Is this the toughest project of our times?

What’s the toughest project out there at the moment?

The high speed rail link HS2? Delivering a different regulatory framework for the banking industry? Or delivering almost any major change across the public sector (e.g. the universal credit)?

They are all challenging in their own ways not least because of the political dimension and the number of stakeholders who are vociferous in what they want (or rather what they don’t want).

But here’s one that surely beats them all: The project to take Britain out of the EU.

Set aside your own feelings on the matter and also whether it’s desirable, likely etc. and let’s take a cool-headed look at how it is shaping up from a project management perspective.

David Cameron has set a timescale of end-2017 for resolving Britain’s continued membership of the EU. In two keynote speeches in January 2013 and November 2014, he stated that his government will renegotiate a new relationship for Britain before putting the reformed terms in front of the electorate in a referendum at some point in the next two years.

There are clear ambiguities about what will be in the renegotiation and about what constitutes reform but we shall not dwell on those: the task has been set for Britain’s “eurosceptics” to prepare a case for withdrawing from EU membership through a “No campaign”.

So the No side’s overall objective seems clear enough but after that it frankly becomes as clear as mud. Some quick observations from a project perspective:

1. The vision is not actually as clear as it seems at first sight. Withdrawal is one thing but withdrawal to what? What is the new vision for the UK? Among the groups and think tanks in this space there is no agreement, at least none that would survive beyond an easy headline.

2. If there’s no agreement on vision and objectives, a project approach becomes difficult to define — how are we to deliver against such an uncertain vision?

3. It’s unclear who will sponsor the withdrawal project. Potential sponsors and stakeholders on the ‘No’ side often don’t get on, don’t agree politically, and don’t seem able to agree a common vision (see above).

4. Key partners of Britain are urging a continuation of EU membership.

5. Have the lessons been learned from previous experience? If the early signs are anything to go by, probably not.

6. Is this seen as a priority by ordinary Britons (the end-users)? Polls vary but the answer is that the EU is often low down the list of voter priorities. And recent polls suggest people are likely to vote in favour of continued EU membership.

7. The ‘Do Nothing’ option — namely keeping Britain in the EU — has powerful backers, probably including the government itself. That’s in addition to having disinterested or passively favourable electors.

Let’s now look at each of those points further.

Vision and objectives

If the vision and objectives are not clear, then the No campaign essentially blows up on the launch pad. The probability of that is quite high at the moment.

The act of withdrawal itself is insufficient as a vision. It’s akin to saying “I want this new system” without any coherent business case and requirements being provided nor any benefits being articulated.

With respect to the emerging No campaign, what we can see are a number of aims emerging from the groups involved:

1. To control immigration. This is a key point demanded by the UK Independence Party (UKIP) who were originally formed to fight for Britain’s exit from the EU and who took nearly 4m votes at the general election in 2015. Immigration is cited through opinion polls as a key issue of concern to the electorate.

2. To become a global free trading nation that is not constrained by the EU, not least so that Britain can sign its own trade treaties with non-EU countries (currently an exclusive EU competence). A number of largely Conservative voices including Daniel Hannan MEP and Owen Paterson MP take this approach, often stressing that while they want Britain to set aside EU membership, they do not want Britain to leave the European market.

3. To deliver policies that rein in the free market and expand the involvement of the state in Britain such as policies of nationalisation of industries (currently limited by the EU). This view is taken by eurosceptics on the political Left with journalist Owen Jones of the Guardian newspaper being a leading proponent.

4. To reinvigorate democratic structures in Britain. It is argued that EU membership is incompatible with democracy, with some reasonable evidence being offered in support. It must be said that this democratic theme is noted by all the groups mentioned above but importantly it has other champions who do not align with those other groups, such as Dr Richard North — a researcher and author on EU Affairs.

The obvious incompatibility is between themes 2 and 3. One can’t imagine any unified campaign that could coherently accommodate those arguing for our place in a more global free market along side those arguing for the opposite. Indeed the recent emergence of more people on the political Left supporting EU exit (mostly because of the EU’s treatment of Greece within the eurozone) may magnify this incompatibility.

But a less obvious incompatibility potentially exists between themes 1 and 2. It can be argued that immigration is a very necessary part of running a free trading nation alongside other freedoms of movement: of capital, goods and services. These four freedoms are central to the functioning of the European single market. Daniel Hannan MEP, for example, argues that Britain’s place “in the European market” and sometimes more specifically “in the single market” should be maintained after an EU exit, and he cites Switzerland and Norway as examples. It was left to Owen Paterson MP in a speech in November 2014 to make explicit note that these countries have similar “open doors” to immigration meaning, in Switzerland’s case, a far higher proportion of settled migrants than Britain experiences.

The incompatibility between these two themes is given scant airtime, perhaps because the individuals representing them are largely from the political Right so the media assumes they agree. But also because the large rise in immigration in the last of ten years and the corresponding rise of UKIP has brought such an exclusive focus to that issue and UKIP’s representation of it.

Plus the media is not very good at covering the EU beyond stories about bendy bananas. The issues on both the ‘No’ and ‘Yes’ sides are therefore rarely explored in detail.

Project approach

With the ‘No’ camp failing (so far) to agree a vision and objectives, agreement on a project approach seems doomed. However several approaches to support the incoherent vision have been advanced by different voices within the No camp. They can be labelled:

1. The Norway Option

2. The Swiss Option

3. The WTO Option

There are other options but these three are the leading definitions of how an EU exit might be done in practical terms.

The Norway option suggests an exit to the European Economic Area (EEA) which was originally viewed as a waiting room for countries moving towards fully membership. The EEA countries, of which Norway is the largest, are part of the single market and therefore have adopted the four freedoms. But they are not members of the EU — theirs is a trading position without the additional trappings of the EU’s gradual move towards political union. The option appears to have the support of Owen Paterson and Dr Richard North but is not supported by a series of Conservative voices in the No camp, nor is it supported by UKIP as it is seen as having no effect on immigration.

The Swiss option calls for a very bespoke relationship with the EU using the model of Switzerland. The country is in neither the EEA nor the EU, hence Switzerland’s relationship is based on a number of bilateral treaties built up over a number of years. This option’s most notable supporter is Daniel Hannan MEP. But it has been criticised as unrealistic within the timeframe for exit and perhaps even unavailable because the EU doesn’t like the existing Swiss arrangements and will refuse to agree to anything that looks like them.

The WTO Option is where a post-exit Britain would trade with the rest of the EU on WTO terms, specifically using the WTO’s “Most Favoured Nation” status. This option (and flavours of it) seems to have wider support among various Conservative groupings such as “Better Off Out”, “Business for Britain” and also (I believe) by UKIP. Despite its relative popularity among these groups, mostly because it is the option that delivers the highest degree of national independence, it has been criticised by Dr Richard North as fundamentally flawed, threatening to disrupt the UK’s trade with the mainland to a very significant degree.

It is not the purpose of this article to explore the pros and cons of these options and arguments but to note that for any one of these three options, one quickly finds it is deeply disliked by supporters of the other two options. That leads to the next main point…

Squabbling sponsors and stakeholders

This scarcely needs further elaboration after the lack of agreed vision, objectives and approach. There are clearly quite deep divisions among potential sponsors and stakeholders. This is quite extraordinary given that some voices have been calling for a referendum on EU membership for some time. It seems that now one is about to arrive, their lack of preparedness is being exposed.

Obviously none of this helps bring any clarity to an overall project to withdraw from the EU.

Nor does the fact that key partners, most notably the United States, want Britain to stay in the EU.

Lessons learned from the past

There is one obvious example this project can learn from, namely the 1975 referendum which asked the British electorate whether we should remain in the then EEC or leave.

I briefly highlight three features of that event:

1. The status quo effect (with some renegotiation) and its ability to sway votes

2. The character of the No campaign as representing the more extreme ends of the political spectrum

3. The heavy use of cost arguments by the No campaign

So far with the new approaching referendum:

1. Among some No players, there is apparently little recognition of the power of the status quo effect especially when combined with a “renegotiation” heavily sold to the electors by the UK government.

2. The character of the No campaign already looks like it could be seen as representing the more extreme ends of the spectrum, whether from Left or Right. Namely Owen Jones and UKIP.

3. Already endless and apparently unwinnable arguments are being made about the costs

In other words, while the two referendums will be different, there are signs that lessons have not been learned.

Priority

Opinion polls over many years have generally put the EU issue some way down the list of voters’ priorities. UKIP have tried to circumvent this by making the EU issue all about immigration which seems to be of greater concern to electors. However they have had very mixed success and have been perceived as flirting with racism — a point not lost on significant sections of the electorate. Despite several years of UKIP amplifying supposedly damaging headlines about immigration and also linking the issue to the EU, opinion polls over the last nine months suggest support for the EU within Britain is at a historic high. This is what some have termed “the Farage Paradox” (after the UKIP leader Nigel Farage) and it arguably comes down to the growing perception that UKIP is a party “unlike me” AND represents the No side in a referendum.

In other words the possibility of this being seen as a battle of “the centre ground versus UKIP” already seems to be developing in the public mind.

And on the question of priorities, the EU issue generally remains a low priority for most people, behind schools, hospitals, jobs and the economy.

Do Nothing

If people are less bothered about the EU as a priority in their lives then it makes any argument to radically change Britain’s relationship with the EU much harder to sustain. If the movement for withdrawal also appears to be a fringe opinion on the extremes of politics, perhaps even tinged with racism, then arguments for change become near-impossible to win and nor would they deserve to. In contrast, doing nothing and carrying on with EU membership seems the obvious and low-pain thing to do.

A project not even worth pursuing?

This is why any project to withdraw the UK from EU membership looks impossible to deliver. The onus is on the change-makers to make the case for change, in this case EU exit, and it seems we are a long way from such a case being coherently made.

Should the EU exit project therefore be abandoned?

Not quite.

Where politics are involved, nothing is ever certain. In particular, the ongoing Eurozone crisis may yet move the political tectonic plates such that EU exit looks more attractive. We also don’t yet know what will become of David Cameron’s renegotiation or how the result of it will be perceived. And of course there is the matter of the Yes side’s own arguments and issues.

There are therefore small slivers of light that could cause the No side to give the Yes side a run for its money but in my opinion, it would require a significant need to compromise and then have discipline within the No camp. It would also require a significant shift in perception among electors of what the No camp represents. If it does end up as a contest between centre ground liberal-minded folk versus UKIP then the centre ground — the Yes vote — will win. Perhaps dramatically.

A possible way forward

In trying to address this apparently hopeless cause, my first question would be: “What do the ultimate stakeholders — the electors — want out of all this?” Polls suggest Britons like the trade aspects of the EU — what older electors would say they thought they voted for in 1975. But they dislike the political union aspects — the steady march towards “a country called Europe” — and therefore dislike the impediments to sovereignty and national democracy.

So a possible alternative vision that could perhaps work is to focus on maintaining the trading status quo while withdrawing from political union and then presenting further advances towards political union as the major risk for the UK.

That would turn the tables on the status quo argument and would start making exit look closer to the status quo than the continuing journey towards full political union. To reinforce this, a further argument could be made that following a Yes vote, the journey towards an “unwanted” political union would be accelerated. And that may ultimately mean joining the euro as is still predicted by some in the Yes camp but currently rejected by the electorate.

The vision thus becomes something along the lines of “wanting a market called Europe not a country called Europe” and could realistically draw in support from people who presently think this can only be achieved as full EU members.

A look through all the Yes side’s early interventions on this subject since the general election reveals that many of their claims about what would happen if Britain left the EU are actually claims about what would happen if Britain left the single market. These would cease to be issues if the No side proposed to stay in the single market (like Norway and EEA countries) at the point of exit. In other words, the Yes side’s fox could be shot.

And so we move towards an approach of Britain staying in the EEA but giving up full EU membership — the Norway Option. This maintains all trade with the EU as though nothing had changed. Supply chains remain unaffected and market access is assured. It further allows Britain to set policy in other areas and to sign trade treaties with other non-EU countries, not least its old commonwealth partners.

It is argued that such an approach opens up the risk of Britain losing influence over the single market laws/standards that the country then becomes subject to. However that risk has diminished markedly in recent years as more and more trading laws/standards are made by global bodies and essentially handed down to the EU to pass on to member states. The difference being that those countries who are not EU members have their own seat at the global tables where such laws/standards are made, whereas EU members are represented by the EU’s common position. In that sense, leaving the EU could actually enhance influence.

But perhaps the acid test of the EEA’s benefits are the EEA members themselves. The two major members, Norway and Iceland, no longer have any intention of joining the EU.

One final thought on the way forward: exit is generally seen as a one-time event rather than a process. The event therefore becomes loaded with everything that every individual No campaign group wants to see happen, making the event an impossibly burdened and very fragile moment that’s doomed to fail under its own weight and contradictions. It is akin to scope overload.

Instead the No lobby would be well advised to make the whole concept of EU disengagement a longer-term programme. That would first mean giving up full EU membership status with the least possible fuss in order to meet that initial exit milestone. Then and only then making use of the new status outside the EU to consider other policy areas, one of which may be immigration.

All of that would require a plan.

Conclusion

There are still huge obstacles to such a project succeeding, not least because of the subject of immigration which will still exert some people and will be relatively unaffected by the EEA proposition above (which is why UKIP doesn’t like it). There is evidence however, courtesy of the “Farage paradox”, that UKIP has had the effect of poisoning the No side so one can fully understand why others now want to bypass UKIP. Also the public view of immigration is more nuanced than might appear at first blush.

Ultimately the economy and business are likely to be bigger factors in the electorate’s decision at a referendum, and consequently maintaining single market access is likely to trump everything else.

Of course, David Cameron could return with a renegotiation package that achieves a similar trade-only deal inside the EU. That could change the game again, but at the moment there is no sign of anything so radical even being discussed with the EU, never mind being agreed.

So at the moment my view is that the No camp’s best chance lies in:

1. Setting out a positive “Olympics vision” of an expansive global nation reaching out to and trading with the whole world after breaking out of the confines of the EU.

2. Including within that vision, a commitment to maintain our important relationships with the EU from outside.

3. Committing to continued access to the single market and the four freedoms after EU exit such that business continues unaffected. That would also extend to continuation of membership of certain programmes such as the Erasmus university scheme and others which already include other nations outside the EU.

4. Setting out a strategy for other policy objectives beyond the point of exit, perhaps extending many years into the future.

All of this would mean rejecting the immigration politics of UKIP….or addressing the immigration point once exit has taken place using a series of measures not prevented by single market membership but which reduce so-called “pull factors” — things that attract migrants specifically to Britain. Indeed it is my opinion that the No side’s strategic choice for the referendum campaign may boil down to a very binary one: propose to maintain single market access or propose to introduce tight immigration controls. It’s pretty clear to me which one would win majority support.

So yes it would still be a very tough project with a high risk of failure and I remain sceptical that it can succeed.

But sort out the vision, objectives and approach along with a business case, a plan, and better attention to what stakeholders really want and the project might yet make some headway.

But in project management, isn’t that stuff usually the answer anyway?

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