A triple-option EU referendum is the most logical, though unlikely, solution

David Cameron is due to make his long-awaited speech on the future of the UK’s relationship with the EU later today. This was of course expected to be given last Friday but was cancelled owing to the hostage crisis in Algeria.

There are four main approaches the prime minister could in theory adopt, whose respective advantages and disadvantages I discuss below:

1. Judging from the numerous pre-speech hints and briefings both last week and this, the option Cameron appears to be going for is to use the fiscal union of the eurozone countries, which will possibly require amendments to the Lisbon Treaty, as an opportunity to renegotiate Britain’s relationship with the EU following a Conservative victory in the 2015 general election. The negotiation will aim to achieve the repatriation of certain powers, and the deal will be put to the electorate in what is being billed as an in / out referendum some time around, say, 2018. In other words, if the new relationship with the EU is rejected by voters, the UK will leave the EU.

Cameron’s intention here is clearly to transform the EU from an issue that could damage him and the Conservatives in the 2015 general election to one that could help him: ‘vote Conservative and you’ll get an in / out referendum’. In particular, he will argue there is no need for disaffected Tories to vote UKIP, as he has responded to their concerns by agreeing to renegotiate some of the key terms of the UK’s EU membership; and if they don’t like what’s on offer after the negotiations, they can vote to leave the EU in the referendum. Equally, Cameron hopes this will put an end to the squabbling in his own party on the issue so that it does not harm the party in 2015.

If, however, it is Labour that forms the next government – whether on its own or in coalition with the Lib Dems – they will almost certainly offer neither negotiations on a new deal nor an in / out referendum. This would let Mr Cameron off the hook, in fact, as he may in reality not be too keen on making significant changes to the UK’s relationship with the EU. If, on the other hand, Cameron does win a majority in 2015, he will then be in position to come up with only a relatively minor readjustment of the UK’s terms of EU membership and would probably succeed in obtaining the electorate’s consent for it in a referendum.

The problem with this strategy, if I’ve read it right, is that it makes Mr Cameron a hostage to fortune while also running the risk that the Europe issue will rumble on unresolved for years to come. For a start, it’s far from obvious that a commitment to renegotiate if the Conservatives are voted in to power in 2015 would neutralise the UKIP threat or satisfy the Tory eurosceptics. Recent polling, for example, suggests that the EU is only the fifth-most important issue for potential UKIP voters, behind the economy, immigration, unemployment and crime. Many Tory backbenchers and activists are also likely to be unhappy with what they would see as merely a vague promise to renegotiate the UK’s position.

And that is always supposing that the EU and its member states would be willing to enter negotiations on a looser relationship with the UK in the first place. This is far from clear. After all, they’ve got a eurozone crisis and fiscal union to be getting on with; and just because the UK doesn’t want to press ahead with ever closer union, that doesn’t mean the rest of Europe should entertain the UK’s demands to re-write Lisbon and loosen its ties with the EU. On top of which, there is in fact no provision within the Treaty of European Union for renegotiating a state’s membership of it. On the contrary, a state has to declare an intention to leave the EU altogether before negotiations can begin on what the new relationship between that state and the EU might be. As Article 50 of the Treaty – as consolidated within the Lisbon Treaty – states:

“A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union.”

Indeed, at the time that the Lisbon Treaty was signed by the UK, in 2010, the fact that there is no agreed mechanism for an individual country to renegotiate its terms was given by the Conservative and Liberal Democratic Parties as a reason why they would not be offering a referendum on it at the 2010 election. And this is also why both parties said they would offer a referendum on the EU only when further powers were transferred from the UK to the EU (i.e. not the case with the fiscal union), and duly passed such a provision into UK law. So to argue now that a renegotiation is possible without a prior intention to leave the EU having been expressed by the UK government is at best inconsistent, at worst disingenuous.

In other words, this option is all about politics: Cameron aims to paint himself as the champion of renegotiation, and if the other EU member states are unwilling to enter into negotiations, he can make out that the lack of progress is down to their intransigeance rather than his own unreasonableness. Cameron can always threaten the UK’s EU partners that snubbing the UK on renegotiation will only intensify demands for the UK to quit the EU altogether. But to be honest, our EU partners are more likely to call Cameron’s bluff – supposing he’s still in power at that point, that is. With Prime Minister Miliband in No. 10, there’ll be no bluff to call.

So this whole scenario has huge potential to unravel horribly: if it doesn’t satisfy potential UKIP voters or Tory eurosceptics; if the Tories lose the next election; and if the EU is unwilling to play ball.

2.    So what if, as some have suggested, the UK holds a referendum to obtain a mandate for renegotiation before kicking off the negotiations? This option involves two referendums: one at the beginning of the process and one at the end to ratify the deal.

The most obvious problem with this suggestion is that you might not actually get a mandate via the initial referendum, i.e. the renegotiation option would be rejected by the electorate. In addition, the ‘no’ verdict would be ambiguous, in that ‘no’ voters would be made up of both supporters of the status quo and supporters of the UK’s exit from the EU. In addition, even if the ‘yes’ side did win the mandate referendum, this solution would be subject to the same uncertainties and ambiguities of option 1 discussed above: would it satisfy potential UKIP voters and Tory eurosceptics? Would the EU play along and agree to negotiate? Would an incoming Labour government reduce the scope of any renegotiation? And would the British people endorse any agreement that was reached in a second referendum?

There are too many uncertainties with this option; and whether renegotiation was approved or rejected in a mandate referendum, nothing would be settled for several years to come on the big question of whether the UK should remain a member of the EU or not.

3.    So why not just get this question settled once and for all via an in / out referendum held as soon as possible, preferably ahead of the next general election? This might at least provide the UK government with the real mandate it requires to go to the EU and begin negotiations, as set out in the Treaty of European Union, discussed above.

A straightforward in / out referendum is the preferred option of those opposed to the UK’s EU membership, including UKIP. Many of them are clearly confident the ‘No2EU’ cause would win out in such a referendum, but I’m not so sure. As YouGov’s Peter Kellner pointed out last week, precedent would tend to suggest that the status quo would in fact win, even if the ‘no’ camp were ahead in the polls at the start of the campaign. And if a majority did vote for the UK to remain in the EU, that wouldn’t really settle the matter either, because there would be a sizeable section of the population that still wanted the UK to negotiate a looser relationship with the EU while remaining a member state.

If, on the other hand, the ‘out’ camp did win an in / out referendum, then negotiations for the ‘Brexit’ (British exit) could begin. What would probably happen then, in my view, is that the European Commission and our fellow-EU member states would scurry around in a state of panic, and would offer a series of substantive concessions allowing the UK government to achieve most of its policy objectives while remaining within the EU. This could include withdrawal from the Social Chapter and the repatriation of powers relating to freedom of movement (i.e. the ability to restrict immigration from EU countries), justice and policing, employment law, welfare benefits, and a host of economic, regulatory and environmental legislation.

Even if the eventual deal did involve a Brexit, the form this would take would probably not be very different from a package allowing the UK to remain in the EU but with more independence in the areas I have just referred to. In essence, both would be a form of associate membership or affiliation, allowing the UK to access the Single Market but without entering into the full political project of the EU, which is viewed by many as tending towards establishing a federal European super-state. Whatever deal was reached through negotiation, this would be put to the British people in a referendum.

This is not a bad outcome; but, as I say, it is dependent on the anti-EU side of the argument winning an in / out referendum, which is far from certain. In addition, if Labour did win the 2015 election, an incoming Labour government would almost certainly wish to negotiate a less radical separation from the EU, which would probably involve remaining in the EU and retaining the Social Chapter along with many other elements of the status quo. A Labour government would be honour-bound to offer a second referendum on whatever deal emerged, and it would probably win such a referendum, for the reasons discussed above: when push comes to shove, the British people are more likely to back the status quo, especially if some concessions have been made and a limited number of powers have been repatriated.

So even an in / out referendum now probably wouldn’t settle matters. And there’s another, unspoken, reason why the British government is reluctant to offer the public an in / out referendum now: its possible impact on the Scottish-independence referendum in 2014. First, there’s the obvious point that if the Scottish people were to vote for independence, it would no longer be the UK government that would be negotiating on its terms of EU membership but the governments of two ‘new’ states. The rump-UK state (rUK) would doubtless lay claim to being the continuity-UK and the inheritor of the present UK’s legal personality and international agreements, including membership of the EU. But regardless whether this blithe assumption is founded or not, an impending break-up of the UK would make the need for negotiations on rUK’s and Scotland’s EU status unavoidable, especially as it is generally accepted that the English are more inclined towards looser ties with the continent than the Scots.

This variation in attitudes towards the EU north and south of the Anglo-Scottish border is another reason why an in / out referendum now would be potential dynamite. Imagine a situation in which the Scots – and maybe the Welsh and Northern Irish, too – voted to remain in the EU but the English voted to leave, swinging the overall vote in favour of the Brexit! That would really add fuel to the fire of the Scottish-independence cause, just ahead of the crucial independence referendum. The SNP would be able to tell Scottish voters that if Scotland remained part of the UK, the English would take the UK out of the EU, notwithstanding Scottish opinion in the matter.

By contrast, imagine if the margin of victory for the pro-EU cause in Scotland, Wales and Northern Ireland were large enough to tip the balance in favour of the UK remaining in the EU, against the will of the majority of English-resident voters! That would be a ‘West Lothian referendum’, in which the UK voted to remain an EU member while England voted to quit! Now wouldn’t that wake up the sleeping lion of English nationalism! Clearly, the UK government is just not going to go there, and so an in / out referendum before the Scottish referendum is a non-starter; and there is too little time between the Scottish vote (probably in November 2014) and the next UK general election, in May 2015, to hold an in / out EU referendum.

Of course, another reason why Cameron is unwilling to stick his neck out and offer an in / out referendum now is that he probably wouldn’t win support for it in Parliament. This is because neither Labour nor Cameron’s Lib Dem coalition partners would vote for it. Indeed, sizeable numbers of europhile Tory MPs would also reject the idea. In other words, this could easily lead to the break-up of the coalition and even the end of the present government if Cameron chose to make it an issue of confidence and was still outvoted. So if Cameron offered to hold an in / out referendum now, he could find himself having to go to the country in a general election in 2013 and asking the public to approve an in / out referendum that had been rejected by Parliament. So, rather than jeopardise his premiership now, he will instead offer the same choice at the scheduled election time instead. This means, of course, that the issue will not go away, at least until 2015. But it will probably rumble on for some time afterwards, given how un-straightforward the renegotiation in fact is, as discussed in relation to options 1 and 2 above.

4.    This leaves alternative No. 4: a three-option referendum, to be held as soon as possible. As the name suggests, this would canvass the public’s opinion on all three options: the status quo, renegotiation / looser relationship, or quitting. On the ballot paper, the question could be posed as follows:

With which of these statements do you agree the most:

a)        The United Kingdom should remain a member of the European Union, with the same balance of powers between the United Kingdom and the European Union as exists at present ;

b)        The United Kingdom should remain a member of the European Union, but should negotiate with the European Union to repatriate certain powers that have previously been passed from the United Kingdom to the European Union;

c)        The United Kingdom should leave the European Union altogether.

Clearly, one problem with a multi-option referendum is that you can fail to obtain a majority mandate for any of the options. However, in this instance, this can be overcome very simply by requiring voters to indicate a second preference. In the event that none of the options on the ballot paper wins a majority of first-preference votes, the second-preference totals for all of the options are added to the first preferences. This is different from the Supplementary Vote (SV) system, which is presently used for London mayor elections, and where only the top-two candidates go into the second round of voting, and only second-preference votes for either of these two remaining candidates are added to their first-preference totals.

The pitfall with using SV for the multi-option referendum is that it’s quite possible that option b above (renegotiation) would gain the lowest total of first preferences but the highest total of first and second preferences combined, as supporters of the status quo and the UK’s exit from the EU would mostly pick renegotiation as their second choice. For this reason, using this system, it’s almost inevitable that the consensus choice – renegotiation – would win comfortably in the second round.

It is of course an outside possibility that the status quo or the Brexit would win an outright majority in the first round of voting, in which case the mandate is clear: winning an overall majority when there are three options on the table is a far more convincing victory than when there are only two choices. On the other hand, it is distinctly possible that the option of quitting the EU would win the plurality – the largest number of votes but not a majority – in the first round. This, too, would send a very clear message to the EU and would put the UK in a strong position to negotiate a favourable deal: it would demonstrate that more people favoured leaving the EU altogether than any other course of action. Similarly, as the totals for all three options would add up to effectively 200% if the referendum went into a second round, it is quite likely that, even if it did not win, the Brexit would be supported to some degree – either as their first or second choice – by a majority of voters. This would orchestrate the UK’s clear message to the EU even further.

Of course, if the voting system I propose is used, it’s entirely possible that all three options would obtain the support of a majority of voters on first- and second-preference votes combined. However, for the reasons given above, it is likely that renegotiation would get near to 100%, so long as it is mandatory to indicate a second preference on the ballot paper (which is the only way to ensure that at least one option does win a majority). Another way of putting this is that renegotiation would be unacceptable to only a very small percentage of voters (100% minus the share of first and second preferences won by the renegotiation option); whereas the status quo or the Brexit would be unacceptable to considerably more people. And as a very high percentage of voters would have supported renegotiation to some degree, this is something the country could unite around.

Incidentally, this way of conducting a three-option referendum makes it very unlikely that England would vote differently from the UK’s other nations: the consensus option would almost certainly win through consistently across the whole UK. It’s possible that leaving the EU would gain the plurality in the first round in England but not in the UK’s other nations; but then renegotiation would win comfortably in England, too, in the second round. This makes a three-option referendum viable ahead of the Scottish-independence referendum.

When it came to ratifying the eventual deal reached in any negotiations, there would be a need only for a two-option question: ‘do you agree to the new terms of the United Kingdom’s membership of the European Union that have been negotiated by the United Kingdom government?’. Answer: yes or no. If the country has indeed got behind the negotiations, thanks in part to the three-option referendum showing this course of action commands the strongest support of any of the alternatives available, then it is unlikely the deal reached would be rejected in the second referendum.

The three-option referendum would, then, be the most logical and the least divisive course of action. However, it would also rely on Mr Cameron being able to pass the measure in Parliament. The saying ‘where there’s a will there’s a way’ could perhaps apply here: this much more reasonable, balanced approach could obtain the support of the Lib Dems, so long as Cameron was prepared to make concessions to the Lib Dems in other areas, e.g. resurrecting Lords reform.

But probably Cameron is ultimately not really interested in bringing about any radical changes to the UK’s relationship with the EU, still less in risking the UK’s departure from the EU. So he will undoubtedly go down the ‘political’ road of option 1, if the pre-speech briefings are to be believed. In other words: ‘vote Conservative if you want the chance to moderate or terminate the UK’s membership of the EU’. But if the Tories do win an outright majority in 2015, don’t expect or fear anything too radical.

Plus ça change, as they might say in certain parts of the continent!

PS. Cameron duly gave his EU speech, starting just after 8 am this morning (Wednesday 23 January 2013): a lot earlier than I expected.

He did indeed set out the much-briefed option 1: taking victory in the 2015 general election as conferring a mandate to re-negotiate the UK’s position in the EU, including possibly via a new treaty relating to all 28 members (including Croatia, who will have joined by then); and then offering a straight in / out choice between accepting the new deal or exiting the EU.

My first reaction is that using the general election as a mandate referendum is entirely illegitimate. For a start, even if the Conservatives do succeed in winning an overall parliamentary majority, this will be on no more than around 40% of the popular vote. By contrast, Labour and the Lib Dems – neither of which are likely to include a referendum in their manifestos – will almost certainly win a larger combined share of the popular vote than the Conservatives, as they have done in every election since the Lib Dems’ formation and even earlier, in the days of the Lib-SDP Alliance. Therefore, using the election as a mandate referendum is a way to circumvent the requirement to gain the support of a majority of voters for re-negotiation, and robs the process of the democratic legitimacy that the contrary process – greater EU integration – has suffered from over so many decades.

In addition, presenting the public with only two choices after the negotiations have been completed – assuming negotiations will even take place – is also unfair. The British people will be forced to choose between staying in the EU on the terms that a Conservative government has negotiated or leaving altogether; but we won’t be offered the choice of remaining in the EU on the existing terms. Therefore, pro-EU voters will be forced to accept the new parameters of Britain’s relationship with the EU, based largely on neo-liberal economic principles: the Single Market at the centre of the whole EU exercise, but with the UK free to determine its own industrial, labour and welfare regulations, with fewer protections for British workers than are enjoyed by workers throughout the rest of the EU. (Never mind the paradox that this freedom of British industry to be more ‘competitive’, as Cameron would say, actually undermines the Single Market, because the Single Market is based on everyone playing by the same rules.)

In other words, the whole process would be skewed in favour of a Conservative ideological agenda, and the British people will not in fact have the choice they deserve, which is between three options: the status quo, and potentially the UK participating in even greater EU integration at some future point; a looser relationship, based mainly on economic competitiveness and free trade, as set out by David Cameron this morning; or a UK exit. Only a triple-option referendum, such as I set out above, can deliver that full choice.