Referendum on EU membership central to Tory manifesto

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You can now add exit to most things to make a headline.

We have Grexit for Greece leaving the eurozone, which the European Commission has been falling over itself to prevent for political rather than economic reasons. The other popular phrase, now that the Conservatives have a majority, is Brexit – the prospect of the UK leaving the EU if the prime minister, David Cameron, fails to secure the changes he wants from his fellow EU leaders.

A referendum on EU membership was central to the Conservative manifesto, and the euro-sceptics on the back benches will not allow this to slip down the agenda. The odds favour the UK staying. Bookmakers are giving the better odds for a yes vote, and polls suggests there is a more solid majority for a yes than a no at this stage – although a good third of voters are open to persuasion either way. However given the accuracy of the polls in the run up to the general election the bookmakers’ odds are probably more accurate – and there are a lot of politics to be played out between now and late 2017, when a vote is likely to take place.

If I were putting my money on a result it would be on the UK staying in the EU, and by a margin of up to ten percentage points. That is based on people’s natural reluctance to change, and a sense that David Cameron will do a reasonable deal in Europe, given that the election has made him a much stronger leader for the negotiations. What he gets might be more down to smoke and mirrors than real change – but that will probably be enough. While they may not say it publicly, a lot of other European leaders agree that the EU needs change and greater budget discipline.

Brexit has become one of those issues journalists raise when that cannot think of anything more sensible to ask farmers. This is an area where farmers may have different personal and business views, but ultimately they are more likely to vote with their heads than their hearts. A yes vote would take one uncertainty out of the equation. In a volatile and uncertain farming world that would be welcome, regardless of their personal views on Europe. A no vote would be a surprise, and after the shock wore off farmers in every part of the UK would have to get used to a different farming world – and one where it is hard to see new supports delivering as well, in terms of income, as is the case with the CAP now.

Supporters of the no vote will counter that by saying that a UK government out of the EU would be contributing less to Brussels, and so could afford to continue supporting agriculture. That is true, but what farming would lose would be the link to the demands of the pro-farming and pro-CAP member states, like Ireland and France, that over the years have helped deliver a good deal for farmers. The loss of some of the red tape of the CAP would certainly be welcome, but the no campaign would have to make clear what support mechanism they would advocate. If this came in the shape of an expanded agri-environment scheme it might not deliver the same outcome as the direct payments system. That is something farmers will need to weigh up before a referendum. The other argument is that by 2017 we will be looking ahead to a new CAP reform after 2020, and the likely shape of that new CAP will become part of the debate.

Supporters of the yes vote make much of the EU being the UK’s biggest export market for food, and that is certainly true. The Single Market – and 50 years of peace for the first time between European countries – are the big achievements of the EU. The CAP, for all the money spent on it, has not been one of the spectacular successes, but it has protected farm incomes. Outside the EU the UK would join the European Free Trade Area (EFTA) which would give it largely tariff free access to the EU, and the EU access to the UK. This would not be quite the same as the Single Market, but would make Brexit less earth shattering than feared. However for now this is a good subject for a knockabout debate – but the real debate and real issues for agriculture are still a long way off.