The UK’s referendum campaign has now reached the half way stage – two months from the starting gun in February, two more months till voting day on 23 June – and the pattern of the campaign has become clear. As in the Scottish referendum in 2014, almost all of the debate has focused on the consequences of leaving the EU, and the Leave campaign, or Brexiteers, have made most of the running so far.
This is not altogether surprising, as a vote to leave will mean a much bigger change for the UK than a vote to stay. And, again like in the Scottish referendum, the two camps have adopted predictable poses. The Brexiteers hold out the promise of a liberated future, free from the tyranny of a distant and unaccountable power, while those who wish to remain in the EU point to the dire economic consequences of a leap into the unknown.
Meanwhile the public has mostly responded by repeatedly calling for “the facts”. This is understandable, but alas futile: there are no facts. No country has ever left the EU before – the departure of Greenland from the European Community in 1985, and before that the departure of Algeria from the EEC in 1962 upon its independence from France, are not remotely comparable events. Nobody knows how the exit procedure will work, or what relationship with the EU an exiting UK would be able to establish. So the public’s entirely rational hunger for “the facts” will not be satisfied. To repeat, there are no facts.
Instead what we have seen, and will continue to see, are a variety of opinions. On the Remain side, the UK Treasury has offered a comprehensive assessment of the possible outcomes: they range from mildly negative to rather more substantially so, but (as the Leave side were quick to observe) all of them are predictions, none comes with a guarantee. The IMF have also produced a similar downbeat review, the previous head of the World Trade Organisation has offered his personal opinion on the very limited chances of a good outcome, and a large number of foreign statesmen have urged to UK to be realistic about life outside the EU, culminating in President Obama’s uncharacteristically blunt warnings at the end of last week that the UK could not expect favourable treatment from the US if it left. But they are all opinions – from experienced people and bodies maybe, but opinions not facts.
To all of these the Brexiteers offer one of just two responses: either they try to deny that the speaker knows what he is talking about, or they try to deny his right to speak at all. This is the political equivalent of students trying to “no-platform” speakers whose views they disagree with. And while this might cheer those who already agree with them, it is about as unconstructive and ineffective at persuading others to their cause.
When the Leave camp do try to put their own case, their problems quickly become apparent. If the claims of the Remain side are not facts but opinions and predictions, those of the Brexiteers are little more than heroic hopes and platitudinous promises. Any attempt to analyse their statements quickly either becomes futile (there is nothing behind the claims) or farcical (as when Michael Gove held out the exciting prospect of “a trading relationship like the one Albania and Belarus have with the EU”).
The Brexit camp appear to live in a world where trade deals are easy to do, where other nations have Britain’s concerns at heart and will be happy to sacrifice their own national interest to the UK’s, and where “they will have to deal with us, because we are the fifth largest economy in the world”. Fifth largest economy the UK may be, but it still represents just 3% of world GDP, and less than 1% of the world’s population. This is not exactly a powerful negotiating position – to more than 99% of the people in the world, the UK is just another foreign country, and not a very big one at that – and anyway there is no “have to” in deals between sovereign states.
What is the average voter to do, faced with such a campaign? In situations like this, where the future is not only unknown but unknowable, the best approach is what economists call scenario analysis. You look at all the outcomes that might happen (however unlikely you think they are) and see what the consequences might be. Indeed, the best approach in a one-off and irreversible decision such as the Referendum is a subset of scenario analysis known as survival analysis: you look at all the possible downsides and check whether you can survive the worst that fate can throw at you.
This is a very powerful technique because once you have checked all the downsides of a given decision, and have concluded that you can handle them, then you can start to examine the possible upsides – the benefits from that decision if all goes well. But if you conclude that you cannot handle them, or would rather not run the risk, the upsides become irrelevant to your decision process.
In the case of the Referendum decision, the maximum downside of voting to stay in is that the UK will have a second-tier membership of what many consider is a slowly failing institution. Nobody quite knows how the new membership deal that David Cameron negotiated will work, but it preserves two crucial things: the UK’s membership of the single market, and the UK’s right to withdraw at a later stage (a right the UK always has, but can only use once) if the EU crisis becomes existential. That would seem a survivable scenario, not least because the option to exit is preserved. In the words of Boris Johnson, this really is “pro having cake, and pro eating it” – membership, with the right to leave.
But the maximum downside of leaving is less comfortable. Leaving will be irreversible: the EU would never countenance an application to rejoin. The option would have been used, and the UK would have to accept the consequences. And those consequences, despite the promises of the Brexit camp, are not under the UK’s control and may not be benign.
It is possible that the EU will prove a hard negotiator and that a trade deal is not forthcoming: not only have the UK’s partners said as much (Germany has specifically warned that it will “have a duty to our own people to negotiate hard”), but it is both the natural reaction of the spurned party in a divorce, as well as the logical policy for the EU, keen as they will be to discourage other states from following the UK’s example.
It is possible that President Obama, after 7 years in the White House, understands how the US and especially its Congress will view calls for a trade deal with the UK, and is right when he warns that it will not happen.
It is possible that other countries with financial services industries, far from seeking to facilitate London’s continuance as the world’s chief financial centre, will seek to supplant it – indeed we know the EU is already very unhappy about the extent of euro business that is conducted in London and outside the Eurozone, and will not tolerate it if London is also outside the EU itself.
All of these are possible. Indeed, to see the likely reaction of the EU, in particular, English voters need only look back at their own thoughts just two years ago when it looked as if Scotland might vote to secede from the UK. “You may go”, they said “but if you go, you go. No half membership, no favours, you’ll be on your own”. What makes the Brexiteers think the Europeans will react differently?
And note that it is not enough for the Brexiteers to say that these downbeat outcomes are not likely – as long as they are possible, in a survival analysis they must be considered.
Firing the bullet in a game of Russian Roulette may not be very likely, but it is possible, and the outcome is (literally) not survivable. The Leave campaign is asking the British people to play Russian Roulette with their country’s economic future: the upside, and the promises, may sound attractive, but many will ask whether they come at too high a risk.