Why was anyone surprised? Iceland is a wealthy and successful country. It had nothing to gain from joining the declining EU.

A country with a proud and ancient parliamentary tradition does not lightly submit to a supranational technocracy. The nation with perhaps the best-managed fish stocks in the world does not surrender to a bloc that has drained its own seas.

Icelanders have voted by 52.8 per cent to 47.2 per cent not to restart accession negotiations with the EU. They made their first application in 2009, in the wake of the banking crash, which hit Iceland hard. 

But they dropped it in 2015, once it had become clear that Iceland had recovered from the financial crisis much faster than the EU had, largely because it was wise enough not to bail out its banks.

I was never in any doubt about the outcome. I know Iceland well, having been a regular visitor to that strip of cold black tundra since I was 19. I count the leaders of the 'No' campaign as good friends and I see the country as a second home.

I have stood many times at the site of their first parliament, the Thingvellir. Icelanders used to gather there from all over the island, riding their sturdy little horses over black lava fields and bright green moss, meeting as a free people.

They are unlike us in some ways. Few of them have surnames, they build their roads to avoid elf-mounds – said to be the dwellings of magical beings – and their language has barely changed in 1,000 years. But they resemble us in their stubbornness.

They hate being told what to do, especially by foreigners.

I was unusual in predicting a 'No'. Opinion polls showed a narrow but consistent lead for the pro-EU side and, as the votes came in, wide-eyed Europhiles, buoyed by early results from Reykjavik, were getting excited.

Why? Because, deep down, they think European integration is inevitable, in the same way Marxists used to believe that socialism was inevitable. Take away the sense of inexorability and the flaws become painfully visible.

There is scant enthusiasm for EU membership other than among the impoverished states of south-eastern Europe, such as Montenegro, Macedonia and Moldova. Even Turkey has lost interest in joining. In Norway, polls suggest that opposition to membership has risen to around 70 per cent.

In these countries, EU membership is seen purely in cost-benefit terms. In Britain, a decade on from the 2016 referendum, it remains a culture war. A knot of Continuity Remainers who don't know or care much about what is happening in the EU, are still obsessed with overturning our own referendum result.

Why? Because, for them, it is less about the EU than about defeating an imagined domestic enemy, a caricatured racist.

They have stuck to their rejoinery for a decade, despite the EU adopting much harsher immigration laws than Britain, because they are anti-Eurosceptic rather than pro-Brussels.

It is true that Iceland has a closer relationship with the EU than we do. Membership of the European Economic Area means that it is in the single market for everything except agriculture and fisheries – though, importantly, Iceland is outside the customs union and has signed several trade deals that the EU does not have, including with large economies such as China and Indonesia.

There is an argument for Britain moving closer to the single market. But it needs to be done in a ruthlessly calculating manner, signing up for things only when there are clear mutual benefits rather than approaching talks in a spirit of penitence and atonement. Sadly, as the reaction here to Iceland's welcome decision shows, we are a long way from that.

Still, the question remains. If a nation with a population the size of Croydon's is content to take its chances alone, what are we so scared of?

• Lord Hannan of Kingsclere is an independent peer and director of the Institute of Economic Affairs.