24 August 2015

This is still a ‘phoney war’

According to The Sunday Times, the ‘No’ campaign is beginning to take shape and is due to launch in the next month or so. Meanwhile, the ‘Yes to Europe’ campaign has reportedly already recruited its campaign team.

The Sunday Times quotes a No campaign source as saying its strategy will be based on internal polling which suggests that, while one third of the electorate will vote to stay no matter what in the upcoming EU referendum, and one third will vote to leave no matter what, “We need to talk to the one-third of the country who don’t like the EU and would like to leave, are frightened of the consequences and are not persuaded by Ukip.”

There is undoubtedly a large swath of voters up for grabs who are at this stage either unconvinced of the case either way or have yet to engage with the issues (this is a familiar story in polling going back some way). Exactly which issues and arguments will bring these people into play will be crucial but, reading between the lines, it seems the No campaign is likely to focus less on immigration than on neutralising the perceived economic risks of withdrawal, the benefits of returning democratic control from Brussels and casting doubt on the substance and/or form of the reforms secured by the Government. How this pans out will be crucial in the campaign as so far neither side has offered anything of substance to swing voters, with both sides preaching to the converted.

Economics could be less important than many think

The extent to which even the business community thinks the economic argument is finely balanced is illustrated by an article in The Daily Telegraph today by Dr Alexander Moscho, the UK and Ireland Chief Executive of German pharmaceutical company Bayer. Echoing the conclusions of our work on Brexit, he argues that:

Accountants make much of the potential economic consequences for both the UK and the EU of a ‘Brexit’. Depending on who you believe, the impact could be disastrous or positive. I believe it could also be neutral; if Britain can set up a working free-trade scheme with the EU, then the economic consequences might actually even be positive. Britain would survive. But life would be more difficult for companies that need and want to employ people from across Europe: just look at the impact the Swiss referendum had against their remaining part of the EU labour market.

Dr Alexander Moscho, The Daily Telegraph, 24 August 2015

While arguing that a reformed EU would be good for business his concluding arguments for Britain remaining inside are about maintaining Britain’s influence in global affairs and over its European markets. This then, in Dr Moscho’s view, is not necessarily clear-cut but a question of trade-offs.

In such circumstances, the case for staying in is much easier to make if the EU reform process initiated by the UK is seen by voters to be ambitious and successful. On the other hand, it is far easier to make the case that it is worth taking a gamble and putting up with the initial disruption of Brexit if ‘reform’ is perceived to be superficial and/or a failure.

The public is sceptical that major reform will be on offer

Of course, yet to take the field is David Cameron, George Osborne and the other members of the Government expected to lead the In campaign on the basis of the forthcoming negotiations with the rest of the EU. Previous polling suggests that the likes of Cameron, Osborne (and, interestingly, Boris Johnson) are likely to have sway with swing voters and much is likely to be staked on the personal authority of the Prime Minister and the Chancellor, but this is not unlimited.

According to a recent YouGov poll, 22% of British people think David Cameron is trying to get major changes to Britain’s relationship with the EU. 36% say his efforts are for modest but significant changes and 25% suspect he is only pushing for minor tweaks. This suggests a solid 58% of the population are willing to give his reform push a chance and believe it is a serious effort. He should not waste this goodwill. However, most British people (67%) also believe other EU countries would rather Britain stayed in, but won’t offer Cameron much to ensure it does.

This all suggests there remains much to play for and that while Yes currently has a lead in the polls, this could be far from insurmountable.