in which economic integration is the means or the essential glue that binds its members together. The single market establishes a common framework of law that governs trading relationships, famously based on the principle of the ‘four freedoms’ of the treaty of Rome – freedom of movement of goods, services, capital and people. These principles are not dogmatically incorporated in European law. In the light of the present Carillion controversies, Jeremy Corbyn should note that the health sector was specifically excluded from the 2005 Services Directive and there are special rules for ‘services of general economic interest’ (what Brits call ‘public services’).

The single market is a framework of common legal rules: acceptance of European jurisdiction with a leading role for the European court of justice is an essential part of it. How could it be otherwise? Similarly as cross border economic integration imposes more social costs on some countries, regions within countries and sectors than it does on others, the EU budget provides an important mechanism for redistribution through the structural funds, as many regions of the UK fully understand but the Conservatives do not. For that reason contributions to the EU budget are obligatory. This is not the ‘paying for access’ that Boris Johnson so preposterously fumes against: it is balancing the inequalities that market forces generate with a common redistributory mechanism.

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The Leavers bluster that according to their mercantilist calculations, the EU sells more to us than Britain sells to them: therefore, in their logic, the EU is bound to come begging on its knees to grant the ‘free trade’ they seek. Their basic arithmetic does not stretch to an understanding that as the EU 27 is an economic bloc some seven times larger than the UK, the proportionate impact of trade losses for the UK is far more serious than for the EU as a whole (though there are particular exceptions, like Ireland, to that rule – and it is a fact that Belgian, Dutch, French and German exporters have big stakes in UK markets).

The single market is a building block of European integration, not an end in itself. It is not a free trade agreement. If a country is outside it, it becomes a ‘third country’ for which there are two options. The first is a free trade agreement on the Canada model which offers tariff free access on goods, as long as EU regulatory standards are fully complied with, but very little on services (where Britain earns a massive trading surplus). The second is the only special relationship the EU is prepared to contemplate: continued membership of the single market as a member of the European economic area on the Norway model. As French president Emmanuel Macron succinctly put it on his recent visit to London, if Britain accepts the ECJ and pays into the budget as every other member state does, ‘be my guest’. The only exception there might be to this binary choice is some specific deal on financial services where the EU has a powerful interest in both securing unimpeded access to Europe’s financial centre, the City of London, and ensuring that the City remains within the boundaries of EU rules in order to avoid a repeat of the 2008 financial crisis. But even there the British will not be allowed ‘to have their cake and eat it’. The failure of the British political elite (and this includes Corbyn) to understand this basic point explains why the negotiations for British withdrawal are heading rapidly towards crisis and potential breakdown.

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Roger Liddle is a peer and chair of Policy Network

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Photo By Andrew Parsons/ i-Images

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Roger Liddle

is a peer, a former adviser on European affairs to Tony Blair, and chair of Policy Network

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