Grasping Reality on TypePad, by Brad DeLong

...Whitehall has a clear ethos: it works for the government of the day, whoever that is. It does work ministers want, and ministers did not want to prepare for a Leave vote. “The instruction was clear,” one official said. “Don’t do any preparation.” It was a political decision, but one that Sir Jeremy Heywood, the cabinet secretary and head of the civil service, supported. As another senior official put it: “Our contingency for losing was not losing.” Heywood later told a committee of MPs: “We did, of course… in that last 28 days, look at what was being said by people advocating Leave and try to understand what were the issues that were likely to immediately arise on 24 June in that case.” He said some serious and valuable thinking had been done, but admitted: “I do not call that contingency planning, because it was not a plan.” He had set up a “referendum unit” but its role was to steamroller through a campaign win.

There was some internal dissent: at a 2016 away-day in Brussels, Sir Nicholas Macpherson, then permanent secretary at the Treasury, proposed officials should work on contingencies. He was supported by Sir Ivan Rogers, then the so-called Permanent Representative to the EU, Britain’s top official in Brussels. The request was rejected: one person at the meeting said Heywood batted the proposal away. He was “obsessed with getting the Department for Transport to show that you had to vote Remain otherwise you won’t be able to fly”. When the referendum resulted in a Leave vote, the political establishment lost its bearings. Chaos was not too strong a word, and it deepened as senior Conservatives fought for the party leadership.

Michael Gove and Boris Johnson helped to turn the leadership election into a circular firing squad Only three weeks after the referendum and a Conservative leadership contest that quickly turned into a circular firing squad, Theresa May took her place in Downing Street–with very little understanding of Europe. The Leave victory, by 52 per cent to 48, promised to change Britain’s understanding of itself.

It promised almost as big a challenge for Ireland, but unlike Britain, Ireland had prepared. Before the Brexit referendum in 2016, the Irish Department of Foreign Affairs and the Department of the Taoiseach had been working on Brexit strategies for two years. Two British officials working on European policy in 2015 and early 2016 told me similar stories of being cornered at European events by Irish officials who wanted answers about what would happen in the event of a Leave vote.

British civil servants could see that preparation for Leave–banned in London–was happening in Dublin. Their Irish counterparts could produce documents and briefings immediately after the vote Micheál Martin, leader of Fianna Fáil, Ireland’s second-largest party, said there was a clear view on the morning of the result: “There was an overarching sense of ‘This is bad news’. This fundamentally alters our relationship that has been ongoing now for 50 years. And it fundamentally undermines the economic model that we have been working under that five decades.” More than that, Brexit might affect the peace process–the delicate negotiation between the communities of Northern Ireland in which the British and Irish states have long been immersed.

A central failure of the UK state before the 2016 referendum had been to assume that the vote would inevitably be won by Remain. Martin, a former foreign minister, said that when meeting British politicians before 2016, they seemed very unworried: “I was struck at the naivety with which Britain entered the referendum itself…” Macpherson, now Lord Macpherson, told me: “Britain tends to think everything will work out okay.” Ireland, though, is “a serious country that has just been through a [financial] crisis. They plan for the worst. They know things don’t always turn out for the best.”

For the UK, leaving the EU would raise a large number of connected problems, which joining its predecessor organisation, back in 1973, had been intended to solve. When Harold Macmillan, the patrician Tory prime minister, first applied to join the European Communities in 1961 the old Britain was dying. The Suez fiasco of 1956, when Britain failed in its attempt, with Israel and France, to wrest back control of the canal after Egypt nationalised it, confirmed its relegation from superpower to regional player. Selwyn Lloyd, the Foreign Secretary, wrote to Macmillan in late 1959: “We ceased to be on an equal basis with the United States and USSR when we gave up the Indian Empire [in 1947]. We have been in retreat since. We have or have had a number of albatrosses about us…”

In 1960, Macmillan spoke in Johannesburg: “The wind of change is blowing through this continent, and whether we like it or not, this growth of national consciousness is a political fact. We must all accept it as a fact, and our national policies must take account of it.” The message heard in New Zealand and Australia, as well as by the white populations of Rhodesia, South Africa and Kenya, that the UK would no longer promote the old hierarchies of imperial power. By the 1970s Britain’s place in the world was changing, and its military forces had been withdrawn from east of Aden. Its key strategic outlets were the British Army in Germany, its submarines in the Atlantic and the defence of the UK itself.

British troops withdraw from Yemen in 1967. By the 1970s, Britain's place in the world had changed Dean Acheson, the former US secretary of state famously quipped in 1962 that “Great Britain has lost an empire and not found a role”. It is worth noting the sentences that followed: “The attempt to play a separate power role–that is, a role apart from Europe, a role based on a ‘special relationship’ with the United States, a role based on being the head of a ‘Commonwealth’ which has no political structure, or unity, or strength and enjoys a fragile and precarious economic relationship…–that role is about played out.”

The truth is that Britain had become a European power, not a global one. But even on its own continent it was struggling to impose itself. Privately Macmillan mulled Britain’s options as he saw them. He was coming to believe that there was no choice but to sign up to a new body–the European Communities of six European nations, forged a few years before. This Common Market comprised Germany, France, Italy, the Netherlands, Belgium and Luxembourg. In 1960 he wrote in his diary: “Shall we be caught between a hostile (or at least less and less friendly) America and a boastful, powerful ‘Empire of Charlemagne’ – now under French but later bound to come under German control. Is this the real reason for ‘joining the Common Market’ (if we are acceptable)…”

Britain had sought to build an alternative to joining “the Six”–a rival body, the European Free Trade Association (Efta), which came into being in 1960. Efta involved less integration and Britain was more comfortable with that. But its members were mostly minnows. It was clear from the start that the new European Communities would be the dominant power on the continent. It was also clear that Britain needed access to European markets. In the 1950s, Britain was stagnating. The economic miracles of mainland Europe were not being replicated at home. Not being in the EC actually created an extra economic problem. The Treaty of Rome reduced barriers among its members, but also raised tariffs against the UK.

There were problems with joining the EC. Britain’s way of subsidising farms would need reform and if Britain adopted the EC’s pan-European trade policy, it would mean treating old Commonwealth countries such as New Zealand like anyone else in the world. But if Britain’s future lay within the European continent, it made sense to be part of the dominant geopolitical and economic structure–not Efta, the weak rival. So, after years of prevaricating, Britain applied to become the Seventh of the Six. Yes, it meant looser ties with the Commonwealth. So be it.

The decision to leave the EU echoed some of these arguments of the 1960s and 1970s. Some Brexiters wanted to reconnect Britain to the Commonwealth. For others, sovereignty was the main reason for departing. Hugh Gaitskell, the Labour leader, had argued when Britain was applying: “It does mean, if this is the idea, the end of Britain as an independent European state. I make no apology for repeating it. It means the end of a thousand years of history.” There were echoes of that in 2016. When Britain voted to leave a bigger issue – immigration – coursed through the debate. The EU is built around the “four freedoms” of its so-called single market: free movement of capital, of goods, of services and of people. Political integration, above all, means the right to live and work anywhere in the union.

When eight central European nations joined the EU in 2004, this became a political challenge in the UK: the median income of a household in Poland in 2009 was €5,090, compared with €16,266 in the UK. Unlike other older EU states, the UK imposed no “transitional controls” on inward EU migration–so it saw a significant population shift. Combined with wage restraint and austerity, an anti-immigration message did well. The Vote Leave referendum leaflets stated (wrongly) that Turkey was about to join the EU. They obliquely hinted that Iraq and Syria might follow. The anti-immigrant message was drummed home. As Dominic Cummings, Vote Leave’s campaign director put it: “Every week is Turkey week.” The morning after the vote in June 2016, the UK had the same strategic problems as Macmillan faced. If anything, they were more acute. The UK is surrounded by the EU. EU members lie to its west and north, and the union spreads out to Russia in the east.

The economic case was starker, too. The so-called “gravity” theory means countries tend to trade more with bigger economies, but also with people nearer to them. To some extent, this is obvious–you cannot easily ship, for example, live animals thousands of miles, so people buy those nearby. But even today, as the internet and containerisation of goods have made trade in non-perishables easier than ever, the world economy has a stubborn bias to buying local. That is why economists in government–notably the Treasury and Business department–have long fixated on reducing the cost of doing business in Europe, in particular. If you are certain Europe will always be a key market, chipping away at costs of cross-border transactions in the EU is a coherent strategy.

That is why the development of the EU has been in the direction of harmonisation: in addition to getting rid of customs barriers to trade between its members, the union has adopted common regulation so that companies know goods made for the British market can be sold freely in France. This has eroded the need for regulatory checks on products moving between member states. This is how Britain has won foreign investment. Companies based in the UK could access the whole European single market in goods, while benefiting from loose British labour laws. Furthermore, since companies know that goods will face neither tariffs, regulatory hurdles nor delays at national borders, they have built enormously complex webs of suppliers spanning member states. Car-makers can build engines in one country, the bodies in another and assemble the final product yet somewhere else.

The EU’s integration and harmonisation has also been good for Britain’s real current specialism–services. Data on services exports is poor quality, but they make up much of the UK economy. The single market in services is uneven, to the point that a lot of British eurosceptics question its existence. But there are places where it clearly does–and where the UK is enormously reliant on it: banks, for example, based in London need not set up wholly separately capitalised stand-alone institutions in other EU states. They can “passport” their services in. According to a report produced in 2019 by Northern Irish civil servants, the value of EU membership is particularly high in a number of services sectors. Their estimate is that leaving the single market and returning to life as a non-member–a so-called third country–will be hard. With no special arrangements, the effect will be equivalent to heavy tariffs on services trade.

The truth is, though, that the EU was not just a vehicle for the UK’s strategic and economic interests. It was a convenient vehicle for continental co-operation. The EU, which has a commitment to “ever closer union” as its core value, cheerfully took on ever more work. The UK’s secret negotiating plan prepared for the first round of full talks on Brexit showed the sprawling manner in which the EU had become the vehicle for a range of tasks. One strand was devoted to OSIs (pronounced “oh-zees”), other separation issues.

These included:

• the fate of the British territory in Cyprus;
• the future of EU agencies based in the UK;
• the legal status of UK and EU goods placed in each other’s markets before Brexit that remain unsold after Brexit;
• how you stop courts in the UK and EU taking on the same cases, how you deal with pending court cases, how you deal with legal privileges;
• how you deal with fissile material movement;
• what to do with EU assets in the UK.

There were also questions on Gibraltar, the Channel Islands, the Isle of Man and–of all things–the Caribbean island of Anguilla, which relies on Dutch and French territories as its link to the wider world.

All these questions had to be answered and Britain had yet to work out how it would manage its relationship with Ireland.

Westminster brims with people who can tell you the minutiae of American congressional special election races. But you would be lucky to find members of the British political elite who could pick Éamon de Valera out of a line-up, name the major Irish parties or know what a TD is. British politicians get the name of the country wrong as a matter of course.

This lack of interest is not symmetrical. Ronan Fanning, the late Irish historian, wrote in 1984: “The great divide in Irish politics had always been between those who supported and those who opposed the British connection.” The littler state has always had to pay more attention to its bigger neighbour. So it was in 2016. At a meeting of Irish party leaders in Dublin the day after the referendum, a consensus emerged quickly. Micheál Martin said they knew this was “about [all] the people on the island, and we can’t play politics with it”. The next week, in the Dáil, he said: “We all need to be wearing the same jersey.”

The strength of this consensus should have been spotted in London, but London wasn’t watching. In 1991 the Republic marked the 75th anniversary of the Easter Rising, a bloody revolt that led to Irish independence. At the time there was fear about doing too much. Was it possible to mark the revolutionary acts of the founders of Ireland without seeming to support the brutal murderers of the Provisional ira? That year republican terrorists killed 50 people.

But by 2016, at the centenary, there had been a transformation. Ireland felt able to separate 1916 from the Troubles. The violence was in the past. The critical date to explain the difference is 1998, the year of the so-called Good Friday Agreement. For most Britons, this was something that happened abroad. For Ireland, it provided answers to the British Question.

The agreement created a power-sharing politics in Northern Ireland. It also acknowledged there were two Irish political traditions: broadly, the Catholic and Protestant populations on the island. The Irish amended their constitution, dropping a claim on the northern counties in favour of softer language: “It is the firm will of the Irish nation, in harmony and friendship, to unite all the people who share the territory of the island of Ireland, in all the diversity of their identities and traditions, recognising that a united Ireland shall be brought about only by peaceful means with the consent of a majority of the people, democratically expressed, in both jurisdictions in the island.” As per its legal requirements, this was passed in a referendum, overwhelmingly by 94 per cent to 6. Ireland acknowledged the legitimacy of Northern Ireland and, at the same time, set out a path to unity.

Europe provided the scaffolding for this moment. Irish nationalists on both sides of the border could live in a world where Ireland was divided, but felt more like a single place. This is where the EU came in. It was not “in the room” when peace was concluded, but it built the foundations by removing the need for a border. Most border checks melted away because the UK and Ireland were both members of the EU. It is hard to believe that Ireland could have got to a place where a borderless island was possible without coming from a process run by Europe. Martin says: “Europe almost silently facilitated convergence on the island around standards, regulatory frameworks, compliance… So the UK signed up to a EU directive, so did Ireland. And that EU directive is now in the north and south of Ireland.”

By the end of the 1940s there was no question of Ireland’s sovereignty – the UK and Ireland had been through a trade war, Ireland had stayed out of the second world war, the British monarch no longer had a role in Ireland, there was no governor-general, there were no oaths of allegiance. But there is more to the Irish attachment to Europe than the peace. To British people, the EU has felt like an encumbrance. It joined Europe during relative decline; no sooner had the sun set on the empire than Britain was seeking entry to the European club. By contrast, the Irish experience has been one of liberation. It is not just that Ireland got new roads built out of EU funds, as is commonly joked in Britain. It is that Ireland had been stuck in economic stagnation before it joined, too close to a struggling Britain.

Its subsequent growth was astonishing. But that is not all: there is dignity for Ireland in Europe. The EU is an enormous amplifier of the voice of little countries. There are quid pro quos, of course. Ireland is expected not to throw its vetoes around too much. But a country that worried about its position on the outer edges of Europe was now embedded in its heart. Facing Brexit, the Irish state had prepared which gave it a headstart–but Ireland’s far greater advantage is that there was a solid political consensus.

There was, rapidly, a clear, single view. It boiled down to this:

• Ireland has come up with solutions about how to deal with the border with and the future status of Northern Ireland. It would not let them be harmed.
• Ireland is an EU member state. Membership is non-negotiable. There are no scenarios where Ireland chooses Britain over Europe.

Martin said: “There is common ground on the Good Friday Agreement, there always had been–and in terms of the broader trading relationship and the need to have a soft Brexit and in the end of the realisation about what Brexit will do to Ireland.” There was such a clear consensus that Irish citizens appearing on media in other countries could ring up Irish embassies for briefings. When I told one senior official at the British Foreign Office about this, they were astonished. “But that’s cheating.” Brexit crashed into the long arc of Irish history, and far too few in Britain saw it coming...

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