03 December 2020

LSE: A peculiar definition of sovereignty is the root cause of a failed Brexit

As we enter the last weeks of negotiation between Britain and the EU, things are not looking good. All the possible outcomes look both painful and expensive for the UK. How did we get here? At the root of the problem is the British government’s definition of sovereignty...

A peculiar notion of sovereignty underpins the three main reasons why the government will fail to get a good outcome. Firstly, very few British ministers, or Tory MPs, seem to have much understanding of how the EU works or negotiates. After 40 years inside the belly of the beast, this is surprising; but it seems to be a point of principle not to understand, nor to take advice from those who do.

Secondly, the government has sidelined Britain’s economic interests, except fishing, in the interests of what they declare to be ‘sovereignty’, a matter seen as quite distinct from the national interest as a whole. 

Thirdly, their definition of “sovereignty” has made failure inevitable.  It is a definition closer to that used by North Korea than to that of any other free-trading western nation.  Real sovereignty is about protecting a country’s interests, not simply its borders and laws, and by that measure every form of Brexit now on offer reduces Britain’s sovereignty, and a ‘no deal’ Brexit damages it most.

The second point has been adequately analysed by others. This government has never accepted the economic, and business, reality that a domestic market of 60 million is too small to build world-beating businesses, whereas a domestic market of 500 million makes such businesses possible. Business interests, in particular, have been relegated firmly to the bottom of the heap by British negotiators – much to the surprise of the EU side and, indeed, of British business itself. Yet their protests have been muted, perhaps because they will need every penny of Treasury support they can get to weather the storm to come. I will therefore focus on the first two.

Negotiating with the EU

It is only right to recognise the extraordinary efforts of all those who have been involved with negotiating the 600 pages of detailed texts on Britain’s departure. The number of issues that needed to be settled has been massive, and the scale of work to achieve this by the deadline has been enormous. Credit where it is due, even if it has been unrecognised by a media and Parliament focussed solely on the areas of disagreement.

Of course, to have set a hard 31 December deadline, and then hold back from negotiating many of the details until so late in the day has made the task all the harder. Besides the Prime Minister’s nature to make no decisions until they become unavoidable, both he and Conservative MPs held unfailingly to a belief that the EU only makes concessions, only cuts deals, at the very last minute, so it is essential to hang tough on all key issues until the end. 

This was a fundamental mistake, misunderstanding both the EU’s purpose and its methods. The EU is a cumbersome beast, and though on trade the Commission has sole competence, and therefore some freedom to negotiate, it still needs to be able to sell the outcome to member states, many of whom have serious political interests at stake. Any trade deal has, therefore, to be done through the painstaking building up of components over time, finding agreements in the context of an overall balanced package on which there is a consensus between the negotiators so that it can be sold to both the member states and the European Parliament on the EU side and domestic constituents in the UK. There will always be difficult areas of disagreement, but these cannot all be settled nor a deal cut purely at the last minute; it is a process of building consensus, not combat to the death. Cameron made the same mistake when he tried to bounce the European Council on a text in 2011 and failed dismally.

In particular, the Internal Market Bill has been a spectacular own goal. To renege on the Withdrawal Agreement and propose to break international law undermined the one thing that might have softened the EU negotiating position – trust. In undermining it, the PM has made it far more difficult for his negotiators to get concessions, and not just on the enforcement mechanism. The EU exists as a community of law, something the UK always defended vigorously in the past, so to play fast and loose with it on departure is taken as an intention of bad faith.

But this has just reinforced a more fundamental problem: that the UK set its red lines in a place that breached the two fundamental things on which the EU would not, and could not, budge – the integrity of the single market and the preservation of the Good Friday Agreement. The Brexiteers did this on the grounds that ‘sovereignty‘ demanded it, as explained in David Frost’s lecture in Brussels last February.  In reality, sovereignty does no such thing. This is pure politics.

What is sovereignty?

The Brexiteers’ definition of sovereignty has always been the core of the problem. It is the greatest failure of the Remain campaign that they scarcely engaged, let alone won, this battle. It left them unable to expose the reality that Brexit meant throwing away control, not taking it back.

Trading across borders means regulating across borders, and the more you want to trade, the more regulation you need. This goes for services and data as much as for goods. ‘Sovereignty’ in this context means having control not only of regulation in your domestic market but in the markets you sell to and buy from. In the 1960s, Britain vividly experienced the drawbacks of having no control over the European market and too small a domestic market for its manufacturers. EFTA did not provide what was needed, so only membership of the EEC would enable Britain to defend its national economic interests effectively. It was less a case of giving sovereignty away than, by sharing it, extending our sovereignty to mainland Europe. 

It is thinner sovereignty, less absolute than the North Korean variety, but more effective in protecting British interests because it gives us a far greater influence over the shape of regulation in our main market, as well as on the position of Europe in international affairs – an issue that matters more and more.  It provided a de facto veto on both.  That is, you won’t always get your own way, but you can prevent your neighbours from going the wrong way.

Ultimately, real sovereignty means having a seat at the table, a voice in the debate and a vote on the outcome. We have thrown all that away. We are left with paper sovereignty that sounds good but has no effect. We become a rule-taker from countries and Unions bigger than us, rather than a rule-maker.

Does that matter? Brexiteers argue that foreigners will have to listen to Britain anyway, and the costs membership imposed on Britain – to our budget in cash terms, and more particularly through the requirement for free movement – exceeded the benefits. But the cash calculation excluded the costs of separation, which are permanent, not one-off; and the reality is that to grow, Britain needs a regular supply of immigrants, and if they don’t come from Europe, they will come from elsewhere.  As for listening, our partners will always do that, but in business and trade size matters and the bigger you are, the more they listen and better the deal you get.

Brexiteers would also argue that their assertion of sovereignty does reflect national interests. But this exposes the problem that their understanding of British national interest is identical to their party political interest. The fact that Scotland and Northern Ireland both needed membership of the EU to make the United Kingdom work for them was excluded from this calculation. The Brexiteers definition of sovereignty will therefore come back to bite them when – as we have already seen – they argue that Scotland’s interests dictate that it should stay in the British Union. The party political interest of the SNP dictates otherwise and therefore – using the Brexiteers own argument – they will declare that Scottish sovereignty demands separation from an English nation that gives them no say in fundamental decisions. The Brexiteers will be hung with their own petard.

The mantra of ‘taking back control over our borders, our trade and our money’ is therefore not only wrong but leading the UK into a blind alley of its own making. It will be no surprise when some members of the Union decide to cut and run back to the main road. Sooner or later, England will have to follow, dragging its precious sovereignty behind it.

This article gives the views of the author, and not the position of LSE Brexit, nor of the London School of Economics. A shorter version of this blog has appeared on the UK in a Changing Europe.

© LSE