Last week the Constitution Unit’s Independent Commission on Referendums published a report with over 70 recommendations for improving the rules by which referendums are conducted in the United Kingdom. One of the proposals was that ‘significant government preparation for implementing the outcome of a vote for change in a referendum is necessary’.
There had been some limited contingency planning ahead of the referendum in 2016. One month before the vote George Osborne confirmed, after previously denying the Treasury’s involvement, that his department was working with the Bank of England to develop contingency plans to counter ‘extreme volatility’ in the event of Brexit. Although some of the Treasury’s analysis was published, the full extent of the government’s contingency planning remains unknown. What is clear is that the UK is now several Cabinet resignations, two years and one general election since the referendum, and the government appears to lack a strategy for coping with the uncertainty that has persisted since 23 June 2016.
Recent history tells us about the importance of contingency planning. On 5 June 1975, the United Kingdom went to the polls in its first-ever national referendum. On that day 67 per cent of voters said ‘yes’ to staying in what was then called the European Community (EC), on a turnout of 65 per cent. The story of Prime Minister Harold Wilson’s arrival in Downing Street in March 1974, and his pledge to hold a ‘fundamental renegotiation’ of Britain’s EC membership followed by a national vote on the outcome, is well known. Yet a lesser-known aspect of that story is ways in which civil servants prepared for the possibility that the public might vote ‘no’. Those preparations took place despite the fact that during the three months leading up to the vote, ‘yes’ consistently led in opinion polls.
When Wilson was asked whether the government was considering the possibility that the public might be in favour of withdrawal, he stated that the government ‘are naturally considering the implications’. In Wilson’s view, it was natural to be prepared to implement a major change in policy.
Officials were not optimistic about Britain’s future outside the Community. Referring to European Free Trade Association (EFTA), the Commonwealth and the United States, officials concluded that there was ‘no obvious economic grouping of equivalent importance to the [EC] which the United Kingdom could join on withdrawal’. This ominous prediction made contingency planning all the more important.
If the public did vote ‘no’, officials advised that the government needed to be prepared to act in three areas. First, Wilson would need to make a statement in Parliament and secure the endorsement of the referendum result from MPs.
Secondly, in a perfect world, Britain would ‘negotiate withdrawal and future arrangements as one smooth operation’. Yet some of the anti-Market Cabinet ministers had indicated that Britain should leave by 1 January 1976, a mere six months after the referendum. Therefore, officials assumed that ‘the negotiation of a permanent future trading relationship would have to be completed after’ a Treaty of Withdrawal was concluded (there was at the time no Article 50). The strategy for negotiating this and the attitudes of the other member states, particularly Ireland, which would face ‘special problems’, could not be predicted.
Finally, the government would need to be prepared to fulfil its budgetary responsibilities at least until the end of the year, assuming withdrawal could be negotiated by 1 January 1976.
Officials acknowledged that their plans were limited and incomplete. If the public did indeed vote ‘no’, there would need to be further consideration given to domestic legislation and detailed negotiating objectives. Much could not be predicted.
Ultimately, of course, the contingency plans were consigned to The National Archives. Wilson’s only comment on the final report of the contingency planning exercise was ‘Thank you. Not read!’. As the saying goes, the best-laid plans often go awry, and it may well have been the case that the government would have found its plans ill-suited to the reality of a withdrawal from the Community. And yet, there are important lessons.
Ministers and officials were aware of the political sensitivity of their work. It was for this reason that the contingency plans were kept under a strictly limited circulation. Officials feared that a discussion in Cabinet of the implications of withdrawal might create ‘more questions than it answered’. Furthermore, they worried that it would be ‘difficult to produce a report, however hard we try, which will not appear biased towards Community membership in the eyes of those who would prefer us, whatever the outcome of the renegotiation, to leave’.
Yet they also believed it to be natural, sensible and in the public interest for the government to be prepared for either possible outcome in the referendum. For officials, this was one motivation behind the decision to begin contingency planning even before the outcome of the February 1974 General Election was clear. Officials feared that, if a Labour government was elected and subsequently took Britain out of the EC, ‘the United Kingdom would find itself back in the situation from which we escaped by joining. It would be the Community which would carry weight in discussions … on economic, monetary and, in time perhaps, even political matters’. Contingency planning was later endorsed by ministers because of the need to have a full understanding of the policy-making changes that would result from a ‘no’ vote.
Importantly, the contingency planning exercise began before the decision to hold a referendum was announced, thereby ensuring that officials and ministers were aware of the challenges that might lay ahead. If the UK is to hold referendums in the future, governments need to be prepared to implement the outcome, whatever it may be. Thus, the kinds of preparation that took place in 1975 should be legitimised as both a practical and necessary and exercise in policy-making. This would help ensure that the government is informed about the risks of a referendum, before asking the public to vote. Furthermore, it would contribute to mitigating the uncertainty that can result from implementing major changes in public policy.