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Nigel Farage, self-styled leader of Britain’s “people’s revolution” against the EU, always believed this could happen. “Everything could change if there’s an incident — an event,” he said, holding court with a pint of English ale outside the Westminster Arms last month. This was not what the UK Independence party leader had in mind.

For months, Eurosceptics have claimed that a major “event” in the run-up to Britain’s historic EU referendum on June 23 could swing the vote. They meant a big upsurge in Europe’s refugee crisis or a possible Islamist attack, pouring fuel on public fears about immigration.

Instead it was the murder of a young Labour MP, Jo Cox, that transformed the contest. Cox, stabbed and shot in her Yorkshire constituency last week, had campaigned for refugees and for Britain to stay in the EU. Her alleged killer was a white man with links to far-right groups. Thomas Mair gave his name in court as “Death to traitors, freedom for Britain”.

The murder put the brakes on a Leave campaign that had focused relentlessly on immigration and which — according to polls — was surging towards victory on Thursday, a result with profound consequences for European unity.

“We had momentum until this terrible tragedy,” Mr Farage said. Pollsters and academics argue that Cox’s murder may not directly sway the way people vote, but it fundamentally changed the dynamics and terms of debate as it entered its final stages.

David Cameron, in the fight of his political career, retweeted an article written by Cox supporting EU membership and his campaign issued a poster appealing to the British sense of fair play. “Remain kind, remain open, remain inclusive, remain tolerant, remain together. Vote Remain.”

Both sides still say the result is too close to call. Turnout will be key, as Mr Cameron turns to the data models produced by Jim Messina, who ran Barack Obama’s 2012 campaign, to galvanise supporters repelled by the strident anti-immigrant tone adopted by some in the Leave camp.

In City of London trading rooms, news of Cox’s murder was viewed as a turning point. The cold calculations of traders in the currency markets pushed the pound sharply up last Thursday. The rally continued into Monday as expectations of a Remain vote grew.

“There’s been a significant shift in the odds back towards Remain,” says Matthew Shaddick at Ladbrokes, the bookmaker. “The picture certainly looks significantly different to last Monday.” Although the polls are tight, Ladbrokes’ odds now imply a 73 per cent chance of Britain voting to stay in the EU.

Immigration has always been the Leave campaign’s strongest theme, but also a fundamental weakness. Until last week’s events it was a phenomenal success, spreading alarm among the Westminster elite, which largely favours a Remain vote on Thursday.

‘Predictably catastrophic’

At the start of last week, MPs campaigning for Britain to stay in the EU gathered in gloomy huddles at Westminster, shrugging their shoulders in disbelief.

“I went to seven school fetes at the weekend and the mood at each one was overwhelmingly for leaving,” says one pro-Europe Labour MP from a prosperous London seat, supposedly an In stronghold. “Only the nannies were in favour of staying in — and they can’t vote.”

Mr Cameron’s decision to commit Britain’s future to a referendum — an attempt to finally settle his party’s 30-year Euro-neurosis — looked like a reckless gamble. Polls early last week were consistently putting the Leave side ahead by margins of six, seven, eight points or more.

“We will deal with whatever the British public throw at us,” said one member of the Cameron team. The careers of the prime minister and his chancellor George Osborne appeared numbered. “Predictably catastrophic,” Ken Clarke, the former Tory chancellor, was heard telling a Cameron aide last week.

Many Tory members of parliament believe a defeat for Mr Cameron would signal the end of his six-year tenure at Number 10. Mr Clarke said recently the prime minister “wouldn’t last 30 seconds” if voters supported Brexit.

When Mr Cameron announced his plan in 2013 to hold a referendum, he was confident he could make an economic case for Britain staying in the EU that would trump all other arguments. A campaign focused on the economy saw off the threat of Scottish independence in 2014 and helped Mr Cameron back into Downing Street last May.

But since then, populism and identity politics have taken hold across the world. Jeremy Corbyn, the leftwing opposition Labour leader, and Bernie Sanders, his US Democratic equivalent, have energised young voters with anti-establishment campaigns that have challenged economic orthodoxy. Marine Le Pen of France’s National Front and Donald Trump, the presumptive Republican nominee, have found success in running against elites and immigrants.

In each case, these leaders have connected with voters who feel they have been abandoned. “We want our country back”, is the successful slogan adopted by Ukip’s Mr Farage and repeated on the streets of forgotten towns and faded seaside resorts, even those where immigrants are rare.

Britain’s 2016 EU referendum is therefore not just a debate about the country’s place in the world, but a struggle between a traditional economic argument and a campaign based on populist assertions and identity, notably the issue of immigration. Or, as the Leave side would put it: “The Establishment versus the People.”

The EU is seen as the ultimate establishment — remote, run by obscure bureaucrats and politicians, incomprehensible to many Britons. For the first part of the campaign, Mr Cameron successfully mobilised the global establishment to defend Britain’s membership in it.

An alphabet soup of bodies — the IMF, WTO, OECD, G7, G20 — lined up to say Britain would suffer economically if it left the EU. World leaders from the US, China and India — Mr Obama, Xi Jinping and Narendra Modi — visited London and offered reminders of the wisdom of remaining part of the globe’s biggest trading bloc. Big business was corralled into the Remain corner.

Brexiters find their focus

It worked well for a while. Dire predictions of the economic consequences of Brexit disoriented the Leave campaign, forcing the pro-Out minister Michael Gove to admit that Britain might join a free-trade zone along with a host of non-EU countries in the Balkans — immediately dubbed “the Albanian model” by detractors. “If we win, that will turn out to be the defining moment of the campaign,” says Roland Rudd, treasurer of the Stronger In campaign.

But then something happened. The Treasury began to produce suspiciously precise official forecasts on the consequences of Brexit — including a suggestion last month that house prices could fall by 18 per cent and that the economy would go into a “DIY recession”. Some in the Remain camp muttered that the claims stretched credibility; Mr Corbyn, a lukewarm Remain supporter, accused the Treasury of “scaremongering”.


UK’s EU Referendum: How people would vote

For a more detailed summary of opinion polling visit the FT’s Brexit poll tracker page


The media tired of the relentless exchange of spurious statistics and looked for another story. And the Leave camp simply dismissed the attacks as “Project Fear”, put about by a self-interested few and discredited “experts”.

“It feels like the establishment — the banks, big business, international organisations — lined up on one side and the people were on the other,” said Chris Grayling, the pro-Brexit cabinet minister.

“We should have been crushed like bugs,” admitted Dominic Cummings, the mercurial director of the Leave campaign. Instead, the economic barrage lifted, the pro-Brexit camp emerged from its bunker and then launched a counter-attack based on a promise to cut immigration.

Mr Cummings, a “liberal Leaver” who wants Britain unshackled from Brussels’ regulation, recognised his side was losing on the economy. He also admitted that working-class voters would not react well to Tory Eurosceptics telling them they would be better off without EU rules such as workplace rights.

Mr Cummings discovered — to his surprise — that immigration galvanised a broad swath of voters, many of whom blamed the net 330,000 inflow of migrants for their own stagnant wages, unaffordable housing, an inability to get a school place for their child or a doctor’s appointment.

“People don’t understand the EU,” says a senior Leave campaigner. He explained that complex issues had been boiled down to a message about immigration and British money sent to Brussels, brought together by Mr Cummings’s devastatingly simple catchphrase: “Take control.”

According to Remain campaign insiders, Craig Oliver, Mr Cameron’s press chief, refused to let Tory ministers go on television to tackle immigration, fearing that even talking about the subject would play into the opposition’s hands.

As the polls started to narrow in the last week of May, an air of panic began to descend on the Remain camp. Mr Cameron cancelled a cabinet meeting in order to host an impromptu rooftop press conference in which he in effect called his pro-Brexit cabinet colleagues liars.

Mr Cameron then authorised a concerted attempt to discredit the former London mayor Boris Johnson, the Old Etonian son of a Eurocrat who has become an unlikely leader of the people’s revolt against the EU, claiming he was an opportunist bent only on becoming prime minister.

“The prime minister needs to be more statesmanlike,” complained one normally supportive pro-Remain minister. “It’s a bit like 1945 in the bunker with Eva Braun and the revolver.”

Exit door

By the middle of last week, the consequences of the Leave campaign’s focus on immigration became glaringly apparent: working-class Labour supporters were flocking to the Brexit door. “Last week 100 per cent of our lost voters were non-Tories,” says one Remain campaigner. A Labour MP said: “Our activists don’t want to go to some areas because the reception is so hostile.”

By the time Mr Osborne appeared last Tuesday to claim he would have to introduce £30bn of spending cuts and tax rises in a “Brexit Budget” to rectify the effects of a Leave vote, the panic seemed to be in full swing.

Out campaigners still believe powerful global currents will propel them to victory. “At what point do we recognise that the anti-establishment mood is real and international?” asks James Cleverly, a former army officer and pro-Brexit Tory MP. “You can roll out clever people, rich people, sometimes foreign people — Barack Obama, [IMF chief] Christine Lagarde — and it’s white noise to many Brexit voters.”

But running in the opposite direction is the political force that has determined elections across the world for generations and which Messrs Cameron and Osborne still think will prevail: economic self-interest.

In the days before Cox’s murder YouGov was already picking up evidence of a “flight to the status quo” and an increase in support for Remain, with 33 per cent of voters saying they feared Brexit would make them worse off, up from 23 per cent a fortnight earlier, suggesting Mr Osborne’s warnings of financial disaster were cutting through.

Meanwhile, the death of the Labour MP in the small town of Birstall provoked a debate about whether the tragedy was in some way linked to the strident tone of the debate on immigration by some Leave campaigners — a reminder that the issue was both a strength and a potential flaw in the Brexit campaign strategy.

Mr Farage was forced to defend a Ukip poster depicting a crowd of desperate Syrian refugees in Slovenia that carried the slogan “Breaking Point”. Mr Gove, a pro-Brexit Tory MP and a friend of Mr Cameron’s, admitted that he “shuddered” when he saw it.

Mr Cummings feared from the outset that a campaign based on immigration would principally appeal to those who had already decided to vote Leave and repel undecided voters who were more likely to respond to economic arguments. Until Cox’s murder, the polls suggested he had been wrong.

John Curtice, a veteran pollster, believes Cox’s death will have an impact on the final vote that “approximates to zero”. But in terms of the dynamics of the campaign, the tragedy halted the momentum towards Brexit, put Leave on the defensive on immigration and allowed Mr Cameron to posit the idea that a vote to Remain was a vote for a more open, kinder Britain.

The prime minister has always believed that the economy will prove to be the winning issue, just as it has always been, but he is facing an anti-establishment hurricane that is raging far beyond Britain. Anxious politicians from across the world will pore over the outcome of Thursday’s vote. And Mr Cameron’s goal of settling the argument over Europe — both within Britain and his own party — may be unattainable, even with a Remain victory.

One of Mr Cameron’s senior campaign advisers admits the referendum could turn electoral orthodoxy on its head and that this time the economic arguments may not be enough.

He does not think Britain will vote to leave the EU, but he admits no one can be sure any more. “Can I tell you hand on heart it won’t happen? No, I can’t.”

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