What happens after the EU referendum?
(4th June 2016)
During the May 2015 General Election, David Cameron hinted that he would stand down during this Parliament, “Terms are like shredded wheat; two is fine, three might just be too many.” This means that at some point before 2020, Britain will have a new Prime Minister.
For foreigners reading this, Britain does not have a presidential system of government. Instead, we have Cabinet or Parliamentary government, meaning we elect representatives to the legislature, from whom a government is then formed. Therefore, if our Prime Minister resigns or dies, this does not trigger a General Election.
In the past, “men in grey suits” would have chosen a new party leader in smoke-filled rooms, as was the case in 1963 when Lord Home was selected as the new Leader of the Conservative Party and therefore Prime Minister. Since then, the Conservative Party, like the Labour Party, has elected its leaders. When David Cameron resigns, he may either do this with immediate effect, meaning a caretaker Prime Minister will be appointed by the Queen until such time as a new leader is elected, or he may choose to stay on until the election of a successor.
According to Andrew Neil, Cameron’s initial intention had been to stand down in the Spring of 2019, giving a successor a year to get his feet under the table before the May 2020 General Election. Again, in the past, Prime Ministers could ask the Queen to dissolve Parliament at a date of their own choosing. Margaret Thatcher never served a full 5 year term, and nor did Tony Blair, instead preferring to call elections when opinion polls were favourable. Thus, newly “elected” Prime Ministers were, in the past, encouraged to call “snap elections” on their appointment. Cameron’s predecessor, Gordon Brown, took over from Tony Blair in June 2007 and flirted with the idea of an autumn election. Ultimately, he waited until the latest possible date, May 2010, and this did him no favours.
However, in 2011 the Conservative-Liberal Democrat Coalition passed the Fixed Terms Parliaments Act, meaning that elections must now be held in the first Thursday in May five years after the previous election. There is some provision for votes of no confidence in the government from a super-majority of the MPs in the Commons to trigger an early election, though this is unlikely. David Cameron’s successor, therefore, will most likely be Prime Minister until May 2020.
The European Union Referendum
The British electorate will vote on whether to remain in the European Union on the 23rd June 2016. The campaign has already turned nasty in the Conservative Party, historically bitterly divided over the issue of European integration. There have already been calls from Conservative MPs for Cameron to resign following an ‘Out’ vote from backbench opponents like Nadine Dorries. Furthermore, it has become obvious to most observers that the referendum campaign is little more than a civil war within the upper echelons of the Conservative Party, with those opposing Cameron’s Remain campaign actually more interested in removing him from office. The most ambitious of these opponents is clearly former Mayor of London Boris Johnson, whose lifelong Europhilia has been put on hold in order to further his own leadership ambitions.
What many are asking themselves now is “What will happen after 23rd June?” The palpable sense of uncertainty is damaging the markets and the exchange rate, since neither side of the referendum has given any serious arguments, instead talking in sound-bites and vacuous inanities. Still, in this late stage in the campaign, perhaps 20% of the electorate remain “undecided.”
Rather than speculate on the likely effects on the British economy, let me outline what I think are the possible political scenarios following 23rd June and evaluate them from a libertarian-conservative point of view.
SCENARIO 1: Remain Vote with Large Margin
The results in this scenario could be a ‘remain’ (in the EU) vote of 60% or higher, on a good turnout of roughly 75%. In such a scenario, David Cameron’s position would be bolstered. Sean Gabb has described the referendum as a chance to register satisfaction or dissatisfaction with thestatus quo. If Cameron wins his referendum, it may be seen as a strengthening of his mandate.
Indeed, this is the scenario which Sean Gabb believes will unfold. He cites the generally poor quality of the Vote Leave campaign meaning that voters will refuse to endorse a leap into the unknown. However, as Steve Hilton has said, while the public are aware of the risks of leaving the EU, they are also aware of the risks of staying in; they have seen the way Greece has been treated and they don’t like it, and nor do they like the French or the Germans, for whatever reasons.
To be sure, there would be some political excitement in this scenario. Things would not be 100% business as usual; Cameron would have to sack vehemently Eurosceptic Cabinet ministers and his remaining time as Prime Minister, however long that might be, would be marred by Eurosceptic backbench rebellions, with Boris Johnson and Michael Gove being particular thorns in his side. Indeed, far from strengthening his own position, if Cameron is not careful here, he could end up with a repeat of the 1990s, where John Major’s government was at the mercy of the “bastards” (Michael Portillo, John Redwood, et al).
In terms of policy, however, there would be little change.The anti-drug Puritanism would continue. The foreign policy hawkishness would continue. The slow, tentative approach to “austerity” would continue. The drift into a soft police state would continue.
SCENARIO 2: Narrow Remain Vote
In this scenario, the electorate vote to remain in the EU by a narrow margin. This is a remain vote of between 50 to 60%. In such a situation, Britain would remain in the EU, but the result would not be seen as a clear vote of confidence in Cameron. Therefore, he would have to go and in any leadership contest it seems Home Secretary Theresa May would have the best chance of winning as the remain candidate. Chancellor George Osborne and Education Secretary Nicky Morgan are also possible Europhile successors, but Osborne is damaged goods since his 2015 attempt to cut Working Tax Credits and his 2016 attempt to cut Disability Living Allowance and Morgan is not well-known enough.
Perhaps this scenario would be the worst. Theresa May is a talented shape-shifting politician, however, her latest incarnation has been Big Brother (or Big Sister). One might expect the major theme of a May premiership to be “keeping Britain safe”, i.e. more anti-terror legislation, more police powers, still fewer of our historic liberties left in tact.
SCENARIO 3: ‘Vote Leave’ triumphant & ‘BoGo’
In my view a Brexit “victory” would be the most likely of the scenarios due to differential turnout of Eurosceptics and older people. Indeed, according to Roweena Davis, roughly half of 19-24 year old voters are on the electoral register compared with almost 100% for older voters. Therefore, even if young voters want to vote and do turn out, they will be turned away at the polling stations.
A victory for Vote Leave would most likely unseat Cameron and prevent a Cameronite successor winning in the leadership election. In such a race, Boris Johnson would be the most popular candidate with party members and the electorate, with Lord Chancellor Michael Gove the brains behind his leadership campaign and subsequent premiership.
Johnson’s Cabinet might be a cocktail of traditionalist conservatives like Peter Bone or Jacob Rees-Mogg, combined with libertarians like Steve Baker. Thus, libertarians might cheer this government on as it cuts (direct) taxes and cuts “red tape.” Indeed, the Johnson government would abandon any pretence at all of “controlling immigration”, instead openly welcoming more refugees and economic migrants, with no net migration targets whatsoever.
While superficially libertarian, a Johnson government would be one with a strong neoconservative pro-America, anti-European theme. Neoconservative Gove would be the de facto Deputy Prime Minister, with a side-lining of the Cameronite loyalist faction, notably Osborne, Morgan, and May. With Johnson and Gove at the helm, former Defence Secretary and arch-neocon Liam Fox would doubtless return to Cabinet, perhaps as Foreign Secretary. The hawkishness of the Cameron government, with Foreign Secretary Hammond and Defence Secretary Fallon, would be as nothing compared to the hawkishness of a Johnson-Gove government, although they may seek to distance themselves from the Middle East in favour of waxing lyrical about the Russian threat.
Yet the Euroscepticism of such a government would be glib and insincere. Johnson has been a Europhile all his political life and we can therefore expect either a painfully slow Brexit, through invoking the relevant article of the Lisbon Treaty (rather than just repealing the European Communities Act), or no Brexit at all. Indeed, if the pro-Brexit vote is narrow, then a Johnson government might instead decide to once again renegotiate the terms of Britain’s membership of the European Union, rather than leave. If his journalistic career is much to go by, I wouldn’t put much stock in any political promises made by Boris Johnson.
SCENARIO 4: (Unlikely) Libertarian Coup
A star of the Brexit campaign has been Austrian School libertarian Steve Baker MP. The best possible world following 23rd June would be a libertarian coup, led by Cameron’s old rival, the right-wing patriot and civil libertarian David Davis, with the younger generation brought on side by the promotion of Baker to Chancellor of the Exchequer.
Such a government would cut public spending massively, shut down entire government departments like the Department for International Development and the Department for Culture, Media, and Sport. Such a government would abolish inheritance tax, to name just one. It would deny all welfare benefits to foreign nationals. It would ensure that we actually did leave the European Union, and that we left as quickly as possible. It would also at least decriminalise some drugs and would repeal much of the anti-terror legislation. It would increase the reserve ratio for banks and stop printing new money. It would do many good things.
Alas, such a libertarian coup is unlikely. Libertarians are in the minority in the Conservative Party in the Commons, even if they are slowly taking over the youth wing of the local membership.
This libertarian populist government would run into difficulties, with backbench dissent from the “compassionate conservatives”, the neoconservatives, and the traditionalists, even if it did win over old Thatcherites like John Redwood.
It seems likely that, contrary to the lyrics of the popular song, “things can only get worse” in terms of British government. While Cameron has been a terrible Prime Minister, with a disastrous economic and foreign policy record as well as a disregard for civil liberties, the most probable potential successors, Theresa May or Boris Johnson, appear no better. The Davis-Baker libertarian “dream-ticket” seems unlikely at this stage. However, if enough libertarians write to them and encourage them to run, it might just happen. It’s worth a try, isn’t it?