Wales at odds with London over referendum

David Cameron’s speech this week, committing to a referendum on the UK’s membership of the EU, has set in motion a series of complex political dynamics. Perhaps of most relevance to Wales is the impact that uncertainty surrounding the UK’s membership of the EU may have on Scotland’s independence referendum in 2014.

This may be an unintended consequence of Cameron’s speech. But it undoubtedly has the potential to undermine one of the main arguments of Scotland’s ‘No’ campaign – uncertainty around an independent Scotland’s continued EU membership.

The gauntlet thrown down by Cameron, under the dual pressures of Eurosceptic Tory back-bench MPs and the good fortunes of the UK Independence Party, has also put the Welsh Government firmly at odds with London. In itself this may not be a newsworthy occurrence. However, attitudes towards EU membership reflect broader, ideological arguments, and in this case serve to highlight competing narratives across the UKs constituent nations.

In the speech Cameron argued that it was not the objective of British people to forge an “ever closer union among the peoples of Europe”. Instead, the UK’s interests were manifest in “a flexible union of free member states”. He promised a referendum in the next Parliament if the Conservatives win the General Election in 2015. In the meantime, the basis of the UK’s membership was to be renegotiated in an attempt to repatriate power to national parliaments, as the “true source of real democratic legitimacy and accountability in the EU”.

The reception of the speech has been mixed. Nick Clegg warned of “years and years of uncertainty”, hitting economic growth and jobs, arguing that it was “wholly implausible” to re-write the rules of the EU in such a way that they “benefit us and disadvantage everybody else”. Meanwhile, Labour made much of the fact that the Prime Minister was ‘dragged’ into the decision on a referendum by his own party and the electoral threat of UKIP, rather than a consideration of the wider UK interest. Business leaders have been split between the attractive prospect of reducing ‘red tape’ from Brussels, and the danger of an ‘uncertainty premium’ being factored into the costs of UK inward investment.

However, it is in the devolved nations that the ‘mood’ of the Conservative party over Europe sits most uneasily.  In Wales, First Minister Carwyn Jones responded angrily, arguing that the decision “plays into the hands of those who want to break up the UK”. Further, he said that “anything that puts a question mark over our membership of the EU is a mistake”, especially so far as the prospects for jobs and economic development were concerned. This rhetoric marks a continuation of themes that the First Minister has been expressing over the past few months, under the shadow of increasingly euro-sceptic narratives emanating from some quarters of the UK government. Carwyn Jones has argued that a UK exit from the EU would be “an unmitigated disaster for the Welsh economy”. Indeed, Wales has a significant interest in a number of European funding streams, particularly in those coming under the banner of structural convergence funds and the Common Agricultural Policy.

Beyond these direct sources of funding and the numerous European programmes from which Wales benefits from involvement (such as Europe 2020), the value of the European market to foreign investment in Wales is crucial. More broadly, there is a stark difference in the attitudes towards the EU in the Welsh and UK Governments. European policy, and membership, are not official competencies of the devolved nations. However, a legitimate devolved interest in European policy, where it overlaps with devolved competencies, was acknowledged at the outset of the devolution process in 1999.

In a speech at the London School of Economics late last year, Carwyn Jones speculated on the problems that would be posed following a referendum on EU membership in which a vote to exit was “carried by the weight of English votes against the preferences of other parts of the UK to remain in membership”. This scenario became a much more serious prospect last Tuesday.

It is in the Scottish context, however, that the potential implications of Cameron’s referendum become pressing. Most obviously, the decision undermines the unionist argument that a ‘yes’ vote would put at risk Scotland’s position in the EU. According to Brian Taylor, the BBC’s political editor for Scotland, it will now be much more difficult for the UK Conservative Party to challenge the SNP on this issue, which they have previously done with vigour. As he put it:

“Now what do the Tories say on this topic? Reject the SNP, stick with the UK – and we will offer you the prospect that a vote across the whole of these Islands may take you out of the EU, perhaps in contradistinction to the opinion in Scotland”.

The economic dimensions of this debate on EU membership may also prove to be particularly important for the Scottish referendum. In a report published earlier this month, the Scottish Centre for Social Research stated it is economic considerations that are likely to play a decisive role in the outcome of the Scottish referendum in autumn 2014. The report’s author, Professor John Curtice of Strathclyde University argued that:

“The eventual outcome of the referendum could well turn on which side is thought by the Scottish public to have the better of the economic argument – an argument that neither side seems as yet to have won or lost in their eyes”.

At the very least, the uncertainty spawned by Tuesday’s speech cannot strengthen the ‘No’ campaign’s cause in this regard. According to a poll published yesterday, support for independence in Scotland has fallen to 23 per cent, down from 32 per cent a few months ago. Of particular relevance in the context of the promised EU referendum, 42 per cent of people believe an independent Scotland would have a stronger voice in the world, down from 51 per cent in 2011. Yet, with the prospect of a UK exit from the EU, it seems plausible that this figure may increase significantly.

For the SNP, the neutralising effect on arguments questioning an independent Scotland’s ability to secure EU membership, combined with the uncertainty of Scotland’s European interests being secured if it remained in the UK, must serve as the silver lining in this week’s news.

If there is to be a referendum on the UK’s membership on the EU, and there are many intervening factors to take into account, it is at least five years away. The vote on Scottish independence, however, may well be affected simply by this issue being placed, firmly, on the UK’s agenda. Whether or not it plays decisively ‘into the hands of those who want to break up the UK’ remains to be seen.

When David Cameron asserted that the British people do not wish to “forge an ever closer union among the peoples of Europe”, it is far from clear that he was speaking for the UK as a whole. While it would be too simplistic to read across from the positions of Welsh Labour and the SNP straight to the Welsh and Scottish publics, the debates on Europe look and sound very different depending where you are in the UK.