Brexit - define the moment before it defines us


Picture of Sir Philip Lowe
Sir Philip Lowe

Partner at Oxera, former European Commission director-general for competition and energy, and Trustee of Friends of Europe

The result of the UK’s referendum on 23rd June requires some readjustment and rethinking of policies both in the UK and in the EU. There is no need to read anything calamitous or cataclysmic into the impending split, but cool heads are required. After all, the UK and its 27 soon-to-be former partners in the EU are close neighbours who share the same values and aspirations as well as fundamental economic and political interests. It would be disastrous if the present differences were transformed by ignorance and prejudice into animosity, hatred and racism. Surely people all over Europe realise that.

The vote in the UK was not about EU reform, but about whether the UK could best defend and promote its interests as a member country of the EU or outside it. It asked people to take a view on a country’s ability to really decide things on its own or if, in an increasingly globalised world, cooperation and concerted action with other countries is inevitable and will necessarily involve giving up a degree of sovereignty. On the whole, the less powerful or influential you are than those you are dealing with, the more sovereignty you are likely to have to give up to them. Covering areas such as trade, investment and migration, this question of sovereignty is complex and not well suited to a binary referendum vote. A vote in the UK was also bound to be influenced by decades of criticism of the EU which went uncontested, if not encouraged, by successive UK governments – that criticism often not true.

The UK will have to beef up its own administration in order to take back regulatory control

In the end, a majority of voters wanted to ‘take back control’ of their country. Their decision to leave the EU now needs to be implemented. Arguably, this result is better than perpetuating a semi-detached and passive-aggressive attitude of the UK inside the EU.

A new UK government needs to demonstrate to the electorate that the ‘Leave’ option will allow the UK to promote its economic and political interests with better results than possible within the EU, especially on immigration, regulation, trade and employment. Voters will give the new government some benefit of the doubt, as the decisions to be taken will clearly be those of UK institutions alone. But the government will have to meet the expectations the Brexit campaign has built up.

Negotiating a new relationship with the EU will also be tough. If you are in a club, you accept the rules in exchange for the benefits. Whether the final result is Canada+ or Norway+ remains to be seen, but there is no point dreaming about a trade deal that is equivalent to the existing single market arrangements without corresponding obligations. Reducing regulation is also no pushover. The UK has been a front-runner in establishing high health, safety and environmental standards, and there will be no great rush to remove EU regulation from national law in these fields. On the contrary, the UK will have to beef up its own administration in order to take back regulatory control from the Commission and other EU agencies. This is going to cost money. And protecting people from globalisation usually means more protection and less open and competitive markets. You can’t argue for both at the same time.

On the other side, the UK referendum result has only emphasised the urgency for the EU to restore its own self-confidence and start working again for Europe, as it has done so effectively in many areas but particularly on the single market, and in helping Eastern European and Balkan countries to establish their democracies and integrate into the wider European economy. In the Commission, it also has an administration which is as efficient, dynamic and flexible as any other in the world. Its current major initiative to reduce unnecessary EU regulation only confirms this.

For populist and nationalist parties, successful multilateralism is bad news; and the EU is the most dangerous animal of all because when it is shows that countries acting together achieve better results than acting alone, it provides a benchmark of performance that populism and nationalism can never meet. That’s why so much of their time is spent trying to prove that the EU is not a success, or alternatively that it is a superstate that is trying to smother people. EU leaders need to stop believing this propaganda, consolidate the progress already made in many areas and tackle the newer problems on which people feel Europe has so far not delivered.

European electorates have shown that they feel remote from EU institutions, they don’t understand how they work and they don’t feel themselves sufficiently represented

A first challenge is to build a coherent policy on immigration, involving effective control of EU external frontiers, humane treatment of asylum-seekers, strong support for economic development in countries of origin, clear conditions for acceptance of non-EU migrants, and a set of rules for intra-EU migrants which safeguards their rights while ensuring that flows do not cause, and are not perceived to cause, excessive pressure on social security budgets and services.

The second is a renewed commitment to a positive agenda for jobs and growth. It makes obvious sense to continue to reap the benefits, for consumers and for businesses, of a competitive European-wide market, in services, the digital economy and in energy. At the same time, overly strict adherence to austerity and balanced budgets in economic policy is neither popular nor effective. There should be some flexibility to allow for investment in new infrastructures (for example in energy, the digital economy, and in transport) to go ahead, with appropriate support from the EU budget. This will help stimulate jobs, growth and competitiveness. In parallel, completion of the work already started on the economic and monetary union of the eurozone will underpin progress on the wider economic agenda.

Thirdly, democratic reform. The European Parliament has a major role in holding the Commission to account for what it does and doesn’t do. But that is not enough. Over and over again, European electorates have shown that they feel remote from EU institutions, they don’t understand how they work and they don’t feel themselves sufficiently represented by their MEPs. They have more trust in national governments and parliaments. Yet decisions taken by the Council of Ministers are not perceived as being the collective decisions of everyone’s national ministers. The ‘EU’ and/or ‘Brussels’ is frequently held responsible, whoever ‘they’ are. Surely democratic control over EU decisions will only be effective when national parliaments have some real powers to block proposals or to insist on positive action in specific areas . And this requires close cooperation between the European Parliament and national parliaments. All this may mean treaties need to be changed, but so be it. There is no alternative.

A confident and determined EU that has this positive agenda will be a reliable partner for the UK. A realistic but confident UK can also work successfully together with the EU and share a common agenda with it in many areas. Perhaps their paths will converge again one day.

Track title


Stop playback
Video title


Africa initiative logo