EU Referendum in London, UK

Cameron’s blunder and the Conservative Party leadership

David Cameron’s decision to promise a referendum on British membership of the EU will be remembered as the greatest blunder ever made by a British prime minister. There was nothing inevitable about it. It was a calculation made when he led a coalition and had little hope of gaining a majority at the election that loomed in 2015. He may somehow have thought that the promise would settle the division on Europe within the Conservative Party, and he may have been spooked by the UK Independence Party. It certainly has not settled the Tories, and UKIP held just one seat when the election came. So the gamble was ill-judged. But in any case, if he seriously thought that leaving the EU would be calamitous for Britain, there is no defence for taking that national risk in an attempt to manage his party or to improve its chances of election.

At a time when Tony Blair is being pilloried for his alleged errors, Cameron faced virtually no criticism after the referendum when he went to the House of Commons or at his meeting with EU ministers.

George Osborne and Michael Gove urged him not to make the referendum promise. But the PM was not to be dissuaded. You might speculate that he did not expect to win a majority in 2015, and therefore did not anticipate having to redeem the pledge.

It was typical of his announcements in office: made for short-term impact with no calculation of the possible consequences. Although I voted to Leave, I am not delusional about the perils ahead. I believe it would have been better not to have a referendum and to have let sleeping dogs lie. Outside the euro and Schengen the UK faced little imminent threat from the baleful ideology of the “ever closer union” project. Still, I do believe that Britain is unhappy in the EU and will be better off outside. Further economic crises in the euro zone may help Remain voters to see that.

Before the referendum, Britain had stability. Against most expectations, we had a majority government guaranteed five years in office, and a clear (if difficult) economic plan. Indeed you could say that Britain had enjoyed stability since Tony Blair’s win in 1997 or even since our exit from the exchange rate mechanism in 1992. Cameron’s deft creation of a coalition government in 2010 had quickly soothed the jitters at a delicate time.

Now, we don’t know what will be our relationship with the EU, we have abandoned Osborne’s clear budget strategy and we do not know what to expect of our new prime minister, Theresa May. The reputations of those who could be key players in restoring confidence (Osborne, Gove or even Boris) have been trashed during the process. There’s a fear that the chaos in the Conservative Party may be so extreme as to make victory possible for Jeremy Corbyn at the next election. It is hardly surprising that the pound has sunk.

We were plunged into this mess by “too clever by half” politicians, who practise the sort of manoeuvres associated with student politics and who have come to office having been special advisers (and not much else). Not surprisingly, Tory MPs produced a short list of two who did not fit that description. The MPs were perhaps trying to move away from politicians who don’t believe in much other than themselves. They yearn for conviction. (In my view that yearning tends to be cyclical. By the end of Margaret Thatcher’s premiership they longed for pragmatism after years of dogma).

The choice of next prime minister was supposed to lie with 150,000 members of the Conservative Party. They are clearly a tiny minority of the electorate. They are also highly unrepresentative, even if only because they are consistently interested in politics, whereas most people are not. They are, on average, much more concerned about the EU than the average voter.

Precedent suggested that they might have voted for the more obscure candidate and the more eurosceptical. Iain Duncan Smith was chosen because the members knew almost nothing about him except that he disliked the EU, whereas Ken Clarke’s enthusiasm for it was all too evident.. David Cameron was less well known than David Davis when he beat him in 2005, and thought to be a sceptic (which he probably was, indeed may well still be!)

So Leadsom stood a real chance. Much of the Conservative Party is tired of leaders who are, or who turn out to be, in favour of EU membership. William Hague, who as leader pleaded with the British people: “Come with me and I will give you back your country”, campaigned vigorously to Remain. Cameron, elected as a sceptic, has now sacrificed his career for the EU. The broad membership will not be pleased that they have been denied their moment of power. However it came about, the MPs effectively took the decision on leader back to themselves.

To many Conservative members it seemed perverse to elect Theresa May (who favoured Remain) following the result of the referendum. She is criticised for a lack of bravery in favouring Remain but only mumbling her support for it. At the Home Office she did not control immigration from outside the EU impressively, although she was plucky in facing up to the police unions.

During the leadership campaign she pledged herself to require companies to appoint employee representatives the board. She is perhaps fortunate that Mrs Leadsom dropped out before that proposal could be tested (to destruction) by journalists. We are perhaps all lucky that the campaign did not last six weeks during which more and more half baked promises might have been made by both candidates!

Mrs May prides herself on getting on with the job in front of her. It is precisely because she apparently intervened so little in the economy or foreign affairs that we have so little idea what to expect, or to be able to judge her competence.

The first test is the naming of the cabinet. As I write, it seems likely that Philip Hammond will be Chancellor and Osborne Foreign Secretary. It would indeed be paradoxical if, following the referendum, the top three jobs are held by Remain supporters, and would not get her off to a good start with her party. I can sympathise with her difficulty. Boris is not up to the top jobs, and she dislikes Gove, who is now widely seen as untrustworthy (although he more than anyone has the intellectual capacity to be Chancellor).

The next thing is to set out an economic policy. In the flurry of post-Brexit news Osborne dumped the government’s key policy of returning the budget to balance by 2020. Sajid Javid (a senior minister) proposed massive deficit financing “for investment”. The new PM and Chancellor need to produce a policy that inspires confidence soon. We also need a quick decision on the airport runway and a statement on the HS2 railway, opposed by many Conservative voters because it passed close to their homes without offering them a station.

The PM will say that she does not intend to call a general election. Indeed, Cameron’s fixed term parliament legislation (another mistake) means that parliament would have to legislate to bring one about. But Mrs May will pay a price in lost public sympathy, as the years go by, for not having her own mandate.

She may face a crisis in Scotland. Cameron may yet be able to add the break-up of the U.K. to his list of achievements. It is obvious that the national decision to Leave gives the Scottish Nationalists a prima facie cause to demand a second referendum on Scottish independence. But whether they push for it remains to be seen. If they lose twice, it’s hard to see how they could call for a third go. The oil price has sunk since the last Scottish referendum. With the instability already caused by Brexit, can the SNP count on Scottish voters to opt for another layer of risk? During a campaign, Spain would be bound to say that it would veto Scotland’s accession to the EU (as part of the national government’s campaign to thwart Catalan separatism) adding to the uncertainty.

What about the process of Brexit? First, we have to get through a tiresome phase where metropolitan losers ask for a second referendum. That will not happen. After what has occurred the new prime minister will not want to stage a re-run. Nor could she survive the rage of Tory MPs. More likely is that the British and European establishments will try for a minimal change solution to the British departure. Too little change would also enrage many Tory MPs. While the leadership contest continues, May will have to convince her party that she would not tolerate such an outcome. What would get the new prime minister safely beyond the minimum? The clear re-establishment of parliamentary sovereignty and some restrictions on free movement into Britain from the EU.

If the price is exclusion from the single market, it’s the price that must be paid. The decline in sterling more than compensates for the imposition of the EU external tariff. We will trade with the EU as others, the USA and Japan for example, do. We will have new opportunities to trade tariff-free outside the EU. The majority of British companies that do not export to the EU will be freed from EU regulations. The EU is likely to be revealed as a Wizard of Oz, puffed up by the size of its institutions, but really not to be feared.

Parliament may be difficult. A majority of MPs favoured Remain and feel little respect for the outcome of our recent democratic exercise. Some are already arguing that if sovereignty was at the heart of the referendum debate, then they should reassert parliamentary sovereignty. That could lead to a full blown constitutional crisis and perhaps the downfall of another prime minister. At best, the government will find itself bogged down for the remaining four years of this parliament negotiating and legislating Brexit. If it is able to do anything else I will be surprised. Normal politics will continue in paralysis.

Mrs May should trigger Article 50, the instrument that initiates our withdrawal, as soon as possible. If the negotiation were over in two years, she would have almost two years to govern in “normal” circumstances. She would not want to go to the polls with the uncertainty continuing and the accusation that the negotiation had been botched.

One last word, about our democracy. We have narrowly escaped the election of Mrs Leadsom. I put it that way not just because she was not up to the job, but also because she would have led Conservative MPs despite the fact that in the last ballot 245 had voted against her. Her position would not have been much different from Corbyn’s in the parliamentary Labour Party. Meanwhile, Corbyn clams legitimacy because Labour Party members voted overwhelmingly for him, unperturbed that they are a tiny minority of Labour voters.

In a parliamentary democracy both government and opposition are organised in parliament. Yet both major parties have systems that can elect leaders unacceptable to their parliamentarians. Those systems are not fit for purpose. In the Labour Party a calamitous candidate won, and in the Conservative Party that was narrowly avoided (by the candidate’s withdrawal). For as long as these procedures remain ,they pose a national risk.

Written By

Michael Portillo