Europe could engineer a second referendum

Today is the start of Epiphany. The story of Boris, Liam and David, the three kings bearing gifts, enchants children the world over. It has been immortalised in The Epiphany by Hieronymus Bosch. In some traditions “king’s cake”, a rich, dense, typically English fruitcake, is eaten on Twelfth Night. In the British version of the tale the cake is both eaten and not eaten. Epiphany, the striking manifestation of the new, is a moment for everyone involved in the European Union debate to stop and start again as if nothing has happened.

Indeed, nothing is exactly what has happened so far, as Sir Ivan Rogers pointed out in his parting shot as Britain’s ambassador to the European Union. “I have unclasp’d to thee the book even of my secret soul”, as Shakespeare wrote in Twelfth Night. In this case, the secret soul was contained in an email in which Sir Ivan accused the government of lacking a plan. His accusation matters more than his resignation and he is right to complain about the lack of progress. In truth, the only way out of this mess is to have two deals, not one: the deal Sir Ivan failed to negotiate for David Cameron and the deal Sir Tim Barrow will now negotiate to leave the European Union.

The resignation of the British ambassador 11 months before he was due to go is an important event of the second order. But how perfectly it dramatised the boring, stuck-record nature of the European argument. For anyone reasonably disposed to the EU he was Ivan the Great. For anyone keen to leave he was Ivan the Terrible. Every event licenses the protagonist to remind us of an established view. It’s no wonder that Pavlov’s first name was Ivan. The EU referendum is becoming the original sin of British politics, from which every action of the fallen creatures can be traced. Before Twelfth Night turns into the thirteenth day all parties to this corrosive debate should pause.

If the prime minister wants to secure the unity that was her fond wish in her new year message, then she needs to give a substantive speech on her objectives for negotiation. The leading advocates on the Leave and the Remain sides need to stop dusting down the old arguments over every set of economic data. Change, for good or ill, will come glacially. The most vital epiphany of all, though, will have to come from beyond these island shores, from the leaders of the EU itself.

Imagine how different the argument would be if the EU suddenly granted the deal that Sir Ivan Rogers was unable to secure for David Cameron. The EU is far from the best of health. A single currency invented to encourage economic convergence has left no way to reduce the debts in southern Europe other than to cut spending to the bone. The scale of youth unemployment is staggering and shaming. Not surprisingly, lots of people have taken the opportunity to work elsewhere but the impeccable logic of allowing labour to follow where capital flows is not appreciated by the native populations of the host countries. The siren voices of protectionism, a danger-in-waiting rather than a solution, can already be heard and Britain’s departure will hardly help. Europe produces a quarter of global GDP but commits half of the world’s social spending. There is a storm coming.

Serious leadership in Europe would recognise this now. During the British referendum campaign it was regularly suggested, as Tim Shipman reminds us in his definitive account All Out War, that leaving the EU would be the best tactic to give Britain the greatest leverage. Boris Johnson wrote an article appearing to have had this epiphany and then had to write another withdrawing it. More than one Tory MP who argued for Leave said the same to me. They actively wanted a second referendum on terms gained by a manifest threat. Why doesn’t Angela Merkel test their resolve? If she doesn’t, and if he wins the French presidential race, François Fillon may. A reform epiphany is not out of the question in France.

There is a template on the table. Take David Cameron’s Bloomberg speech from January 23, 2013 and enact the job lot. The EU should now instigate the fiscal integration required for the 19 members of the eurozone but create secure, second-tier guarantees for the EU members who are not. There should be a bonfire of vanity projects and labour market burdens. The EU budget should be tilted towards growth and away from agriculture.

The commission should be reduced in scope and size. The EU should establish a review of everything it does on the fine European principle of subsidiarity — that power should reside at the lowest possible level. This should be accompanied by symbolic transfers of power back to national governments, as set out in the Laeken declaration in 2001. Freedom of movement should be suspended pending a thoroughgoing reform. A target date should be set for the completion of the single market in services, energy and digital. On this revised basis, of a more flexible, variegated EU, Britain should be extended the offer to continue its membership of the single market, with all its privileges.

Thus far the response from the EU to Britain’s exit has been two parts insouciant to one part cavalier. But imagine if defenders of the EU, here and elsewhere, started taking its deficiencies seriously enough to fix them. Then suppose that all the benefits of this revised EU were offered to Britain just so long as we remained a member. Simultaneous with this process, Theresa May and Sir Tim Barrow will negotiate the best exit deal they can manage. Ministers will prepare for Britain to leave the EU, as they were instructed to do last June. Then, when the two plans are ready, they will be put, as rivals, to the British people in a referendum.

There would be no justified cry of betrayal because Leave would be on the ballot paper, in the specific form of a deal. So would an alternative that provided what many of the advocates of leaving claimed to want. This would allow unrepentant Remainers to argue for an outcome that was neither a denial of the referendum result nor a fantasy. This would not be June 23 redux. It would be a new start.

The very possibility, which is not likely, is in the hands of EU leaders. The alternative, as Sir Ivan pointed out, may work well for nobody. “O time, thou must untangle this, not I. It is too hard a knot for me t’untie”.

Philip Collins is a columnist and chief leader writer for The Times. He is also the chair of the board of trustees at the independent think tank Demos.

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