University of Illinois at Springfield

BREXIT:

The Future of Britain and the European Union

Jonathan Parker

International Law and Organizations – PSC 462

Dr. Adriana Crocker

May 1, 2016

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I. Introduction

This paper will discuss the European Union and United Kingdom’s role within the

organization, as well as the upcoming “Brexit” – Britain’s referendum on its continued

membership within the organization. I will start with a discussion about how the modern day

European Union came about – the formation of the European Coal and Steel Community in 1951

through the 1957 Treaty of Rome that formed the European Economic Community. The paper

will then move on to how it took the United Kingdom three times to succeed in joining the

European Community, and commence to that country’s 1975 referendum on its continued

membership in the Community. The discussion will examine the path towards the 2016

Referendum, presenting both sides of the discussion and presenting the consequences of a

“Brexit” to the United Kingdom and the European Union, and ending with an attempt at

answering the question whether or not the United Kingdom is better off in or out of the European

Union.

II. How the EU Came About

Five years after the end of the Second World War, France and Germany devised a plan to

ensure that their two nations, and the rest of Europe, would never go to war with one another

againi. The result of this plan was a deal signed by six nations to pool their coal and steel

resourcesii. France, Germany, Italy, Belgium, the Netherlands, and Luxembourg signed the

Treaty of Paris in 1951, establishing the European Coal and Steel Community1 (ECSC)iii. Britain

stood on the sidelines2. It also declined an invitation by ‘The Original Six’ to sign the Treaty of

1 Jean Monnet, one of the architects of the ECSC, said, “I never understood why the British did not join. I came to the conclusion that it must have been because it was the price of victory – the illusion that you could maintain what you had, without change (Wilson, “Britain and the EU: A Long and Rocky Relationship”).2 Winston Churchill supported the idea, wanting “a structure under which it [Europe] can dwell in peace, in safety and in freedom…a kind of United States of Europe (What is the EU and How Does it Work?)

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Rome in 1957, which established the European Economic Community (EEC). The formation of

the EEC had two goals: One goal was to transform trade, industry, and manufacturing, and the

other was to take a step closer to a unified Europeiv.

III. Exploring the Late Entry of the UK into the EU

The United Kingdom eventually saw the French and German economies recovering from the

War at a much faster rate that its own as well as forming a very powerful alliance, and Her

Majesty’s Government changed its mind about the Community. The UK first applied to join the

EEC in 1961 and had its entry vetoed by French President General Charles de Gaulle. General

de Gaulle accused Britain of a “deep-seated hostility” towards European Constructionv. The

French President was concerned that British membership in the EEC would weaken the French

vote within Europevi. He also believed that the United Kingdom was more interested in close ties

with the United States and was afraid that closer Anglo-American relations would lead to an

even more present American influence in Europevii.

De Gaulle vetoed Britain’s application to join the European Economic Community again in

1963, but his successor, Georges Pomidou, relented. One of his first foreign policy actions was

to encourage the United Kingdom to apply for membership to the Organization for a third timeviii.

The United Kingdom was allowed to join the EEC in January of 1973 under the administration

of Prime Minister Edward Heathix. The United Kingdom’s entry into the Community brought its

total membership up to nine countries. Denmark, Ireland, and Britain all joined in 1973 under

the first wave of expansion of the organization’s membershipx.

The First Referendum

Shortly after the United Kingdom joined the EEC, there was a referendum held on

whether or not to stay in the Community. The Referendum fulfilled a 1974 General Election

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pledge by the British governmentxi. Much like the coming June 2016 Referendum, Britain

negotiated new terms for itself in the Community if it voted to remain as a member. Prime

Minister Harold Wilson went on the record saying, “I believe that our negotiation objectives

have been substantially though not completely achievedxii.” Mr. Wilson first ensured that food

would be available to Britons at reasonable prices. Britain was also able to pay a fairer share in

the Community and was able to get back up to £125 million a year from Community Market

funds. They did not have to put a VAT tax on food or accept a fixed exchange rate for the pound

sterling.

A great anxiety expressed in the 1975 Referendum was that Parliament would lose its

supremacy and that Britons would “have to obey laws passed by unelected ‘faceless bureaucrats’

sitting in their headquarters in Brusselsxiii.” On April 9, 1975, the House of Commons voted 396

to 170 in favor of staying a member of the Community under the new terms. The government

was very clear about where they stood. “The Government have made THEIR choice. They

believe that the new terms of membership are good enough for us to carry on INSIDE the

Community. Their advice is a vote for staying inxiv.” The British people voted then to stay in the

Community, sixty-seven to thirty-three percentxv.

IV. Examining the path towards the 2016 Referendum

The Thatcher ministry (1979-1990) saw rising antipathy towards the European Community.

In 1984, Mrs. Thatcher fixed an injustice to the United Kingdom by negotiating a permanent

rebate on its Community contributionsxvi. She warned that if the European Community denied

her this, she would withhold VAT payments from themxvii. A great chasm started to come

between London and Brussels in the 1980s, where socialist Jacques Delors had taken over

leadership of the European Commission. Mr. Delors was trying to take the Community in the

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direction of a more federal Europe with a single currency, but Mrs. Thatcher was

uncompromising in her stance. In her 1988 speech to the College of Europe, she utterly rejected

a “European super-state exercising a new dominance from Brusselsxviii.”

The European project was mostly responsible for the end of Mrs. Thatcher’s premiership, as

was her anti-EU views that led pro-European Tories to move for her ouster. Mrs. Thatcher had

not always been so anti-Europe, but once in government her relationship with the heads of other

governments on the Continent began to disintegrate. Mrs. Thatcher signed the Single European

Act, which created the single European Market – one of the single biggest acts of European

integration. She defended her decision in her book The Downing Street Years: “Advantages will

indeed flow from that achievement well into the futurexix.” In 1995, after she had left Downing

Street, Mrs. Thatcher criticized her successor, John Major’s government for signing the

Maastricht treaty3, and returned to the spotlight saying that the UK might have to exit from the

EU because of it. By 2002, Mrs. Thatcher, now Baroness Thatcher, changed her mind about the

single market, saying that it had been a “terrible errorxx.” “Most of the problems the world has

faced have come from mainland Europe," she wrote, "And the solutions from outside itxxi.”

The Bruges Speech

In her speech to the College of Europe, Thatcher laid out a five-point plan to what she

saw as the future of success for the European Community. She believed in the willing, active

cooperation between the independent states of Europe. Mrs. Thatcher thought that trying to

“suppress nationhood” and concentrate power in Brussels was a recipe for disaster. To her, the

nations of Europe did not need a centralized bureaucracy in order to work together. She saw a

Europe that was united in a way that preserved national traditions, parliamentary powers, and

3 The Maastricht Treaty transferred huge amounts of power to the European Union. Britain managed to secure opt-outs from the single currency, thereby keeping the pound sterling, and from the social chapter (“Thatcher and Her Tussles with Europe” – BBC News).

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national pride. Mrs. Thatcher believed that this was what had made Europe great in centuries

past. The European Community policies have to tackle problems in a practical way. Mrs.

Thatcher stated that if the Community cannot fix problems which are “patently wrong” then the

European project would not get public support from its citizens for future developmentxxii.

Community policy had to encourage enterprise. Thatcher stated that the Treaty of Rome

was “intended as a Charter for Economic Liberty” although it had not consistently been read and

applied that way. There were requirements regarding fiscal matters that needed attention. The

Community needed to commit to the free movement of capital, abolish exchange controls,

establish a “genuinely” free market in fiscal services in banking, insurance, and investment,

make greater use of the European Currency Unit, and be able to accomplish all of these things

with the minimum amount of regulation. Mrs. Thatcher believed in a non-protectionist Europe

open to a liberal trading policy and a Europe that maintains its defense through NATO and made

certain that the United States continued its commitment to the defense of the Continentxxiii.

Tony Blair and Beyond

After his election in 1997, Tony Blair signed Britain up to the social chapter. This

delivered some of the social protections that his Labour Party had long wanted, and he then tried

to go about getting Britain to adopt the Euro. The UK’s economy, however, was doing well, and

support for the single currency was not widespread, so the Blair government had to put those

plans on holdxxiv.

The current Euro crisis has ruled out any plans for the United Kingdom to adopt the

single currency, and may have given rise to the current Euroscepticism that has taken root in the

Conservative Party and many parts of the public at large. In 2011, Prime Minister David

Cameron demanded exemptions for the United Kingdom to a treaty setting new budget rules at

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an EU summit meeting and then ended up vetoing the pact. This encouraged Eurosceptics to ask

for more freedom from EU regulation and soon enough the Prime Minister promised them a

referendum on the UK’s membershipxxv.

V. The Current Situation

The United Kingdom currently has seventy-three seats in the European Parliament. It has

held the revolving presidency of the European Council five times between 1977 and 2005 and is

slated to hold it again in 2017, pending the results of the referendum. The UK has twenty-five

representatives on the European Economic and Social Committee. This advisory body, which

represents employers, workers, and other interest groups, is consulted on proposed laws and to

get a better idea of the possible changes to work and social situations in the member countries.

Britain also has twenty-four representatives on the Committee of the Regions, which is the

Union’s assembly of regional and local representatives. The Committee is consulted on

proposed laws and to ensure that these laws take account of the perspective from each region of

the European Union. Britain maintains permanent communications with European Union

institutions through its representation in Brussels. The main task of Britain’s representation is to

make certain that the UK’s interests and policies are pursued as much as possible within the

Unionxxvi.

The United Kingdom contributes €11.342 billion to the European Union’s budget, which

equates to 0.52% of its GNI. The European Union only spends €6.985 billion in the United

Kingdom, which equates to 0.32% of the UK’s GNI. EU Member countries financial

contributions to the Union’s budget are shared according to means. In other words, the larger the

country’s economy, the more it pays. The goal of the budget is not to redistribute wealth, but to

focus on the needs of Europeans as a wholexxvii.

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VI. The Prospects for a Brexit

David Cameron announced the date for the referendum for June 23rd of this year and has

given his Cabinet ministers leave to campaign on either side of the issue4. After the

announcement of the date of the referendum, six ministers – Michael Gove5, Iain Duncan Smith,

Chris Grayling, Theresa Villiers, John Whittingdale, and Priti Patel joined the “Vote Leave”

campaign. Minister Gove says that Britain would be “freer, fairer, and better off outside the

EU,” as it has “proved to be a failure on so many frontsxxviii.”

The Brexit vote will see some conflict with major sporting and music events. Many England,

Wales, and Northern Ireland football fans might still be in France if their teams advance through

the group stages of the Euro 2016 football tournament. England and Wales are due to finish their

group matches by June 20, and they could still be there by the end of the week if they make it

through to the final sixteen teams. Northern Ireland has their last match on June 21 and will

have to stay in France should they advance through. Their first “knockout stage” matches would

begin on June 25th. It is also worthwhile mentioning that the Glastonbury Music Festival will be

on to its second day on June 23rd. The idea of allowing the festival-goers to cast their votes there

has already been ruled out. A petition on the Parliament website to allow a polling station at

Glastonbury was ruled out as polling stations do not fall under the purview of Parliament or the

Government, but the Electoral Commission. The Commission has said that it is impossible to

just “set up” polling locations. Some have wondered whether or not the date for the referendum

was chosen deliberately by the Prime Minister to have certain people out of the country and

4 The Cabinet has, however, backed the PM’s reform plan, which will be discussed later in this article (Wilkinson, “An Extraordinary 24 Hours in Politics”). 5 Gove is the Justice Secretary and the most prominent Cabinet Minister to campaign in favor of “Brexit” (Wilkinson, “An Extraordinary 24 Hours in Politics”).

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away from their polling places because of these conflicting events. The Electoral Commission

has urged voters to organize and send in their votes by post or proxyxxix.

VII. The Consequences of A Brexit on the UK and EU

If Britain votes to stay in the European Union, Prime Minister David Cameron has negotiated

changes to the UK’s membership in the Union that will take effect immediately after the vote.

The package includes changes to child benefit payments to migrant workers. If the UK votes to

remain in the Union, the cost of these payments will be recalculated to reflect the cost of the

migrants living in their native countries. The UK could also decide to limit in-work benefits for

migrants from the Continent during their first four years in the country. This “emergency brake”

can be applied in the event of very high levels of migration, but has to be “released” within seven

years without exception. The UK will also be allowed to keep the pound while being in Europe

as well as its business trade with the EU without any fear of discrimination. Any British monies

spent bailing out Eurozone nations will eventually be reimbursed. Safeguards for the City of

London will also be put in place to prevent Eurozone regulations being imposed upon it. There

is a commitment from Brussels that the United Kingdom will not be part of an “ever closer

union” with other EU member states and this commitment will be incorporated in an EU treaty

change. If 55% of national Eurozone parliaments object to a certain piece of legislation from the

EU Parliament, the legislation will be rethought. Cameron’s settlement insists that all EU

institutions and member states “make all efforts to fully implement and strengthen the internal

market,” take “concrete steps toward better regulation,” and cut bureaucratic red tapexxx. The

Prime Minister imposed some limits on the freedom of movement, by denying automatic free

movement to nationals of a country outside the Eurozone that marries an EU national. This is

part of a measure that is meant to tackle “sham” marriages. New measures would also be in

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place to allow the authorities to exclude people from a country that they believe to be a security

risk, even if there is no previous criminal recordxxxi.

This deal differs somewhat from what the Prime Minister originally wanted. David Cameron

had asked for a total ban on migrant workers sending child benefits abroad and wanted the

United Kingdom to have a thirteen-year “emergency-brake” on limiting in-work benefits.

Regarding financial regulations, a clause was inserted into Cameron’s agreement “to ensure the

level-playing field within the internal market” in response to French fears that Britain was

seeking a competitive advantage for the City of London by wanting special protectionsxxxii.

If the UK votes to stay “IN”

Staying in the European Union will allow the United Kingdom to avoid exporter tariffs

and bureaucratic red tape, which is important as forty-five percent of British exports go to the

Eurozone. Britain can obtain better trading terms because of the size of the Union and, whether

or not Britain remains part of the European Union, the UK will have to pay money to access the

single market. Also, European Union regulation collapses twenty-eight individual national

markets into one European standard, which nominally reduces the red tape and benefits business.

If Britain remains in the Union, it can fight for better regulation. Leaving the Union will not

reduce immigration into the UK and nations that trade with the EU from the outside have been

proven to have higher rates of immigration than Britain does at the momentxxxiii.

If the UK votes “LEAVE”

The arguments for leaving the European Union are equally persuasive. If the UK leaves,

it can stop sending £350 million to Brussels every week6. Britain can change the open door

immigration policy to EU citizens and block the non-EU immigrants that could contribute to the

UK’s economy. Leaving the Union is going to return control over areas such as employment

6 This equates to half of England’s schools’ budget (“A Background Guide to “Brexit” from the European Union”).

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law, health, and safety and the UK can negotiate a new relationship7 with the Union without

being bound by EU lawxxxiv.

The options for a United Kingdom that decides to leave the Union are not entirely

appealing. The European Union will not disappear as a trading bloc if the United Kingdom exits,

and a post-Brexit Britain would need to form a new set of trading and institutional relationships

with it. There are five different models that the UK could chose to replace their membership in

the European Union. They could join the European Economic Area, which is a solution that has

been adopted by all but one of the EFTA states that did not join the European Union. Britain

could also try to emulate Switzerland, which has over twenty major and one hundred minor

bilateral agreements with the Union. The UK could try to establish a customs union with the

EU, like Turkey, or try to strike some sort of comprehensive free-trade agreement, rely on WTO

rules for access to the European market, or attempt to negotiate a deal for itself that manages to

retain free trade with the EU but avoids the disadvantages that the other four models represent

for Britain. There is a great deal of uncertainty over how the British government would go about

accomplishing any of this in a post-Brexit UK as the country will have lost a great deal of good

will in the European Unionxxxv.

VIII. So, Better In or Out?

The answer to this question really depends upon whom you ask. Businesses tend to favor

Britain’s continued membership in the European Union, as it makes it simpler for them to move

their goods worldwide. Chairman of the British Telecommunications Group, Sir Michael Rake,

has said that there are “no credible alternatives” to staying in the Unionxxxvi. Others disagree,

such as Lord Bamford, Chairman of J.C. Bamford Excavators Limited. He believes that a Brexit

7 The United Kingdom would then be free to negotiate trade deals with other important markets like China, India, and the United States (“A Background Guide to “Brexit” from the European Union”).

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would allow Britain to negotiate trade deals in the best interest of the country, “rather than being

one of twenty-eight nationsxxxvii.” The British Chamber of Commerce has also gone on record

saying that fifty-five percent of its membership supports staying in a reformed European

Unionxxxviii.

The Prime Minister has warned the British public that voting for Brexit would be “a leap in

the dark” and wants voters to back his reform dealxxxix. Rob Halfon, deputy Chairman of the

Conservative Party supports staying in the EU because of “the threats of Islamism, terrorism,

Syria, and the emergent Russia. I believe an alliance of democracies is better to shape things in

our own interestsxl.” Sir Malcolm Rifkind, a Minister in the Thatcher and Major administrations,

has added “They would be dancing in the Kremlin if Britain left the EUxli.” Those who wish to

stay believe that Great Britain gains from the European Union membership as it makes selling

things to other EU-bloc nations easier. Immigration helps economic growth and also helps

Britain pay for its public services. People like Prime Minister Cameron, the Labour Party, the

SNP, Plaid Cymru, other political parties and a large segment of the population of the United

Kingdom think that Britain’s standing in the world would be greatly damaged by leaving and

that the country is more secure as part of a blocxlii.

This study has done its best to provide the historical background in regards to the history of

the United Kingdom and the European Union, as well as arguments for and against the upcoming

“Brexit.” The author of this paper cannot and will not venture an opinion as to whether or not

the United Kingdom would be better off in or out of the United Kingdom as he is an outsider

looking into the affairs of another country and cannot understand all of the intricacies

surrounding this decision. He has presented the material in the best way he understands it and

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leaves it up to the reader to decide for him or herself whether or not a “Brexit” would be

beneficial to the United Kingdom.

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ENDNOTES

i "What Is the EU and How Does It Work?" What Is the EU and How Does It Work? BBC News, n.d. Web. 18 Mar. 2016. <http://www.bbc.co.uk/guides/zgjwtyc>.ii Wilson, Sam. "Britain and the EU: A Long and Rocky Relationship - BBC News." BBC News. BBC News, 1 Apr. 2014. Web. 18 Mar. 2016. <http://www.bbc.com/news/uk-politics-26515129>.iii "From the Second World War to the Treaty of Rome." Parliament and Europe. UK Parliament, Apr. 2013. Web. 12 Apr. 2016. <http://www.parliament.uk/about/living-heritage/evolutionofparliament/legislativescrutiny/ parliament-and-europe/overview/post-ww2-to-treaty-of-rome/>.iv ibidv Wilson, “Britain and the EU: A Long and Rocky Relationship – BBC News”vi "The EEC and the Single European Act." Parliament and Europe. UK Parliament, Apr. 2013. Web. 18 Mar. 2016. <http://www.parliament.uk/about/living-heritage/evolutionofparliament/legislativescrutiny/parliament-and-europe/overview/britain-and-eec-to-single-european-act/>.vii ibidviii Campos, Nauro F., and Fabrizio Coricelli. "VOX CEPR's Policy Portal." Britain's EU Membership: New Insight from Economic History. VOX: CEPR's Policy Portal, 3 Feb. 2015. Web. 12 Apr. 2016. <http://www.voxeu.org/article/britain-s-eu-membership-new-insight-economic-history>.ix "The EEC and Britain's Late Entry." The National Archives. The National Archives, n.d. Web. 18 Mar. 2016. <http://www.nationalarchives.gov.uk/cabinetpapers/themes/eec-britains-late-entry.htm>.x UK Parliament, “The EEC and the Single European Act”xi Butler, David, and Uwe Kitzinger. "1975 Referendum Pamphlet." 1975 Referendum Pamphlet. N.p., n.d. Web. 18 Mar. 2016. <http://www.harvard-digital.co.uk/euro/pamphlet.htm>.xii ibidxiii ibidxiv ibidxv (Wilson, “Britain and the EU: A Long and Rocky Relationship – BBC News”) xvi ibidxvii "Thatcher and Her Tussles with Europe." BBC News. BBC News, 8 Apr. 2013. Web. 18 Mar. 2016. <http://www.bbc.com/news/uk-politics-11598879>.xviii (Wilson, “Britain and the EU: A Long and Rocky Relationship – BBC News”)xix (“Thatcher and Her Tussles with Europe” – BBC News)xx ibidxxi ibidxxii Thatcher, Margaret. "Speech to the College of Europe ("The Bruges Speech")." Speech to the College of Europe ("The Bruges Speech"). Margaret Thatcher Foundation, n.d. Web. 18 Mar. 2016. <http://www.margaretthatcher.org/document/107332>.xxiii ibidxxiv (“Thatcher and Her Tussles with Europe” – BBC News)xxv (Wilson, “Britain and the EU: A Long and Rocky Relationship – BBC News”) xxvi “United Kingdom.” EUROPA. The European Union, n.d. Web. 18 Mar. 2016. <http://europa.eu/about-eu/countries/member-countries/unitedkingdom/index_en.htm>.xxvii ibidxxviiiWilkinson, Michael. “An Extraordinary 24 Hours in Politics – Cabinet Divided.” The Telegraph. Telegraph Media Group, 20 Feb. 2016. Web. 18 Mar. 2016xxix ibidxxx Wheeler, Brian, and Alex Hunt. “The UK’s EU Referendum: All You Need to Know – BBC News.” BBC News. BBC News, 1 Mar. 2016. Web. 18 Mar. 2016. xxxi ibidxxxii ibidxxxiii “A Background Guide to “Brexit” from the European Union.” The Economist. The Economist Newspaper, 24 Feb. 2016. Web. 18 Mar. 2016. <http://www.economist.com/blogs/graphicdetail/2016/02/graphics-britain-s-referendum-eu-membership>. xxxiv ibidxxxv ibidxxxvi (Wheeler and Hunt, “The UK’s EU Referendum: All You Need to Know – BBC News”)xxxvii ibidxxxviii ibid

xxxix (Wilkinson, “An Extraordinary 24 Hours in Politics – Cabinet Divided”)xl ibidxli ibidxlii (Wheeler and Hunt, “The UK’s EU Referendum: All You Need to Know – BBC News”)