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The UK and the EU: redefining the relationship or heading for the exit?

A Note by the Director                                                                            Ditchley 15/08


Introduction

Our first Ditchley-based conference of the 2015/2016 season was on the crucial and sensitive issue of Britain’s relationship with the EU, and in particular the prospects for the in-out referendum to be held before the end of 2017. The discussions were excellent – passionate and informative – even though the views of those arguing for the UK to leave the EU were under-represented. Skilful chairing helped to ensure that the debate remained amicable and rational. We were not sure the same would be true of the referendum when it came.

Summary

The UK referendum is for most people in Britain more about history and culture than about trade or similar issues. The EU is not high on the list of major concerns of most voters, and the referendum was called for reasons largely to do with party management of eurosceptics. But the UK is far from the only country with strong eurosceptic voices these days, and the contagion factor is a worry for others.

The package under negotiation by the Prime Minister with his EU colleagues is now reasonably clear, and looks manageable, with the possible exception of changes to benefits for other EU citizens living in the UK. It is less about changing the relationship between the UK and the EU and more about showing that the EU is moving in the right direction, and can be a comfortable place for the UK to be in the future. Some of the changes being sought are more about symbolism than reality, but will be important for party management. A grand bargain which accepts that the UK will stay out of ever closer union, while supporting an ever-closer eurozone, is possible, but it is more accurate to talk about flexible variable geometry than about a two-speed or two-tier EU.

The package is nevertheless a significant risk because many will regard it as insubstantial, and a repeat of the Harold Wilson “trick” of 1975. There could also be much criticism about the lack of treaty change now and the unreliability of any “post-dated cheque” for later treaty change. All this could start to frame the referendum debate in an unhelpful way for the “stay” campaign. However, most thought that the package would be quickly forgotten, and the debate in the end would be more about the fundamentals of staying or going.

The current views of other EU member states are a combination of two things: deep irritation at Britain’s often unhelpful behaviour and insistence at holding a referendum and negotiation when there are so many more fundamental and urgent issues to be tackled; and an underlying wish for the UK to stay, because of the risk to the current balance of power within the EU, the fear of contagion, and the signal it would send the rest of the world about the state of the EU. They are ready to negotiate constructively to help the UK stay, if the UK is itself negotiating constructively. But they will not pay much of a price to make this happen, not least for fear of setting precedents, and antagonising their own domestic constituencies. They probably cannot help the stay campaign too much in the referendum, though injudicious statements could help the leave side.

The rest of the world has a stake in the outcome of the referendum, and most countries appear to want the UK to stay in. Indeed they find it hard to understand why the UK would contemplate leaving. There is little or no support out there for the idea of an Anglosphere as an alternative to the EU, and little credibility given to the idea that the UK could be a better trading and investment partner outside the EU. Outsiders could help the stay campaign by making clear how they would behave if the UK were to leave; less so by stressing why it is in their own interests for the UK to stay in.

What kind of alternative trade arrangement with the EU would be best if the UK left? The Norway, Switzerland and Free Trade Agreement alternatives found few takers. The WTO option looks best but most participants thought this would still leave the UK significantly worse off vis-à-vis the single market than now, and with little chance of influencing greater opening in vital areas like services and the digital economy. The rest of the EU would in any case not be in any mood to do us favours if we chose to leave – the divorce would be acrimonious, like most divorces. Overall, most participants thought the UK would have to find its own new relationship with the EU and place in the world in difficult circumstances, and would struggle to be as influential as it was now.

The referendum campaign is unpredictable, and will be hard fought at every stage. Those in favour of leaving are highly motivated and have been waiting for this moment for a long time. They have punchier arguments, can talk about a brighter future outside the EU, and portray themselves as anti-establishment and anti-elite, which may play well. They can also point to the current refugee/migration crisis as another argument for leaving the incompetent EU, even though the numbers arriving in Europe from the Middle East and North Africa have nothing to do with the UK’s EU membership. Their problems are lack of a plausible and agreed alternative to EU membership, and of a major political figure as leader.

The “stay” campaign has broad political and business support, and better economic arguments. But defending the status quo does not lend itself easily to positive vision and arguments, and just pointing out the risks of leaving may not be enough. They need to bring home that the UK will be better off, safer and more influential by playing a full role in an institution which shares our values and broad objectives, and is reforming itself in ways which suit the UK. They can also point to pocket-book issues like cheaper roaming charges and low-cost flights. The business voice will be important but not without risks.

The UK will no doubt remain a serious economic and political player in the world whatever the result of the referendum. A clear result either way would be better than a narrow squeak. In any case the stakes are high.

Main Note

Why is the UK holding a referendum?

This was not originally part of our agenda, but one of the issues puzzling to outsiders, and even to those from other EU member states, was why a referendum was necessary. One explanation was that it was essentially about managing the eurosceptic wing of the Conservative Party. The current Prime Minister had not believed he could do this successfully without promising an in-out referendum, even if this were a considerable gamble. The idea was presumably to settle the issue, if not for ever, then at least for a considerable time, to prevent it from tearing the Party in two, and feeding UKIP popularity.  (There was doubt in the room that the referendum would have this effect of settling the issue if the result were in favour of staying in, particularly if the margin was narrow – i.e. the “neverendum” scenario we had already seen in Scotland. But that is another story.)

There was of course more to it than this narrow party point.  British geography, history and culture – the maritime tradition, the Empire, the transatlantic relationship etc. – meant that many British people had always been relatively unenthusiastic about the European “project”, and unsure about where it might take them. Questions of sovereignty and identity were never far from the surface. The EU had always been an easy scapegoat when things went wrong, and parts of the population which had not benefitted from globalisation could always imagine that things would have been better if the UK had been freer and more sovereign. 

Was the UK population more eurosceptic or even europhobic now than in the past? Some thought so, though the polls did not support this. The EU remained well down the list of the main concerns of ordinary people. Popular worries about the EU had also changed over time. In 1975, there had been a lot of concern about the Common Agricultural Policy and our relationship with the Commonwealth. It was now much more about immigration/migration, even though the EU was only directly relevant to the European element of this.

We noted that the UK was far from the only country in the EU where eurosceptism/populism was on the rise. One of the fears in the minds of some around the table was that the UK referendum, particularly if it led to the UK leaving the EU, might feed the desire for other countries to follow suit, and put more wind in the sails of eurosceptic forces elsewhere. One of the issues in the minds of other countries was also the need to avoid setting precedents by offering too special a package to the UK to avoid the British leaving. Otherwise other countries might be tempted to try the same tactic.

The package being negotiated

We spent a good deal of time on the issues under negotiation between the British government and the other EU governments. British demands had not been published at that stage (they were subsequently, on 10 November), and there were continuing complaints from EU partners that they still did not really know what they were being asked to agree. Nevertheless the broad shape of the package seemed reasonably clear, on the following lines:-

  • ever closer union”: several speakers pointed out that, in their context, these three words did not mean the obligatory ever closer union of states which they were taken as referring to by most in the UK – the relevant passage had indeed been very carefully negotiated by John Major as Prime Minister. Nevertheless further language to the effect that the UK was not bound by this idea was important symbolically, not least because this helped to kill the idea that the UK was locked in to an ineluctable process leading to the “United States of Europe” (however implausible such a concept now looked). Most around the table thought that some kind of document or declaration to this effect could be negotiated.
  • benefits for other EU citizens living/working in the UK: this had originated in a demand to restrict freedom of movement within the EU but it had become clear that this was out of the question. It was now related to restrictions on in-work and/or out-of-work benefits for citizens from other EU countries living/working in the UK, for example stipulating that they would not be eligible for in-work benefits such as tax credits for four years. Although the statistics suggested that only 7% of beneficiaries were in fact citizens of other EU countries, this was again an issue which had significant symbolic value in the immigration/migration context. Although what was being asked for might not seem huge, it might in the end prove the trickiest issue. Anything which was obviously discriminatory between EU citizens would not fly in legal terms, and was likely to be strongly opposed by the new Polish government and others. Recent helpful ECJ rulings around the effects of secondary EU legislation might offer some opportunities, as might changes in UK domestic law, but it was unclear whether this would be enough for British political purposes, even if combined with, say, longer transitional periods for freedom of movement from any future new EU members. Some round the table thought that the British government would have been better advised to pursue a crackdown on benefit abuses, a cause shared by all EU partners. We were also reminded that the process in this area could be important, for example, the relative difficulty of amendments to existing instruments being agreed by the European Parliament, compared to a new protocol needing ratification by 28 national parliaments.
  • relations between eurozone members and other EU members: this was a serious issue where the British government had legitimate concerns that their interests (and those of other “outs”) could be damaged by eurozone decisions in which they had no say. There was obviously a specific worry about the financial interests of the City of London, a crucial part of the UK economy. There was a related point about the risks of “caucusing”, where eurozone members met before EU-wide meetings and effectively decided the outcome in advance. The UK was not asking for a veto on eurozone decision-making but some kind of emergency brake, to be pulled when decisions looked likely to be damaging. The effect would be a compulsory delay for further consultation and/or reference to the European Council. The general view was that something along these lines should be negotiable, although the details would not be easy to pin down. There were differing views around the table on whether caucusing was a real risk, given the wide divergence of views between eurozone members on most issues. Some UK participants thought the risk should not be dismissed, pointing to the decision by the eurozone in July 2014, in the context of the Greek crisis, to use European Financial Stability Mechanism funding, which involved the “outs” too (even though this had been subsequently corrected).
  • declaration that the EU is a “multicurrency” union: in some ways this might seem a statement of the obvious, but the symbolism was again important, to signal that it was now accepted that not all EU countries would adopt the euro, or could be expected to. This was perhaps easier now that it was clear that other “outs” beside the UK would remain out for a long period, and would possibly be in a similar position to that of the UK in not contemplating joining at any stage. Again, those round the table thought that something like this should be negotiable.
  • competitiveness and deregulation: here the UK was pushing at an open door, perhaps jumping onto an already moving bandwagon, not least given the views of the new Commission and some other member states. Plenty was already happening on this front e.g. the “Refit” programme of examining all old EU regulations to see if they should be discarded or reworked. Virtually everyone wanted to see less regulation, and more use of the subsidiarity principle. There were also areas where the UK was very keen to go further in the single market, again with the help of the Commission, for example services and the digital economy. Here there would continue to be resistance in some quarters (e.g. Germany on services) but it was interesting that these were areas where the UK was pushing for more Europe, not less.
  • role of national parliaments: this was another area where the UK had support from some other member states. If, for example, the UK was asking that certain “yellow card” provisions (whereby if several national parliaments objected to a measure it was delayed and looked at again) be made into “red card” provisions, this was something there would be support for. The time periods for playing the card could be extended and other flexibilities introduced. At the same time a good deal about increasing the role of individual national parliaments still lay in national hands.

Overall the view of the participants was that a package meeting Mr Cameron’s demands, in so far as they were known, should be manageable. This was partly because he was not asking for too much. He had recognised the political impossibility of treaty change in the short term, and the trap of asking for things which he would not get, thereby prompting accusations of failure. Mr Cameron had also recognised (rather belatedly, some might say) the importance of cultivating Britain’s partners and particularly his own counterparts, and of adopting a cooperative rather than confrontational approach, not least by convincing them that he wanted Britain to stay in and was looking for ways to make this possible, rather than searching for reasons to leave. He was not approaching the negotiation as if it were a zero sum game, and this was welcome.

We were also told that the aim of the renegotiation had not been so much a change in the UK’s relationship with the EU as a demonstration that the EU itself had changed, and was changing, in the right directions, and that therefore Britain could be comfortable in it. One reason for this approach was that the Balance of Competences review had shown to many people’s satisfaction that competences were actually reasonably distributed between national and European level (though eurosceptics contested this).

There was of course a huge risk in all this: the accusation that the “renegotiation” had been a fraud from the start, that the Prime Minister was not using the powerful bargaining lever of a possible British exit seriously, and that nothing fundamental would have changed to justify a vote for staying in. The die-hard opponents of British membership would have said that – would say that – virtually whatever the result of the negotiation.  The die-hard supporters of staying in the EU would likewise vote to stay whatever the result of the negotiation. The question was therefore how the so-called mild or moderate eurosceptics or agnostics would respond. Could they be convinced that there was enough in this package to make them rally to the “stay” camp? One key constituency here was the significant number of Conservative MPs (and some Ministers) genuinely unsure of which way to jump. The referendum would be a very different prospect if a majority of Conservative MPs were campaigning against staying, even if the Conservative Party would remain divided, and the Party machine itself would have to stay neutral.

So would the package be enough? Views were divided. Some thought there would be sufficient pieces of important symbolism, and real protections in some areas, to be sellable. Others feared the Prime Minister’s “achievement” would be hard put to it to avoid ridicule from the press and others, and would be characterised as a repeat of Harold Wilson’s trick in 1975. Would some traditional European “blood on the floor” during the negotiations help, for example a good old Franco-British row between Cameron and Hollande about some issue or other, especially if Cameron were seen to win it? There were suspicions that some such piece of theatre was being cooked up. However we were reminded that it took two to tango, and M. Hollande did not necessarily want a row, or need one for his own domestic purposes.

The question in the previous paragraph was closely related to a wider issue: how important would the negotiated package be in the referendum itself, compared to the more fundamental arguments in favour of and against staying in? Here too there was no consensus. Some feared that it might get the campaign off on the wrong foot, and contribute to the debate being framed in unhelpful ways. Others thought the details would be lost on the general public, and would be relatively quickly forgotten once the campaign proper got underway. There was rather more agreement that if the campaign did turn on the negotiated package, it would be dangerous for the “stay” camp. The Prime Minister could be the crucial factor in the “stay” campaign, and it was important that he retained his credibility.

One related issue which could be important in the campaign was the credibility of any promise of future treaty change to embody reforms already politically agreed, if and when treaty change became politically possible at a later date. There was bound to be a lot of criticism of a post-dated cheque. There were precedents e.g. for the Danish referendum, but it was not clear how well they would stand up to scrutiny.

The views of other EU member states

We did not go into huge detail about the views of each member state, or try to put together a list of those countries which would be helpful, and those which would not. There was a view that the institutions, particularly the Commission, would be as important as any individual member state. Instead we tried to identify the overall mood amongst Britain’s partners, not least given that there were some parts of the negotiation which were not at that stage entirely clear.

This mood seemed to have two main elements:-

  • deep irritation with the UK, both for its recent negative behaviour and self-marginalisation in some areas, and for its steadfast refusal (however justified by the formal position) to help partners over either the eurozone crisis or the more recent refugee/migrant crisis. There was also a lot of irritation that the UK was insisting on holding a referendum and a negotiation on what others saw as marginal issues, at a time when the rest of the EU governments and publics were consumed by more fundamental priorities. The UK should remember that other countries had domestic constituencies and domestic imperatives too.
  • a strong desire that the UK should in the end stay, even if combined with reluctance to pay a significant price to make this happen, and with a feeling in some quarters that the UK was already halfway out the door. This was partly for balance of power reasons within the EU (the Germans did not want to be left “alone” with the French, or vice-versa, and the rest did not want to be left alone with the Franco-German tandem); partly for fear of the contagion effect on eurosceptic and anti-globalisation forces elsewhere in Europe of a British departure, particularly in France with the Front National; and partly because of the potentially disastrous signal it would send to the rest of the world about the health of the EU at an already difficult time, and about the weight of the EU in international economic and political affairs.

The general sentiment seemed to be that, as suggested above, the negotiation with the UK could be successfully concluded. However, that did not translate into confidence that the referendum itself would be won. There was also still puzzlement about the political and cultural forces driving the eurosceptic campaign in the UK, particularly from those in France and elsewhere who tended to see the EU as already too “Anglo-Saxonised” by years of successful British pressure, and to see Britain as already having a favourable set of opt-outs.

Was there scope for a kind of grand bargain whereby the UK gained greater acceptance of its position of heading in a different direction from the eurozone (together with at least some of the other “outs”), in return for strong British support for further eurozone (and perhaps Schengen) integration as long as Britain’s own interests were not at stake – replacement of “ever closer union” by “ever closer eurozone”? This was already in effect the British government’s position, since they saw lack of growth in the eurozone, or even its possible collapse, as one of the major threats to future British prosperity. Recommending integration for others while avoiding it for yourself might seem paradoxical or self-contradictory, but it reflected a British view that, while the decision to create the euro had been a mistake, it now had to be made to work, which could only happen through much deeper integration.

There was support around the table for this kind of bargain, although it was also argued that the boundary between the Eurozone and the rest of the EU needed to be flexible, not rigid. We should not talk of two-speed Europe or a two-tier Europe, but about the good old concept of variable geometry. Such a bargain could well be where we were heading. But this was combined with annoyance at an apparent British view that a strong reason to leave the EU, now or in the future, would be continuing messes in the eurozone and Schengen, when the UK had chosen not to be part of either. This gave a whole new meaning to having your cake and eating it.

How far could it influence British public opinion if other EU member states were to say clearly that they wanted the UK to stay? We found it hard to give a clear answer to this. Clearly a general sentiment that other members of the club thought we were important partners worth keeping in should help. However, as one participant put it, the British public were not waiting for the German government to tell them

what to do. French statements would probably be even less helpful. The fact that other member states thought that it was in their interests for the UK to stay did not automatically translate into it being in the UK’s own interests to stay. Conversely, unhelpful statements or actions by others in the EU would inevitably be seized on in the campaign, and could prove important if the campaign were evenly balanced, particularly at a late stage. The “stay” campaign would inevitably live in fear of a damaging Commission statement or ECJ ruling.

The views of the rest of the world

There was agreement that the rest of the world did have a significant interest in the outcome of the referendum, and that most international actors saw their interests as best served by the UK staying in the EU, not least because they wanted the UK to remain a pressure point within the EU for a liberal free trading approach. One exception might be President Putin (the “stay” campaign should hope that he would say so!).  The US view that they preferred a strong UK in a strong EU had been clearly expressed already, and no doubt would be again. The same seemed to be true of countries like Canada, Australia, New Zealand, Japan, and even China. Most participants saw no credibility at all in the idea of an “Anglosphere” as an alternative grouping for the UK outside the EU. The idea of the UK as a bridge between the US and the EU seemed odd once the UK was out of the EU – it would be a bridge to nowhere. There was also a strong view that many foreign investors in the UK, such as the Japanese, would take a hard look at their investments if the UK were to leave, since these had originally been largely based on the UK as an attractive springboard to the single market.

It was clear that for at least some of those looking at the British debate from the outside, the issue of membership of the EU formed part of a wider question about Britain’s role in the world – a withdrawal from the EU would be seen as confirming existing suspicions that the UK was retreating from its traditionally active and engaged international stance. This was not altogether straightforward – some eurosceptics saw liberation from the dead weight of the EU as a springboard to a bigger British global role. But the interpretation of a British retrenchment was certainly likely to be the dominant one if the referendum went against British membership.

How realistic in the eyes of others was the idea of the UK outside the EU as a reinvigorated free-trading nation, able to gain better trade and investment access to major partners? Not very, was the answer from most round the table. The statement made by US Trade Representative Froman at the time of the conference – that a UK outside the EU would need to take its place alongside other moderately important partners, with no specially favourable access to the US market – set the tone. The general, although not unanimous, sentiment was that the UK would inevitably have less negotiating weight by itself than as part of the EU, and could expect to be treated accordingly. On the other side it was argued that the UK was hampered by the current need to have consensus at 28 for trade negotiations and market-opening measures, and could therefore get less out of major trading partners in return. Countries like Switzerland could be more agile and more successful.

How far could non-EU international actors influence the debate and the referendum? We thought that they had a role in addressing questions about claimed attractive alternatives such as the Anglosphere or a better trading relationship with China. Partners should therefore not hesitate to speak about their views, and about how they would react if the UK left the EU. But this needed to be handled carefully.  A concerted campaign of statements appearing to disregard the British people’s right to choose could easily be counterproductive. It was also not necessarily helpful to say, for example, that the UK staying in the EU was in US interests. As with EU partners, that did not prove that staying was in the UK’s own interests.

Alternatives to EU membership

This discussion was part of a wider debate about what international alternatives there might be for the UK out of the EU, and in particular how the UK might best retain access to the EU single market. There was a prior argument about how far those in favour of leaving the EU needed to present an alternative. There were clearly divisions in the “leave” camp between free-traders and protectionists, and between proponents of models such as Norway, Switzerland or Turkey. Most thought the absence of a clear and agreed alternative would be a serious weakness for the “leave” camp. It was argued on the other side that the case for leaving could be argued on its merits, and the alternative left for democratic decision later.

It was also pointed out that, in the event of a referendum decision to leave, it would not be the “leave” camp conducting the negotiations, but the same government as before. It was in any case not just up to the UK to choose. There was a strong feeling that, if the UK voted to leave, the rest of the EU member states would be in absolutely no mood to be generous, and would not be granting us whatever we wanted just because of the importance of the UK market to them. (The comparison between how the rest of the UK was preparing to treat Scotland if it had voted to leave the UK was instructive.)

On the single market, there was little or no support for the Norway option, which the Norwegians themselves strongly disliked (“pay and no play”), or the Switzerland option, which worked for no-one. A Free Trade Agreement could be hard to negotiate. The most realistic option might simply be one where normal WTO rules would apply. But it was hard to see how that would be as good as what the UK currently had.

Whatever the option vis-à-vis the EU itself, all the UK’s other external trade relationships would need to be renegotiated, with no guarantee of even as good a result as now, as argued above. This would be a massive exercise lasting several years, for which the UK government had no existing capacity. This would of course only be part of the wider renegotiation of a myriad of other arrangements in almost every field. This was a transitional cost, and should be seen as such, but it could be very high and absorb many years of effort.

The overall view was that the UK was sui generis, given its size and economic, political and military weight in the world, and in the event of leaving the EU would have to find its own new place in relation to the EU and the rest of its international partners in ways which could not be easily predicted now. Existing models could not really tell us much about what this would look like. The vast majority of the participants round the table found it very hard to imagine this could be a better place for the UK, or for them, than the one we occupied now. But this view was perhaps inevitable given the one-sided make-up of the attendance.

Prospects for the referendum campaign

We spent a lot of time discussing the referendum campaign and what it might turn on. No-one could predict this with any confidence, as we had seen in previous referenda. People had a habit of answering a question different from the one on the ballot paper, for example by voting against the incumbent government, whoever they happened to be at the time. There was a strong possibility in this case that many people would see the referendum as a chance to vote against the establishment/elite. This would also be a campaign fought out in social media as much as through more traditional news outlets – and social media tended to be made up of self-reinforcing groups and to be a largely fact-free zone. It was also not yet clear where some of the mainstream press would come out – there were no doubt feverish discussions under way with key proprietors. All this made predictions tricky, to say the least.

How far would voters be swayed in the end by facts or by emotion? This might not be quite the right question, since the two were often mixed up together in complex ways. However, there was a view among many participants that most voters would in the end be guided more by their gut instincts than by the detailed arguments of either side. They would be bombarded during the campaign by semi-spurious economic statistics by both sides, and would find it very hard to distinguish the true from the false. Finer points about how the EU worked, or could change in the future, would be lost on most people. This was likely to put a heavy premium on spokesmen whom people felt they could trust, which was why the Prime Minister’s role could in the end be so important (though some made the comparison with President Chirac of France in 2005, who had imagined that it was possible to slag off the EU most of the time, then turn round during the campaign to say it was all fine, and still be taken seriously.)

If the campaign were heavily influenced by emotion, this could give an advantage to the “leave” camp, many of whom tended to be more passionate about their views than their opponents, and who had been waiting for this moment all their political lives. They were well-financed, had simple and appealing arguments about sovereignty and EU bureaucracy, and could more easily talk about a brighter, different future than those defending the status quo. They could also present themselves as the anti-establishment force. Press campaigns about the idiocies of the EU had been preparing the voters for this kind of campaign for years. The big problem of the “leave” camp could be its obvious divisions, and the lack so far of a major political figure to lead it.

The "stay” campaign would inevitably play heavily on fears of the unknown, and the leap in the dark that leaving the EU would represent in a dangerous and unpredictable world. Such tactics had in the end paid off in the Scottish referendum, despite the criticisms at the time. They should also have the support of most of the political parties (Labour, Liberal Democrats, SNP, Greens etc.), of most of business and the unions (despite doubts on the left of the spectrum) and of most of the rest of the establishment. The economic arguments should on the whole favour them, even through the blizzard of competing statistics, as should the fact that the international community on the whole wanted the UK to stay in the EU. The context of the campaign could also be changed at some stage by financial turmoil if Brexit began to appear a real possibility. The problems of the “stay” camp would be around the less punchy, more diffuse arguments on which they would inevitably rely, the difficulty of making the status quo seem attractive/positive, and their identification with the elite/establishment.

Many participants thought that the “stay” campaign would need to make a particular effort to offer a positive vision of the future, with the UK a full-hearted member of the EU, and appealing themes and slogans, as well as the warnings about the economic and security risks of Brexit and the absence of a plausible alternative. Saying it was not much of a club but we still wanted to be members would not cut it. Areas to look at here included Britain’s role in the world, which most voters wanted to see as strong and influential; protection of the public through EU anti-crime and anti-terrorism measures; common health and safety standards; and pocket-book issues such as cheaper mobile-roaming fees and low-cost easy travel to other EU destinations.

How far would it be useful to emphasise the difficulties a vote to leave might cause for the place of Scotland in the UK, or for the position of Northern Ireland, with its land border with the Irish Republic? The latter in particular tended to be ignored, as did the negative effects for the Irish Republic itself if the UK left. These issues deserved to be discussed much more intensively than they had been so far. However it was not clear how far they would resonate in the end with English voters.

The “leave” campaign meanwhile had plenty of material to work with in the continuing problems of the eurozone (“why would we want to remain tied to such a failure?”), and particularly in the current refugee/migration crisis. Many suggested that, if the main issue in the referendum became immigration/migration, the “stay” campaign was likely to lose, even though Britain’s membership of the EU had little or nothing to do with the current flow of people from the Middle East and North Africa, and leaving was likely to make, for example, the problems of migrants trying to get into the UK from Calais worse, not better. The “stay” camp would certainly need to work hard on this issue, to make sure it did not stay a “fact-free” zone, to distinguish between EU and non-EU migration, and where necessary to bring out some of the positive economic sides of migration, while recognising that these benefits were not evenly spread across the population. The arguments were not helped by the government’s own insistence on talking about a misleading net migration figure, and including overseas students in the figures.

How helpful would it be for the “stay” campaign if business spoke out strongly? The general view was that it would be positive. The business and finance worlds were not of course unanimous about wanting to stay but most companies, including most SMEs, seemed to see the advantages of full access to the single market, without complications for today’s very complex cross-border supply chains; of being part of a wider group which could help to set global standards; of not having to renegotiate our trade agreements with the rest of the world; and of not having a prolonged period of turbulence and uncertainty.

However, the case for free trade and investment was not without its complications. Those who gained nothing from globalisation, including a lot of UKIP supporters, and those who saw it as a capitalist conspiracy, such as the vocal opponents of deals like the Transatlantic Trade and Investment Partnership (TTIP), would not be impressed by such arguments. Moreover the “leave” camp would certainly play up the view that too much regulation was bad for business and that most regulation came from the EU. The “stay” campaign would need to develop its own arguments about the benefits of single European regulations over 28 separate ones, and the reality that national regulations could be just as bad if not worse for business. SMEs might well be more influential advocates in all this than big companies.

Was there a possibility, as some had been suggesting, that there could be a second referendum once the terms of leaving had been negotiated? We saw little chance of anything along these lines being a political runner. It would certainly be unwise for anyone on either side of the argument to cling to this possibility.

Overall we saw the main arguments for the “leave camp” as lying in the following areas:-

  • migration – regain full control of our borders
  • sovereignty and democracy – more control in setting our own rules and regulations (with less regulation overall)
  • money – our net contribution to the EU budget (£9 – £10 billion p.a.) could be better spent elsewhere
  • trade – better deals with e.g. China
  • agility – we would be more flexible and fast-acting on our own
  • the eurozone “mess”
  • we are marginal in the EU already, so might as well leave

For the “stay” camp we saw the following as key points:-

  • better, safer and more prosperous together
  • loss of some access to the single market and inability to influence its further development if we left
  • diminished voice in the world if we left
  • poorer trade deals if we left
  • less FDI if we left
  • no good alternative to EU membership
  • pocket-book issues (roaming, low-cost travel, consumer protection)
  • loss of EU research funding and students
  • nightmare and opportunity cost of unpicking UK membership after 40 years
  • problems for UK citizens in the EU

Conclusion

Our remit was not to decide whether or not the UK should stay in the EU, and the composition of our group was in any case too one-sided to allow for a balanced debate. It is probably fair to say that the non-Europeans and the non-British Europeans in the room went away still wondering why the UK would want to leave the EU, given all the disadvantages and uncertainties which surround such a choice. But they were also left in no doubt that the referendum will be a tough and emotional affair with no guaranteed outcome, and that recent polling may not be much of a guide to how people vote in the end. There is a huge amount at stake for the UK, the rest of the EU, and the rest of the world. One participant was determinedly optimistic about Britain’s future, in or out of the EU.  Others stressed that the UK would still be there after the referendum, and important in the world, whatever the result. Many people stressed that a clear result either way would be better than a narrow victory for either side, which would leave the arguments largely unsettled. We shall see.

This Note reflects the Director’s personal impressions of the conference. No participant is in any way committed to its content or expression.

CHAIR: The Rt Hon. Baroness Ashton of Upholland GCMG 
Life Peer (non-affiliated), House of Lords (1999-). Formerly: High Representative of the European Union for Foreign Affairs and Security Policy and Vice-President of the Commission (2009-14); European Commissioner for Trade (2008-09); Leader of the House of Lords and Lord President of the Queen's Privy Council; Parliamentary Under-Secretary of State, Department for Constitutional Affairs and Ministry of Justice; Parliamentary Under-Secretary of State, Department for Education and Skills.

CANADA

Ambassador Jeremy Kinsman 
Regent's Lecturer and Institute of Governmental Studies scholar, University of California, Berkeley (2008-); Diplomat-in-Residence, Ryerson University (2010-); Justin Trudeau Foreign Affairs Advisory Committee. Formerly: Canadian Diplomatic Service: Canadian Ambassador or High Commissioner to: Moscow, Rome, London, Brussels (EU) (1992-2006).

Mr Pierre Piché 
Senior Advisor, Power Corporation of Canada. Formerly: Vice President, Investment Strategies, Caisse de dépôt et placement du Québec (1998-2009); Vice President, SNC-Lavalin Capital, SNC-Lavalin (1995-98).

Dr Henri-Paul Rousseau 
Vice-Chairman, Power Corporation of Canada, Montreal (2009-); Vice-Chairman, Power Financial Corporation (2009-); Member, Board of Directors, Santander Bank, N.A. (2015-). Formerly, President and Chief Executive Officer, Caisse de dépôt et placement du Québec (Québec Deposit and Investment Fund) (2005-08); Chairman and Chief Executive Officer, Caisse de dépôt et placement du Québec (2002-05); President and Chief Executive Officer, Laurentian Bank of Canada (1994-2002); Vice-Chairman and President and Chief Executive Officer, Boréal Assurances Inc. (1992-94); Senior Vice-President, National Bank of Canada (1989-92).

CANADA/FRANCE

Professor Frédéric Mérand 
Director, Centre for International Studies, University of Montreal (CÉRIUM); Director, McGill University-University of Montreal European Union Centre of Excellence; Associate Professor of Political Science, University of Montreal; Visiting Professor: Toulouse, Strasbourg, Sciences Po Paris, Rome, Beijing Foreign Studies University, Toronto. Formerly: Policy Advisor, Canadian Department of Foreign Affairs and International Trade (2004-05); Fellow, Institute on Global Cooperation and Conflict (2001-03).

EUROPEAN COMMISSION/GERMANY

Professor Dr Christian Calliess 
Legal Adviser, European Political Strategy Center (EPSC), European Commission; Professor of Constitutional and European Union Law, Free University Berlin. Formerly: expert adviser on issues of constitutional and European law, German Parliament (Deutscher Bundestag); authorised proxy of the German Parliament before the German Constitutional Court (Bundesverfassungsgericht) in the ESM- and OMT-Case.

FRANCE

Her Excellency Ms Sylvie Bermann 
French Diplomatic Service (1979-): Ambassador to the United Kingdom (2014-). Formerly: Ambassador to the People's Republic of China (2011-14); Director, United Nations and International Organisations Directorate, Ministry of Foreign Affairs (MFA) (2005-11); Ambassador to the Western European Union and European Union's Political and Security Committee, Brussels (2002-05); Head, Common Foreign and Security Policy Department, Political and Security Affairs Directorate, MFA (1996-2002); Second Counsellor, French Permanent Mission to the United Nations, New York (1992-96); Head, Southeast Asia Department, MFA (1989-92); Second Counsellor, Moscow (1986-89); Director (China), Asia and Oceania Directorate (1982-86); Second Secretary, Beijing (1980-82); Vice Consul, Hong Kong (1979-80).

Mr Philippe Le Corre 
Visiting Fellow, Center on the United States and Europe, Brookings Institution, Washington, DC; Adjunct Professor, Johns Hopkins University. Formerly: Adjunct Lecturer, Sciences Po, Paris (2005-14); Research Fellow, French Institute of International and Strategic Relations (IRIS); Partner, Publicis Groupe (2007-12); Senior Adviser to the French Minister of Defense (2004-07); Fellow, Weatherhead Center for International Affairs, Harvard University (2003-04); President, Foreign Press Association in London (2001-03); London Bureau Chief, Le Point (1998-2003); Asia Correspondent, Le Point (1995-1998); China Bureau Chief, Radio France International (1988-1995).

GERMANY

His Excellency Dr Peter Ammon
German Diplomatic Service (1978-): Ambassador of Germany to the United Kingdom (2014-); to the United States of America (2011-14); State Secretary, Federal Foreign Office, Berlin (2008-11);
Ambassador to France (2007-08); Director-General for Economic Affairs, Federal Foreign Office, Berlin (2001-07). An ex-officio Governor and Member of the Council of Management, The Ditchley Foundation.

Dr Martin Heipertz 
Head, European Policy Division, Federal Ministry of Finance, Berlin (2014-). Formerly: Adviser to European Peoples' Party lead candidate, Jean-Claude Juncker (2014); Private Secretary to State Secretary, Dr Thomas Steffen, Federal Ministry of Finance, Berlin (2012-14); Deputy Private Secretary to Federal Minister of Finance, Dr Wolfgang Schäuble, German Federal Ministry of Finance, Berlin (2010-11); Senior Officer, Board of Directors, European Investment Bank, Luxembourg (2009-10); Member of Policy Planning Staff, European Affairs Unit, Federal Ministry of Defence (2008-09); Deputy Head of Economic and Fiscal Affairs Division, International Civilian Office in Kosovo (2008); Economist, European Affairs and Fiscal Policy, European Central Bank, Frankfurt (2004-08).

ITALY

Mr Franco Frattini 
President, SIOI - UNA Italy (Italian Society for International Organization - UN Association for Italy); Justice and Chamber President to the Italian Supreme Administrative Court (Conseil d'Etat); Special Advisor to the government and Prime Minister of Serbia for EU integration process (2013-); President, Italian High Court of Sport Justice (CONI). Formerly: Foreign Minister of Italy (2002-04 and 2008-11); Vice-President of the European Commission and Commissioner for Justice, Freedom and Security (2004-08).

His Excellency Mr Pasquale Terracciano 
Italian Diplomatic Service: Ambassador to the United Kingdom (2013-). Formerly: Diplomatic Adviser to the Italian Prime Minister and Prime Minister's G8 and G20 Sherpa Representative (2011-13); Chef de Cabinet of the Secretary of State for Foreign Affairs (2010-11); Ambassador to Madrid (2006-10); Head of Information and Press Office and Spokesman for the Secretary of State for Foreign Affairs (2004-06); Deputy Head of Cabinet of the Secretary of State for Foreign Affairs (2001-04); First Counsellor, Italian Permanent Representation to the Atlantic Council, Brussels (2000-01).

NETHERLANDS

Dr Luuk van Middelaar 
Weekly Europe Columnist, NRC Handelsblad, Netherlands; Professor of EU Constitutional Law, University of Leiden; Professor of EU Studies, Université Catholique de Louvain; author, 'The Passage to Europe' (Yale U.P. 2013). Formerly: Speechwriter to European Council President, Herman Van Rompuy (2010-14).

SPAIN

Ambassador Jorge Toledo 
Spanish Diplomatic Service: Director, Department of EU Affairs and G20, Office of the President of the Government of Spain (2012-). Formerly: Ambassador to Senegal (2008-11); various positions in the Ministry of Foreign Affairs relating to EU Affairs; postings: India (1991-95), Japan (1995-99).

UK

Mr Paul Adamson OBE 

Partner and Chairman, Forum Europe; Founder and Editor, E!Sharp; Visiting Professor, Policy Institute, King's College London; Senior European Policy Advisor, Covington; member, Council of Advisors, RAND Europe; Advisory Board Member: YouGov-Cambridge and the Washington European Society; Patron, UACES; Trustee, Citizenship Foundation.

The Lord Aldington 
Vice President, National Churches Trust (2008-); Chairman, 2019 Committee, New College, Oxford. Formerly: Chairman, Deutsche Bank London (2002-09); Trustee, Institute for Philanthropy (2008-14); Trustee, Royal Academy Trust (2003-13); Chairman, Stramongate Ltd (2007-11); Member, Council of the British-German Chamber of Commerce and Industry (1995-2008). A Governor and Member of the Council of Management and Business Committee and Chairman of the Finance and General Purposes Committee of The Ditchley Foundation.

Mr Roger Bootle 
Chairman, Capital Economics Ltd, London; Specialist Adviser to the House of Commons Treasury Committee; Honorary Fellow, Institute of Actuaries; Weekly Columnist, Daily Telegraph. Formerly: Group Chief Economist, HSBC; Member, Chancellor's panel of Independent Economic Advisers.

Mr Victor Chavez CBE
Chief Executive Officer, Thales UK (2011-); Board Member: EngineeringUK and techUK; Advisory Board Member, Strategy and Security Institute, University of Exeter. Formerly: Deputy Chief Executive, Thales UK (2008-11); Business Development Director, Thomson-CSF; EDS Defence Ltd.

Dr Richard Corbett MEP 

Member of the European Parliament (Labour) for Yorkshire & Humber (1999-2009, 2014-); Deputy Leader of the Labour members and Chair in the European Parliament, Labour Movement for Europe; Vice President, UK European Movement. Formerly: National Chair, Labour Movement for Europe; Advisor to European Council President, Herman Van Rompuy (2010-14).

Mr Nicholas Ferguson CBE 
Chairman, Sky plc; Chairman, Alta Advisers. Formerly: Chairman, SVG Capital plc; Chairman, Courtauld Institute of Arts; Chairman, Institute for Philanthropy. A Governor and Chairman of the Investments Sub-Committee, The Ditchley Foundation.

Sir Stephen Gomersall KCMG 
Deputy Chairman, Hitachi Europe Ltd. Formerly: Director, Hitachi Limited and Group Chairman for Europe (2004-13); HM Diplomatic Service (1970-2004): Ambassador to Japan (1999-2004); Director, International Security, Foreign and Commonwealth Office (FCO) (1998-99); Deputy Permanent Representative to the UN, New York (1994-98); Head, Security Policy Department, FCO (1990-94).

Mr Charles Grant CMG 
Co-Founder and Director, Centre for European Reform (1996-); Vice Chairman, Business for New Europe; Member, International Council, Terra Nova; Advisory Board Member: Moscow School of Political Studies; Centre for Economic and Foreign Policy Studies, Istanbul. Formerly: Board Member and Trustee, British Council (2002-08); Defence Editor and Brussels Correspondent, The Economist. Chairman of the Programme Committee, a Member of the Council of Management and a Governor, The Ditchley Foundation.

The Lord Hannay of Chiswick GCMG, CH 
Independent Member, House of Lords (2001-). Formerly: Member, EU Select Committee, House of Lords (2002-06, 2008-14); Chairman, United Nations Association of the UK (2006-10); Member, UN Secretary-General's High Level Panel on Threats, Challenges and Change (2003-04); British Government Special Representative for Cyprus (1996-2003); HM Diplomatic Service (1959-95): Permanent Representative of the UK to the UN (1990-95); Permanent Representative to the European Community (1985-90). A Governor of The Ditchley Foundation.

Mr Hugh Morris 
Deputy Chairman, Policy and Resources Committee, City of London Corporation; Sales and Marketing Director, TORI Global. Formerly: Vice President, Business Development, Financial Services UK, Genpact; CEO, Laureate Legal Services; Director, Xchanging plc; Partner, Accenture.

Mr John Peet 
Political Editor, The Economist. Formerly: Europe Editor; Business Affairs Editor; Brussels Correspondent; Executive Editor; Finance Correspondent; Washington Correspondent; Britain Correspondent.

Mr Vijay Rangarajan CMG 
Her Majesty's Diplomatic Service: Director Europe, Foreign and Commonwealth Office (FCO) (2013-). Formerly: Director for UN and Multilateral Policy; Director, Constitution Group, Cabinet Office; Head of European Defence, FCO; Deputy Head of Mission, British Embassy to Mexico.

Mr Paul Raynes 
Policy Director, EEF: The manufacturers' organisation (2015-). Formerly: Programme Director, Local Government Association; Policy Official, HM Treasury; Financial Attaché, British Embassy, Paris.

The Rt Hon. Lord Robertson of Port Ellen KT GCMG Hon FRSE PC
Special Adviser, BP plc; Chairman, BP Russian Investments Ltd; Senior Counsellor, The Cohen Group (USA); Chairman, Commission on Global Road Safety. Formerly: Deputy Chairman, TNK-BP (2006-13); Deputy Chairman, Cable and Wireless plc (2004-06); Secretary General, NATO and Chairman, North Atlantic Council (1999-2003); Secretary of State for Defence (1997-99); Shadow Secretary of State for Scotland (1992-97); Member, House of Commons (1978-99). Chairman of the Council of Management, The Ditchley Foundation.

Dr Lee Rotherham 
Variously adviser to John Major's whipless rebels, Eurosceptic MEPs, three Shadow Foreign Secretaries, the Conservative delegate to the Convention on the Future of Europe, a delegate to the Council of Europe, and a government minister; think tank gunner, e.g. Business for Britain's 'Change or Go'; Research Fellow, TaxPayers' Alliance (inc 'Bumper Books of Government Waste'); author; historian; Reservist.

Mr Raoul Ruparel 
Co-Director, Open Europe, London (2015-); Contributor, Forbes (2014-); Member, British Chamber of Commerce Economic Advisory Group (2015-). Formerly: Head of Economic Research, Open Europe, London (2011-15).

Mr Philip Stephens 
Associate Editor and Chief Political Commentator, Financial Times. Formerly: Financial Times: Economics Editor, Political Editor and Editor, UK Edition; Correspondent, Reuters, London and Brussels. A Governor and Vice-Chair of the Council of  Management, The Ditchley Foundation.

Dr Charles Tannock MEP 
Member of the European Parliament (Conservative) for London (1999-); Foreign Affairs and Human Rights Spokesman for the UK Conservative delegation; Member, Human Rights Subcommittee; Commissioner for Human Rights of the UK Conservative Party (2011-). Formerly: Conservative Party Spokesman on Financial Services (1999-2001); Councillor, Earls Court ward (1998-2000); Senior Lecturer, University College Hospital; Consultant Psychiatrist.

Sir Paul Tucker 
Fellow, Harvard Kennedy School; Visiting Fellow, Nuffield College, University of Oxford. Formerly: Bank of England (1980-2013): Deputy Governor (2009-13); Member: Monetary Policy Committee, Financial Policy Committee (Vice Chair), Prudential Regulatory Authority Board (Vice Chair), the Court of Directors. Member, steering committee, G20 Financial Stability Board (chaired its Committee on the Resolution of Cross-Border Banks); Member, Board of Directors, Bank for International Settlements; Chair, Basel Committee for Payment and Settlement Systems (2012-13). A Governor, The Ditchley Foundation.

UK/USA

Dr Fiona Hill 
Senior Fellow and Director, Center on the United States and Europe, Brookings Institution. Formerly: National Intelligence Officer for Russia and Eurasia, National Intelligence Council, Washington, DC; Senior Fellow, Foreign Policy Studies, Brookings Institution; Director of Strategic Planning, Eurasia Foundation (1999-2000); Associate Director, Strengthening Democratic Institutions Project, John F. Kennedy School of Government, Harvard University (1994-99).

USA

The Hon. John Bellinger III 
Partner, Arnold & Porter LLP, Washington, DC; Adjunct Senior Fellow in International and National Security Law, Council on Foreign Relations; Member, Secretary of State's Advisory Committee on International Law; Member, Department of Defense Legal Policy Board; Member, Permanent Court of Arbitration, The Hague. Formerly: Legal Adviser to the US Department of State, Washington, DC (2005-09); Senior Associate Counsel to the President and Legal Adviser to the National Security Council (2001-05); Counsel for National Security Matters, Criminal Division, US Department of Justice (1997-2001); Of Counsel, Senate Select Committee on Intelligence (1996); Special Assistant to the Director of Central Intelligence (1988-91). A Member of the Board of Directors, The American Ditchley Foundation.

Mr Joel Colony 
Fulbright-Schuman Award postgraduate student/MSc Candidate in Global Politics, London School of Economics and Political Science. Formerly: Foreign Policy Adviser to U.S. Senator Jeanne Shaheen (D-N.H.) (2009-15); Foreign Policy Fellowships: Capitol Leaders Negotiation Program, Harvard Law School, and Foreign Policy Fellowship Program, Woodrow Wilson International Center for Scholars.

Dr Charles Kupchan
 
Special Assistant to the President and Senior Director for European Affairs, National Security Council, The White House (2014-); Professor, International Affairs, Edmund A. Walsh School of Foreign Service and Department of Government, Georgetown University (1994-, on leave). Formerly: Senior Fellow, Council on Foreign Relations (1994-2014); Director, Mortara Center for International Studies, Georgetown University (2004-05); Director for European Affairs, National Security Council (1993-94).

Mr David R. Riemer 
Senior Fellow, Public Policy Institute, Community Advocates, Wisconsin. Formerly: Director, Wisconsin Health Project (2004-07); Budget Director, State of Wisconsin (2002-03); Director of Administration, City of Milwaukee (1996-2002 and 1988-93); Chief of Staff to Mayor John Norquist (1993-96). A member of the Advisory Council, The American Ditchley Foundation.

Mr Jeremy Shapiro 
Fellow, Project on International Order and Strategy, and Foreign Policy Program, Center on the United States and Europe, Brookings Institution. Formerly: Senior Adviser, Bureau of European and Eurasian Affairs, U.S. Department of State; Director of Research, Center on the United States and Europe, Brookings Institution; Non-Resident Senior Policy Fellow, European Council on Foreign Relations; Adjunct Professor, Security Studies Program, Georgetown University; Policy Analyst, RAND, Washington, DC.

Dr Bart Szewczyk 
Member, Policy Planning Staff, Office of the Secretary of State, U.S. Department of State (2014-). Formerly: Associate Research Scholar and Lecturer-in-Law, Columbia Law School (2012-15); Adjunct Professor, George Washington University Law School (2011-12); Senior Associate, Wilmer Cutler Picketing Hale & Dorr (2009-12); Visiting Fellow, EU Institute for Security Studies (2009); Law Clerk, International Court of Justice (2008-09); Law Clerk, U.S. Court of Appeals for the Third Circuit (2007-08).

Dr Thomas Wright 
Fellow and Director, Project on International Order and Strategy, Brookings Institution. Formerly: Executive Director of Studies, Chicago Council on Global Affairs; Lecturer, Harris School of Public Policy, University of Chicago; Senior Researcher, Princeton Project on National Security.

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