Thursday, 11 January 2018

Double or quits?

We are less than two weeks into the new year but a number of very odd things have already taken place. Arch-protectionist Donald Trump is prepared to rub shoulders with the global elite in Davos whilst Steve Bannon, who promised to “go nuclear” on those opposed to Trump’s populist nationalist agenda following his White House departure, has been fired by Breitbart News. Perhaps most surprisingly of all, Nigel Farage has suggested that a second referendum on the UK’s EU membership might be necessary to resolve the Brexit question once and for all.

This comes against the backdrop of a renewed campaign against Brexit. As Farage put it, “My mind is actually changing on all this. What is for certain is that the Cleggs, the Blairs, the Adonises will never, ever, ever give up. They will go on whinging and whining and moaning all the way through this process. So maybe, just maybe, I’m reaching the point of thinking that we should have a second referendum on EU membership … I think that if we had a second referendum on EU membership we would kill it off for a generation.”

This follows the comments by Andrew Adonis, former chair of the National Infrastructure Commission, who resigned at the end of December, arguing that “good government has essentially broken down in the face of Brexit” and will now devote more time to the issue of a second referendum. Former prime minister Tony Blair took a slightly different tack with his Institute for Global Change highlighting the economic costs that are so far visible. He also made the valid point that 2017 was too early to rethink the Brexit strategy but by 2019 it will be too late. “Realistically, 2018 will be the last chance to secure a say on whether the new relationship proposed with Europe is better than the existing one.” Whatever people might think of Blair – and he is widely reviled for his role in involving the UK in unpopular conflicts in the Middle East – he remains a formidable centrist politician and it is hard to disagree with much of the IGC’s analysis (if only Blair had applied a similar level of rigour to the weapons of mass destruction question in 2003 he would have a claim as one of the greatest peacetime prime ministers).

On the question of a second referendum, my guess is that it is most unlikely. Despite calls for a second vote to give a verdict on the terms of the final EU deal, it is unlikely to happen because: (i) neither the Conservative nor Labour  parties support the idea and (ii) it is too soon to reopen the divisions created by the 2016 referendum. Add to this the fact that Theresa May and her government have invested so much time and credibility in delivering Brexit, it becomes inconceivable to think that it will be open to calling a second plebiscite.

Nonetheless, it is astonishing to hear Farage make his suggestion. In his view “the percentage that would vote to leave next time would be very much bigger than it was last time round. And we may just finish the whole thing off.” That is a very bold statement and like many of Farage’s predictions, probably not true. Although the economy has held up better than anticipated, consumers are being squeezed by the Brexit-induced decline in real wages. Moreover, with the question of NHS funding and staff shortages currently so prominent, Blair points out that “applications from EU nurses to work in the UK have fallen by 89% since the referendum” and “nearly 1 in 5 NHS doctors from the European Economic Area have made concrete plans to leave the UK.” I have also pointed to survey evidence that suggests a rising trend in people believing that voting for Brexit may have been the wrong decision (here). Any attempt to re-run the referendum would likely result in a very tight race and it is far from clear how it would pan out.

But let us suppose that in order to clear the air the government does accede to this suggestion. What should it do? First and foremost, it should introduce a minimum participation threshold. A simple in-out referendum which results in a narrow win for one side is not sufficient. In order for change to come into effect, it would have to be ratified by at least 40% of all eligible voters in the same way as the Scottish devolution referendum of 1979. Assuming the electorate is the same size as in June 2016, the Leavers would have to gain 6.8% more votes (almost 1.9 million). But even if this were to happen, the Remain voters would still argue that the 40% threshold represents a minority of the eligible electorate. Thus, an additional constraint might be that in the event Leave gains less than 50% of all eligible votes, it must secure a victory margin of at least 10 percentage points. If you want a really funky solution, perhaps we could weight votes according to age. Although this undermines the principle of one person-one vote, on the basis that younger voters have more to lose there is an argument that their votes should count for more[1].

I stress that this is all hypothetical. But if the government were to take up Farage’s suggestion it would be easy enough to put in place a system which makes it very difficult for the leavers to win. There would be howls of protest from Brexiteers that the rules of the game have changed. But if the decision is to be binding (and let us recall that the 2016 referendum was purely advisory) we would have to be damn sure that the case is watertight. Only then will we Remainers shut up.



[1] On the basis of a voting system which raises the voting weight the further below the age of 90 you are, a back-of-the-envelope calculation suggests that Remain would have won the June 2016 referendum by a margin of 52.8% to 47.2%.

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