Sunday 1 May 2016

Project Fear 2

What would happen if the UK voted to leave the EU? All sorts of claims and counter claims are made about this. But the answer in the end is that we just don’t know. The future is uncertain and undetermined, because it hasn’t happened yet. What we do know however, is that political claims about the future are always influenced by the desire to influence voters. One party says that there will be something approaching heaven on earth if they win. The other party says there will instead be disaster and catastrophe. But neither of these claims has much to do with truth.

Negative campaigning works. If it didn’t work no one would use it. I used to love negative campaigning. During the Scottish independence referendum I was overjoyed whenever someone in the Better Together team described some new disaster that would happen if Scotland voted for independence. When George Osborne explained that Scotland would definitely not get to keep the pound after leaving the UK, I thought it was a masterstroke. Surely now support for independence will dwindle to almost nothing.

Every few weeks some experts would publish a detailed report designed primarily to scare Scottish voters into voting to stay in the UK. No doubt these experts believed what they were writing was true. But they also had a brief to fulfil for which they were amply rewarded. But did these reports diminish support for independence? Perhaps they did. Some people who might have voted for independence were too scared to do so. Negative campaigning works. But it only works in the short term.

Scotland used to be a place where support for independence was a minority pursuit. Around one quarter of Scots wanted independence. That figure had stayed more or less fixed for decades. What turned 25% into 45%? Project Fear did that. Nothing else. So negative campaigning works. It works so well indeed that it has turned Scotland from being a place where the overwhelming majority used to support the UK, into a place where the majority will vote habitually for a party that supports independence. Long term this isn’t a success. It’s a disaster.

At the moment we may be able to keep Scotland in the UK because of the economics. But this support is contingent and to an extent reluctant. If for whatever reason it were economically advantageous for Scotland to leave the UK, what is the likelihood that we would vote to remain? Yet Pro UK people still think that ever more negative campaigning is a great idea. If we have any more great ideas like this, we may as well forget about the long term future of the UK.

In any political debate you are allowed to counter your opponent if you think he says something that is untrue, over-optimistic or unlikely. The Scottish nationalists made claims about the future of an independent Scotland that have turned out to be false. But has this harmed them? We all still gleefully point out that Mr Salmond got his sums wrong? We show that if Scotland had voted for independence, we all would have been much poorer, that taxes would have risen and public spending would have fallen. We do this because we think it will harm the SNP? Has it? Is there any sign that support for the SNP has fallen or will fall in the near future?

It doesn’t matter that the SNP got their sums wrong. No-one expects people to be able to predict the future. What matters is that they tell a hopeful story and that the story they tell is one that a majority of Scots at the moment like. That’s why they are winning.

If Scotland became independent tomorrow, how we’d end up 20 or 100 years from now would depend on the decisions that were taken. Becoming independent, no doubt, would involve some tough times and some hard choices, but this is quite normal when countries become independent. But that isn’t a reason why you can’t tell an optimistic story about it. The Republic of Ireland fought a civil war, found their country partitioned and went through decades of poverty. But they still think it was worth it. Compared to that independence for Scotland would be easy. So you still think scare stories are the answer? Project Fear, in fact, is the equivalent of Easter 1916. Shooting people, no doubt scares their friends. What a great idea. How long did Ireland remain a part of the UK after that?  Short term Project Fear wins. Long term it loses.

What would have happened if Scotland had voted for independence in 2014? There would have been some short term market chaos. Then our lives would then have gone on more or less as normal. There would have been some negotiations. Everything that had been said in the campaign would have been forgotten. Both sides would have tried to find a way of fulfilling the wishes of people in Scotland and the other parts of the UK. Democrats respect the result of a referendum. What would have been the end result?

My guess is that we would have ended up with something remarkably similar to what we have now. Central bankers would have pointed out that it would be economically problematic to break up the poundzone. Any other option apart from sharing the pound would have been very bad news for Scotland, but also for the UK. After all Greece leaving the Eurozone would not only harm Greece, it would also harm Germany in ways that we perhaps cannot guess. Scotland would therefore have kept the pound.

The UK however, would have pointed out that monetary union with the fiscal transfers necessary to make it work implies some form of political union. We would therefore have ended up with a sort of federal structure. The UK would have been loosened, but not dissolved. Scotland could claim independence, but there would be many areas of shared government. In the same way that Greece can be independent, but part of the European Union, so Scotland would have ended up being independent, but part of a union (the UK) that would not so much be approaching political union as already being just that. The result in fact would be very similar to what we have at the moment.  So long as Scotland wants to be part of a currency union with other parts of the UK, we must accept that the goal of independence is limited. We are always going to be in a political union with those with whom we wish to share a currency. Once you accept this, then the debate becomes largely sterile.

If Scotland had voted for independence everyone would have done their best to avert whatever Project Fear said would happen. The economy of the UK would be damaged by horrible things happening in Scotland, so out of self-interest politicians and economists would have done their best to accommodate the wishes of people in Scotland and reconcile them with the wishes of everyone else. Forget the fall in the price of oil. It matters not at all. Currency union would have continued and so would fiscal transfers. The condition for this is that Scotland would have been ‘independent’ within the UK. Sorry nationalist friends, but this is what your goal of independence looks like. So much energy expended in Scotland over precisely nothing.

What then would happen if the UK voted to leave the EU? Would the disasters predicted by Project Fear II happen? They might. But the EU more likely would try to come up with an accommodation which suited both the EU and the UK. The alternative would damage everyone. Imagine if both the EU and the USA decided to take revenge on the UK. Imagine if they created all the disasters that Project Fear II so gleefully predicts. If the UK became something of a failed state, not trading with anyone at all, living in awful poverty, would this help or harm the world economy? The Pro EU side depends on the idea that the rest of the world would prefer to damage the UK rather than cooperate with our wishes.  The fall of one American bank was enough to plunge the world into depression, but wrecking the fifth largest economy in the world would, no doubt, have no effect whatsoever on the wealth of people in other countries.  

It is perfectly possible for both Scotland to be independent and for the UK to leave the EU. There are lots of European states that are both independent and not in the EU. Many of them are successful. Given that it is possible for Iceland to be independent and not in the EU, the idea that it would be some sort of catastrophe for the UK to be in that position becomes faintly silly. There might be some difficulties to be overcome, but we have a long history of overcoming difficulties.

I don’t want to be negative about Scotland ever again. Independence is possible. There might be some tough times, but if you think it would be worth it, by all means support that position. I disagree with Scottish independence, because I see the UK as my country in the same way an American sees the USA as his country. That’s it. There’s no need to argue with a New Yorker about New York independence, because he has a positive story to tell about the USA. The UK is a great country, with a long history and a people who have done marvels. If you reject that, then it’s you that’s being negative not me.

Project Fear II is fundamentally insulting to Britain. It is to suppose that we couldn’t survive outside the EU. This is quite simply false. We survived for centuries before the EU even came into existence. We could do so again. There might be challenges, but we’d meet them. Pro EU people are fundamentally arguing that what Iceland can do successfully we cannot.

In many EU countries there is no need to argue in favour of remaining. Greeks are still enthusiastic members of the EU. If they weren’t they would have left already. The reason for this is that they think being part of the EU guarantees their place in Europe rather than in Turkey. For Poles and other Eastern Europeans being in the EU is a sort of guarantee that they won’t revert to being part of the Warsaw Pact. For Spain and Portugal the EU guarantees that they won’t return to tyranny. But few Brits have any great feeling for the EU. Few indeed feel particularly European. There is no common European identity, for the simple reason that few of us know a word of Slovenian or Hungarian and our knowledge of the history and culture of such countries is practically speaking non-existent.

It is the failure of Pro EU people to come up with a positive story about the EU that means they have to resort to ever more unlikely scare stories. This may well win in the short term, but long term it loses. The EU may well keep the UK as a reluctant member, but this neither helps the EU nor does it help Britain. The Eurozone has to move much closer together or else fall apart.  They are on a different path to us. The UK can only hinder further EU integration, because our interests differ from theirs. It makes much more sense for non-Schengen, non-Euro countries to have a relationship to the EU that reflects this reality.  It may be that it is a condition for the possibility of long term healthy EU survival that the UK votes to leave. Being Pro EU may mean voting for the UK to let them get on with it. 

Remember when the Greeks had a referendum last year. They were threatened with Armageddon if they dared to say No. They were told that they’d be kicked out of the EU and out of the Euro. Did any of these scare stories come true? Not one.  Only when they actually voted No did the negotiations even begin. It would be the same here. If we vote to leave the EU, everyone would try to accommodate our decision in the way that would be most beneficial for everyone concerned. No-one is going to cast Britain into the wilderness, for we are all interconnected and to seriously damage the UK economy is to seriously damage the world economy.

Project Fear II may win, but it is a double edged sword. It may damage the case for leaving the EU in the short term, but long term it damages the case for remain. Discontent about the EU will only increase. If the UK electorate comes to feel that it has been conned by scare stories, it’s hardly likely that it will embrace the EU with hearty singing of the ‘Ode to Joy’.

Being negative about Britain leaving the EU still feels great for an awful lot of Pro EU people. Many of them likewise still think that being negative about Scotland leaving the UK is working just brilliantly. When the SNP wins all the seats the triumph of Project Fear will be clear to all.  If you really care about the EU start telling me about how brilliant the EU is. The fact that you can’t is itself a reason why we should vote to leave.