Brexit: Threat of a 'yes' vote is now very real

Exit Sign

The overriding issue for Britons in the EU vote debate is sovereignty. Is Parliament still sovereign, or is it Brussels and its sizable bureaucracy?

Immediately after the U.K.'s General Election in May, when an In-Out referendum on the U.K. staying in the European Union (EU) was confirmed, I felt that fears of Britain going it alone – a so-called "Brexit" – were overblown. But now it's time to revise that opinion and wake up to the very real threat of the U.K. leaving the EU. It is now too close to call.

Only 12.8 percent of the electorate voted for parties running on a Euroskeptic ticket in May. Or rather, one party: the U.K. Independence Party (UKIP). Doubtless there was a large portion of the 37 percent of the electorate that voted for the Conservative party which also have strong Euroskeptic opinions – the Tories have always been divided on Europe - but that was still a long way short of a majority, with all of the opposition Labour, Liberal Democrats, SNP and Green parties presenting a united pro-Europe front.

That, accompanied with the belief that Prime Minister David Cameron would secure more in his renegotiation than expected, raised expectations that the U.K. would vote to stay in the EU.

But what a difference a few months have made: A YouGov poll on 28th September put the Brexit vote ahead with 40 percent of Britons wanting to leave the EU, compared to 38 percent who wanted to remain.

Two crises this summer – one in Greece and the other concerning thousands of migrants arriving in Europe -- have increased anti-EU sentiment in the U.K. And it is the former rather than the latter that explains the change in sentiment.

In the two interviews I have had with UKIP leader Nigel Farage, he gives the impression of being a straight-talking, honest politician: Something that has proved very refreshing to a significant section of the electorate. However, UKIP are doing themselves no favors by playing so heavily on the refugee crisis and linking it to the EU referendum.

The crisis in Greece itself is also not the man issue on U.K. voters' minds, but rather how Athens was treated by Germany and the rest of the euro zone that has struck home. The negotiations painted the EU and its biggest economic power as controlling and unforgiving. The protracted nature and brinkmanship of the Greece crisis also suggest that David Cameron may have his work cut out in his renegotiation – even though the U.K.'s situation is very different.

The overriding issue for Britons in the EU referendum debate is sovereignty. Is Parliament still sovereign, or is it Brussels and its sizeable bureaucracy? It has been a long-running complaint in Britain that too much power has flowed towards Brussels. U.K. Chancellor George Osborne tried to capture that sentiment when he said in his Mansion House address in June, and again last week at the Conservative party conference in Manchester, that Europe needs to remember that Britain joined the Single Market, not the Single Currency. And that the EU needs to be run for all of its 28 members, not just the 19 members of the euro.

Nonetheless at the heart of the sovereignty question will be the level of renegotiation of EU membership that David Cameron secures. The debate up until that point therefore is somewhat futile.

I also feel that the growing prominence of economic arguments are unlikely to sway voters, largely because fear of an economic collapse on leaving the EU are overdone. For example - would David Cameron have imposed tariffs on Scotland had it voted for independence last year? Of course not. Likewise, will Germany and France refuse to trade with the UK if we leave the EU? Of course not. You only have to look at the free trade deals that the likes of Denmark and Switzerland have with the EU to feel confident that the UK will always trade freely with Europe.

On top of that, the majority of the UK's European trading partners have surpluses with the UK, making a decision not to trade with the UK even less likely. Leaving the EU would unquestionably bring short-term uncertainty, and with it probably some weakness in markets, but in the long-term the economic impact will be minimal - in both directions. Thus the establishment of various lobby groups headed by business leaders such as Lord Rose and Lord Lawson is pointless - they cannot argue on the sovereignty point which is what voters care about the most.

What has become clear this summer is how much of a cross-party issue this is. A lot of people may have voted for pro-European parties in the General Election, but may vote differently in an EU referendum (another reason why the way UKIP plays the issue on party grounds is a mistake).

So forget the arguments on economics, refugees and party politics: This all comes down to a question of sovereignty. A question that will depend heavily on how effective Mr Cameron is on his in front of his German and French counterparts in the months ahead. Good luck, Viel Glueck, Bonne Chance.....to all.

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