Analysis 22 Sep 2016

CMEC Exclusive: Kwasi Kwarteng MP on Britain after Brexit

Kwasi Kwarteng MP

In 1711, the writer Joseph Addison described a visit to the Royal Exchange. Addison described the seemingly infinite variety of people from many different countries who traded in the City of London.  “I am infinitely delighted in mixing with these several ministers of commerce, as they are distinguished by their different walks and different languages”. 

Joseph Addison, a brilliant essayist, MP and a Secretary of State, was noted for his moderation in politics. In one essay on the Royal Exchange, he described himself as what we might today term a global citizen: “I am a Dane, Swede, or Frenchman at different times; or rather fancy myself like the old philosopher, who upon being asked what countryman he was, replied, that he was a citizen of the world.”

A little more than 250 years after Addison’s essay, Charles de Gaulle gave his reasons for using his veto against British membership of the EEC. He noted that “England [for which he meant Britain] in effect is insular, she is maritime, she is linked through her exchanges, her markets, her supply lines to the most diverse and often the most distant countries”. 

Some things clearly stay the same. 

Despite the General’s two vetoes against British membership, however, Britain finally entered the EEC, or the Common Market as it was often then described, in 1973. On 23rd June 2016 in a highly significant and, to some, surprising referendum the British people rejected membership of the EU, as the EEC had become, with 52% (51.9%) voting to leave the Union. 

Despite the most dire prophecies of doom, the world, as it appears three months after this historic vote, has not substantially altered. This doesn’t mean that all dangers have simply faded away, but it does suggest that the worst fears have not been realised. The twenty per cent drop in house prices in London predicted by the Treasury does not appear to have taken place. The much anticipated recession has not yet, thankfully, been visited upon us. We still need to be vigilant. We cannot be too presumptuous in expecting plain sailing all the way but the ship of state, after some initial buffeting, seems steady. 

This vote has, of course, fundamentally altered Britain’s relationship with the EU. Even if Article 50 is delayed, it is clear that many of our European friends want us to leave as quickly as possible.  Brexit means that Britain once again faces an opportunity and a challenge. British membership of the EEC may well be looked at by historians in a couple of decades as an aberration in British history. Should Britain leave in 2019, it would only have been a member for 46 years, a long time for a single person perhaps, but a relatively short period in the history of an old country like the United Kingdom. 

British membership of the EEC served a purpose in the era immediately after the Suez crisis of 1956, and during the period of decolonisation that followed. The EEC seemed modern, thriving and dynamic, especially when compared to a Britain weighed down by industrial strife. 

In 2016, the countries of the EU seem less exciting and dynamic than they had appeared during the 1960s and the thirty-year post war boom, known to the French as “les trente glorieuses”, which saw an immense improvement in living across much of Western Europe.  Today, by contrast, it has almost become a cliché to refer to countries outside the EU which are leading the world in economic growth and dynamism. 

Countries such as India, China and Brazil have, in recent years dominated the financial pages with stories of their increasing economic importance. Despite Brazil’s recent political and economic problems, Rio 2016 very much revealed a country whose influence is growing in the world. 

Brexit can be a great opportunity for Britain to engage with the rest of the world. British companies and political leaders will be forced to cut deals with countries across the world, forging new trading relationships or strengthening old ties. South Korea has Free Trade Agreements (FTAs) with Chile, Singapore India, the EU and the United States, among others. It is currently negotiating with Canada, Mexico, Australia, China and New Zealand. There is no reason why, with decent strategy, Britain cannot emulate the South Koreans in this regard. 

British prosperity will depend, as it has done for hundreds of years, on finance and trade. The Britain of the future will not be substantially different from the Britain eloquently described by Addison in 1711. Charles de Gaulle recognised this in his portrait of Britain in 1963. 

From a strategic and military point of view, Britain’s membership of NATO and the retention of a permanent seat on the UN Security Council will ensure that British voices are heard in diplomatic and defence arenas. There is no reason to suppose that Brexit will, beyond a temporary dislocation, upset key strategic relationships that Britain enjoys across the world. 

As a Member of Parliament who has travelled widely in the Middle East, particularly in the Gulf states, I have often been struck by how Britain’s relationship with these countries is seen as the product of a long history. Many of our relationships in the Middle East are at least 200 years old. It is fitting that 2016 marks the 200th anniversary of the Treaty of Friendship signed between Britain and Bahrain. The latest manifestation of this fruitful relationship is the recent opening of Britain’s HMS Juffair Naval Base. 

Many people in the Middle East speak of the Sykes-Picot treaty, whose centenary we celebrated this May.  What is striking is the fact that many people outside Britain have a much longer perspective of the arc of British history in relation to their own countries than the British themselves. 

Such ideas as the “special relationship” have origins which predate modern circumstances. It is likely that the historic ties of language, and the sharing of common institutions such as common law, educational and political structures will help Britain maintain and develop relations with Australia, Canada, New Zealand, and even the United States, as well as many other countries. 

As in most cases in politics, it is the choices of governments which largely determine success or failure. Brexit is no different. A British government which seizes the opportunity by seeking to engage more actively in the world through trade, diplomacy and the exchange of ideas will successfully exploit the new circumstances caused by Britain’s departure from the EU. A government less certain of purpose, and more pessimistic about its ability to shape its environment, may squander these opportunities. As Cassius says to Brutus in Julius Caesar “The fault, dear Brutus, is not in our stars, but in ourselves”.  This is very much true of our governments. 

As we look across the world today, over the next 10 - 15 years I would dare to suggest that three factors in the international scene pose the greatest challenges. The first undoubtedly is the series of crises in the Middle East. Can stable regimes emerge in Syria, Iraq, Libya and Yemen? What will be the nature of jihadist extremism? What does the “war on terror” mean, and how can we measure success in this struggle? 

The second question relates to China, and the extraordinary strides it has made in economic development of the last 20 years. Can such a pace of economic transformation be sustained? Does China have geo-political ambitions commensurate with its increasing economic power? 

The third big question concerns the United States and its role as a hegemonic power. Since the year 2000, the United States has pursued two often contradictory paths. In the first years of this century, George Bush and his neo-con advisors were unafraid directly to intervene in foreign countries, and the Americans pursued active military engagement in Afghanistan and Iraq, with mixed results. Under President Obama, a desire to retreat from such direct military intervention has widely been discerned. 

Certainly, as a politician who speaks to a number of actors across the Middle East, it is clear that Russian involvement in the region is perceived to be a direct response to US retrenchment in this part of the world. The US State Department and the Pentagon will deny that this is happening, but I can only comment on what the perception is among many of our allies in the Arab world.

Britain and Europe face other problems. Issues relating to migration will continue to baffle politicians, while populist movements such as Five Star in Italy, the Freedom Party in Austria and the Front National in France continue to make gains in elections in their respective countries. 

By contrast, British politics remains fairly stable. We have a new Prime Minister who came to the role after six years in the Home Office. As an MP of nearly 20 years’ standing, and after 10 years serving as a local councillor in London,  Theresa May has an unrivalled experience in both national and local government. The threat from UKIP, our main populist political party, seems very much to have subsided, particularly after the vote to leave the EU. British politics is largely protected from the squalls which often destabilise politics on the continent. 

Britain, as a strong economic power with political institutions whose integrity is admired, will continue to play an important role in global politics.

In stark contrast to the “splendid isolation” supposedly favoured by Lord Salisbury and other 19th century statesmen, Britain in 2016 is a robustly outward-looking country, eager to engage with the outside world.