Referendums and unintended consequences


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Two referendums are on the cards for the next few years, one on Europe and one on Scottish independence. Both might have unintended consequences. For example, it’s quite possible that “Yes to independence” in Scotland and “No to EU” in England could lead to less freedom of action for Scotland and more EU regulation in England.

Brave hearts who vote for an independent Scotland will create a situation where their new country is in the EU, but as one of the “mediums” like Slovakia or Portugal rather than part of one of the big six. They will also be in a currency union with the rump UK controlled by a Bank of England that will set rates based on rump-UK needs and be appointed by the rump-UK Parliament. They will be able to set their own policies, but within a scope of action that is just as restrictive as the UK’s is at present in relation to government debt, global markets and European rules – perhaps more so as they will be a small country that will need to establish its own market credibility. Independence, in other words, is really a different flavour of interdependence.

Meanwhile hearts of oak who vote for the UK to leave the EU might be imposing more EU regulation on the UK’s businesses. Without the UK, as Spiegel says, the EU will be much more influenced by dirigiste France, and Germany will lack a supporter for its liberal free market preferences. The UK will not be able to opt out of EU laws entirely, at least not if it wants to have any trading relationship at all. Given that non-EU Norway implements three quarters of the EU laws that Britain does (but with no say in their negotiation), it’s quite possible that a French-influenced regulation-happy EU will be able to impose all sorts of new rules on the UK as a price for access to EU markets – with the UK in the position of “take it or leave it”.

These are both pretty plausible outcomes, but the campaigns will still be framed in the flag-wrapping, over-emotive, reductivist way that referendums always are. The pro-independence and anti-EU campaigns both seem to be running the line “once we have sovereignty, everything will be different – but don’t worry, nothing will change”. The second half of that statement is more accurate than the first – the sovereignty fairy’s magic dust isn’t very powerful these days.


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Published by Anthony Zacharzewski

Anthony Zacharzewski was one of the founders of Demsoc in 2006. Before starting work for Demsoc in 2010, he was a Whitehall civil servant and a local government officer.