Cameron’s Major Brexit Folly: Britain Needed “Fixing” More Than Europe

David Cameron’s biggest folly was to schedule a referendum on the UK’s EU membership. His second-biggest folly was that he felt an irresistible urge to “fix” Europe, when what really needed fixing is very much Britain itself.

This fact of life has finally became painfully obvious even for the most “UK Firsters” in the immediate aftermath of the vote. It is less economic relations with the European continent than the entire structure of the “United(?) Kingdom(!)” that is falling apart.

A UK without Scotland and Northern Ireland is in the offing. Seldom has any man — and any nation — sold self-dismemberment as a courageous act of democracy in action.

In historic terms, unless miracles are yet to happen and the British people reconsider, the Cameron-induced dismantling of the UK is without parallel in modern European history. Unlike the case of the dissolution of the Soviet Union a quarter century ago, the UK economy was not in complete shambles.

Going after the wrong target all along

British politicians, especially conservative ones, like to complain about the dirigisme of the European Commission. Not that all is well in Brussels — far from it.

But what that instinctive form of EU-bashing has hidden all along is that it is the UK itself that operates in an extremely centralized manner on administrative and political matters.

Make no mistake about it: London dominates life around the country much more than other capitals do.

Undoubtedly, for Britain’s politicians and citizens alike, it is much more comfortable, albeit completely dishonest, to blame the European capital and perceived foreign encroachments for the deficiencies of the UK’s own over-centralization.

The venom that many Britons feel, or are induced to feel, about centralization via Brussels would therefore much more appropriately directed at another target – London.

If the United Kingdom’s internal glue continues to weaken from separatism and identity crises it will increasingly dawn on much of the British electorate that it is London – not Brussels – that is the “outside” power dictating terms.

Empowering the regions

To its credit, the outgoing Cameron government pursued an initiative to de-centralize political and fiscal management around England.

With his decentralization campaign, Cameron hoped to achieve real results in just a few years’ time. That may be overly optimistic. When one asks Mr. Cameron’s own top officials, they tell stunningly honest stories about their efforts on the frontlines.

Like Eastern Europe, circa 1990

In order to achieve the laudable goal of dynamizing regional economies (other than London’s, which is going swimmingly), major cities around England were invited to send lists of powers they want to take over from Whitehall.

The idea was — and is — to give them more freedom of maneuver and hence stimulate local sources of economic growth.

As it turned out, local administrators are very hesitant to ask for anything meaningful. Even when, after sending in a timid list, they got additional encouragement from Whitehall, the new list turned out to be still very timid.

In the end, the local managers literally threw up their hands and asked: “Why don’t you send us a list of what we should be asking for?”

One could be forgiven for thinking that this sounds like an experience in Eastern Europe post 1990, not from the UK in the 21st century.

It is hard to imagine a stronger indictment of the presumably emancipating virtues of British democracy than this truly deplorable state of affairs. Regional managers, conditioned in following London’s orders for way too long, are effectively neutered.

But top British practitioners agree with that description. They point to a long tradition of “Treasury-directed” funding all across the union, meaning that local spending needs approval from London (if it does not originate there in the first place).

And therein lies a major irony. It is one thing to blame the EU about the pitfalls of the “Brussels knows best” concept.

But for the very nation that complains about this the loudest to be the same one that basically suffers from administrative centralization at home to such a high degree begs disbelief.

Like France? No, worse

When one asks insiders with great experience of the halls of power in London, they freely acknowledge that the world has been unfair in so eagerly pointing to France and blaming it for too much administrative centralization.

Britain’s economy, these insiders admit, looks a lot as if it were run by France’s famed “ENA-rques.”

In particular, the vastly oversized powers of Britain’s Treasury Department are likely the direct result of parliament’s House of Commons taking from the king the power to spend tax revenues, not just raise them. That development happened over the course of the second half of the 17th century.

It seems as if the bureaucrats, even though acting on behalf of a democratic government, pretty much held on to that royal mindset of dictating to the locals.

This is far from an academic or jurisdictional matter. Among Britain’s large metro areas, only London has an average income that is above the national average.

That is very different in Germany which, in contrast to the UK, to this day has many economic power centers around the country.

With regard to federalism and the effective devolution of powers in this day in age, the fact that two-dozen federated German princely states retained much of their local authority even into the early 20th century takes on a new, modern significance.

That dispersion of power ensured that Germany even today is by no means an overly centralized country, whether economically or politically.

Derailing regional empowerment agenda

Without taking the Brexit vote into closer account, Mr. Cameron and his team had hoped to see real results from their domestic reform efforts pushing regional empowerment quite soon. (Twenty years would be a more realistic time horizon.)

Now, that useful and important agenda has been completely derailed. Even without that major headache of completely rejiggering economic relations with Europe (and of the gradual dissolution of the UK), making progress on this front would have involved a vast effort.

But the prescribed changing of dependent mindsets and all else in order to shift from a country whose administrative structures have been heavily centralized for centuries to one that successfully operates in a more federative structure is now completely off the agenda. Gone, along with it, is the effort to generate meaningful growth at the local level.

Conclusion

Instead of going all in on reforms at the EU level, the UK government would have been much better advised to have focussed on the even more urgent task of reforming itself.