What did Dan Hannan MEP & Vote Leave actually want?

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(Remainers) would be on much stronger ground is in trying to work with us on a new post EU consensus. I have to accept that this was a narrow outcome, 48.1% represents a very large majority (sic) … the result exercises a measure of temperance on us, of moderation.

So those of us on the winning side need to listen particularly to the concerns that our remain voting friends raised…to see if we can’t reach a position that is capable of uniting the majority of people in Britain. It may too far for some, it may not go far enough for others but something that both sides can at least live with.

Dan Hannan, MEP and leading Brexiteer, July 27th 2016.

A plea to Remainers to work with the winning side to reach a compromise.  A commendable recognition of the 48.1% and an effort to build bridges, to meet in the middle.  He says these words 1 min 46 seconds in on the video below.

 

He does it again here on a Newsnight interview the night after the result, 1 minute in, when he says that the Leave voters:

have to be cognizant of the extent to which opinion is divided, we have to try and carry as many remain voters with us, and that may well mean that quite a lot of the existing arrangements will stay in place

The interviewer Evan Davies then asks him “Do you support the Norway model for the UK” and Hannan replies “not exactly the Norway model” before going on to describe pretty much the Norway model including, critically, Free Movement (he says “of Labour” rather than people, but it’s a known fact that Norway has free movement of people and more immigrants per capita than the UK).  Again, the implication is clear – it was a close result, many people voted for Remain, we should respect that and go for something like Norway as a half way house to try to please everyone.

So what’s going on?  Have Dan Hannan and Vote Leave suddenly decided to respect the 48% and push for a compromise model?  To give a reminder of those “existing arrangements”  (I’m using “Norway” as a shorthand here, technically this would be an EFTA/EEA agreement):

1. Membership of the single market (only if regulations from the EU are accepted)
2. Free movement of people
3. EU Budget contribution
4. More/less “sovereignty”, depending on your point of view

The problem of course is that these final 3 issues were the basis of the Vote Leave campaign.  Remainers would be happy but many Leavers not so much, especially over free movement (which has been labeled “mass uncontrolled immigration” by Vote Leave).

Still, at least Dan is fighting for compromise and some middle ground.  If he’s prepared to shift to a Norway model in recognition that “It may too far for some, it may not go far enough for others but something that both sides can at least live with.” then that’s to be admired as a a middle ground that Remainers AND Leavers should get behind.  Isn’t it?

Not quite.

 

Dan’s Long Term Plan

The problem is, this isn’t a late conversion by Dan Hannan,  this “compromise” (i.e. Norway model) was what Dan Hannan, and possibly much of the Vote Leave Leadership, wanted all along .  In fact on this video, on the “EFTA 4 UK” website (created in November 2015)  Dan talks about this model on a video from May 2016, long before the narrow result.  In it he states:

the Four countries (of the EFTA) are fully covered by the Four Freedoms of the single market, that is to say the movement of goods and services, of people and capital.

about 1 minute in.  In fact, far from being against free movement his tone is meant to reassure people, “Dont worry, this model still includes all four freedoms including movement of people”.

Dan Hannan saying “It’s OK, we’ll still have free movement”

This initiative, which long predates the actual result, was an attempt to persuade the UK to adopt the EEA/EFTA model that Norway has.  There is a group called the Leave Alliance who have been pursuing a similar agenda for about 4 years.

So, lets be clear.  Immediately after the result, Dan Hannan was trying to use the 52/48% closeness of the result to get Remainers AND Leavers (and this is the important point) to align on a “compromise” that was in fact the solution he had been campaigning for for several months previously.  This could be judged as being fairly cynical.

 

It wasn’t just Dan though…

Well, OK, it’s somewhat sneaky of Dan Hannan to try to use the close result to push a “compromise” model that wasn’t actually a compromise at all from his point of view, but perhaps it was just him?  Well no, not really.  Boris Johnson said the following in this article in the Telegraph on the 26th June:

I cannot stress too much that Britain is part of Europe, and always will be. There will still be intense and intensifying European cooperation and partnership in a huge number of fields: the arts, the sciences, the universities, and on improving the environment. EU citizens living in this country will have their rights fully protected, and the same goes for British citizens living in the EU.

British people will still be able to go and work in the EU; to live; to travel; to study; to buy homes and to settle down. As the German equivalent of the CBI – the BDI – has very sensibly reminded us, there will continue to be free trade, and access to the single market

Again, this is essentially describing the Norway model, nothing else would give us these benefits.  And Johnson’s economic adviser Dr Gerard Lyons also produced this report in March 2016 in which he said:

We decided to take a 20 year forecasting cycle….The second best option (of 4 scenarios) was in scenario “one regime, two systems” being outside and on good terms with the EU and globally focused

I’ve asked Dr Lyons to define what “on good terms” means, he’s yet to respond so after looking at the other options I’m going to assume this is also the Norway model.

OK, so certainly Dan Hannan, probably Johnson and possibly many others in Vote Leave wanted the Norway model, which does give us the ability to write our own trade deals.  Why not just say so and campaign on that basis?  Well, probably because “new trade deals” wouldn’t really be enough to get over 50% of the population to take the risk.

 

But what about Free Movement and stuff?

So hang on, didn’t Vote Leave promise to reduce immigration?  What about that bus that showed the millions being sent to the EU? They said that was for the NHS.  AND they kept talking about sovereignty, taking back control?

How could they meet all those promises when in fact for most people EU membership and the Norway model are essentially the same?  Well, as said,  unfortunately,  “we can write new trade deals” just isn’t that interesting to the majority of voters.  Therefore the Norway model had to be made to look far more radical and appealing than it actually was.

To do this, initially Vote Leave chose to take non 2 issues and make them rallying cries, sovereignty and the EU budget contribution.  Later, in a massive gamble, they raised the profile of Immigration.

Sovereignty

Vote Leave put a lot of emphasis on “Getting our country back” however there’s “sovereignty” on paper and “sovereignty” in practice. In actual fact the UK is sovereign, was sovereign and has always been sovereign whereas the EU is not and can never be sovereign.  What we are actually talking about in the most part is trade law and regulations.

In other words, in the EU the UK has a major say in policy but must accept the outcome of discussions.  Norway doesn’t have to accept anything, but if it wants to trade in certain areas it must accept the accompanying regulations and it has no say whatsoever in those regulations.  Although the estimates vary in exactly how much, in practice Norway accepts most regulations from the EU.

So, influence over 50% of your customer base vs being able to opt out of certain directives (but also certain markets).  Arguably the latter gives more “sovereignty” on paper whereas the former gives more “sovereignty” (or certainly influence) in practice.  However, Vote Leave obviously felt they could give a convincing “illusion” of increased sovereignty once Norway was adopted.

 

EU Budget Contribution

No, it really, really doesn’t

This is covered in another post in greater detail.  Suffice to say the only practical difference between the Norway & UK contribution is our payment into the common agricultural policy (CAP).  Per capita we pay about the same net.  Shouting about a net saving of about £3B really wasn’t going to have much of an impact.  However, by ignoring the CAP mechanics and including the rebate that we never pay, Vote Leave would be able to make a £3 Billion saving look like £11 Billion under the Norway model.  There would still be a significant contribution from the UK but on paper it would look like that contribution had been “slashed” from £18 Billion to £7 Billion. Or in other words:

Great news, we’re now in the Norway model, rather than paying £8.5 Billion Net we now pay £5.5 Billion Net, it’s a great victory.  By the way we’ll now pay the £3B directly to the farmers as we are no longer getting cash from CAP so it’s still around £8.5 Billion in total….but it’s still great

is nowhere near as compelling as:

Great news, we’re now in the Norway model, rather than paying £18 Billion we now only pay £7 Billion, we’ve taken control of over £11 Billion of our money, it’s a great victory!

Again, the “illusion” of a massive saving rather than the rather dull reality of a small saving.

However, for Vote Leave these weren’t enough to swing the voters, so they looked to UKIP for inspiration.

 

Freedom of Movement and the Missing Promise

Remember this?

And so we get to the final hurdle, freedom of movement.  How could Vote Leave promise to reduce immigration numbers if they were planning to move us into the Norway model?  Answer: they never did promise to reduce numbers.  They attacked the government over not meeting the 100K or less immigrants per year and talked about taking control via a points system, but not once did they actually promise to reduce immigration by any number whatsoever.  No google search will reveal any commitment by any Vote Leave leader to any reduction.

And this is confirmed by the video above from Newsnight, as Dan Hannan protests and says “I made it clear, do not expect a drastic reduction in numbers, it’s all on Youtube” to the obvious exasperation of Evan Davies.  Everyone thought Vote Leave were promising to reduce immigration numbers, they talked about pressure on jobs, housing and the NHS so surely this was their plan?  Cue:

the Four countries (of the EFTA) are fully covered by the Four Freedoms of the single market, that is to say the movement of goods and services, of people and capital.

as Dan Hannan said back in April.

 

So what was really going on?

Good question.  There are various interpretations but this seems as good as any to me.

Start of Campaign for Vote Leave

Firstly it’s important to state that most of the Vote Leave Leadership are free marketeers and as such they have no problem with immigration and had no intention to reduce it. Their primary aim was likely the gradual build up of new trade deals with the rest of the World whilst preserving our EU markets and, if those deals appeared, we would then gradually disentangle ourselves from all those pesky regulations around food safety and workers rights.

At least a few of them wanted something like Norway, probably because they knew like most informed people that cutting free of the EU immediately would be devastating to the UK economy.

They would therefore sell the benefits of additional free trade and use the complexity around sovereignty/influence and our CAP/EU Rebateset up to persuade (fool) people into thinking that the Norway option was the all round better deal.  They would play down the additional free trade stuff (even now many people don’t understand that Norway can sign its own deals) and play up sovereignty (by exaggerating EU influence over the UK) and our contribution to create the headline catching “£350 Million”.

The plan most likely was to sell these “Benefits”, win the referendum (or even narrowly lose it) and perform a fairly painless switch into the Norway model after the win.  There would likely be some token resistance from the EU but they would probably accept this switch for the stake of stability and away we would go.

 

What went wrong?

Unfortunately, free trade deals were not compelling enough, the £3350 million was being attacked and Leave did not want to be pinned down on a specific model. They had learned from the SNP who had presented a detailed plan for independence and been beaten over the head with it so they wanted to stay vague.  But this made it difficult to sell the vision.

And then they noticed that Nigel Farage was getting traction on Immigration.

 

The Immigration card

So then Leave embarked on a dangerous game.  They couldn’t promise to reduce immigration numbers and stay with the Norway model, but they wanted to use the issue of immigration to swing the debate.  So they called on old stories of Immigrants putting pressure on houses, jobs etc, attacked the government over it’s failed 100K pledge, but carefully never made any commitments on reduction. It was a clever approach, make attacks on immigration numbers and impacts look like a commitment to address them.

Unfortunately they over played it.

 

Immediately after the result

Victorious Leave Leadership

We’ll all remember the “victory conference” for Leave, and the looks on the faces of Stuart, Gove and Johnson in their moment of triumph.  They gave their speech and disappeared from view for 2 weeks. Dan Hannan then appeared and then attempted to use the closeness of the vote, not to appeal to Remainers, but to try to get Leavers to accept free movement.  Johnson even stated in his telegraph column “I cannot stress too much that Britain is a part of Europe” following the result:

It is said that those who voted Leave were mainly driven by anxieties about immigration. I do not believe that is so

Unfortunately for all of us, the immigration card was overplayed as was “control of our borders”.  Norway may be possible still, however the government now seems to think that some control on Immigration is a “requirement” of the British public.

 

So, Where Are We Now?

So, to summarize:

• Certainly Dan Hannan MEP and probably a good number of Vote Leave wanted the Norway model as a stepping stone and always have.  They almost certainly knew that anything else, especially a hard Brexit, would be incredibly damaging for the UK.
• To win however, they chose sovereignty, EU contribution and Immigration (rather than the actual benefits of the Norway model) as their rallying cries.
• Unfortunately, although it’s possible to fudge the EU contribution and sovereignty picture, Norway means Freedom of movement and can’t be fudged.
• Still, they managed to get through an entire campaign attacking the perceived “effects” of immigration without actually promising to do anything about it.
• However, they didn’t forsee how Immigration would take off as the main issue.
• Johnson and Hannan tried some damage limitation after the result, but unfortunately, the genie is out of the bottle.  Norway is relatively easy to sell to remainers but now very difficult to sell to a large number of Leavers.

As a side note, if Vote Leave couldn’t promise to reduce immigration, then why talk about “pressures” on the NHS, housing,. jobs etc?  If Immigration was going to stay the same, then all those “pressures” would also stay the same after leaving the EU.

So we’re in a bit of a mess.  Many leave voters now believe that we can either

1. get a deal with the EU that doesn’t include free movement or, worse
2. strike up deals immediately with new countries and leave the EU without significant problems.

Unfortunately, however, neither are feasible, and everyone in charge knows it.  The current pause in government activity is not just about working out what the UK wants, but in determining how on earth they can meet the impossible, reducing or eliminating free movement without causing huge damage to the economy.  The government is trying to reconcile impossible expectations against reality, knowing that if they try to meet those expectations the UK will suffer significant damage with no guarantee of a recovery given how long it actually takes to sign new trade deals.

And the Brexiteers can’t help because either they don’t understand the problem or they wanted the Norway model anyway, which they have now made very difficult to sell to the Leave Voters.

However, they also set unrealistic expectations about our place in the world and how easy it would be to disengage from the EU, and worse, they gave the impression that the UK could force the EU into accepting “free trade” without “free movement”.

 

If you are a remainer reading this, you’ll share my frustration at a huge game gone wrong.

If you are a Leaver, unfortunately Vote Leave painted a picture that quite simply many of them didn’t believe in.  Many of the Leadership as free marketeers never cared about immigration and nor did they believe that we could simply leave the EU without significant problems. Put simply, they did not and do not believe in the “vision” many of you support.  This is why they have largely disappeared.  Perhaps it’s time to move to the middle.

And the $1M question for both sides, if Vote Leave had campaigned on “We want a Norway type model rather than full EU membership”, would they have won?  Probably not.