When you say this is about identity, how is that different from people saying this is about immigrants? Not to mention the absurdity of the notion that the EU has anything to do with this; national identities haven’t been erased in the many years since the EU have been founded and they’re unlikely to be so any time soon. Quite the contrary, in fact.
As for the sovereignty issue, there’s no question that many people use it as a shield for racism. That’s always been the case; nationalism and racism have been constant bed-fellows pretty much since the former movement started. But I won’t discount that there are people who see this as a serious problem, disassociated from other concerns. I’m just not particularly impressed with it, because it’s a stupid argument, born from a fundamental lack of understanding of the complex balancing act that the EU performs.between being a federation and an international organization.
Unfortunately, it’s also always going to be an easy argument for Brexiters, because it’s always going to be easier to cry “Oh, they’re taking away our freedom” than to explain the ways in which a highly complicated system like the EU has been constructed in order to balance national sovereignty with cooperation. Cooperation requires give and take. Unfortunately, people no longer seem to understand this, it feels like (also exemplified by people’s attraction to Trump’s simplistic and utterly stupid zero-sum deal-making).
Of course, it also doesn’t help that many Remain politicians spent most of their career blaming the EU for all their own failures at every opportunity (while taking credit for themselves for all benefits the EU brought). This is unfortunately a common failing of national politicians throughout Europe, and fuels a huge amount of anti-EU sentiment.
But as I’ve said a couple of times, I’m interested in seeing the reaction in the UK once they’re out, and the EU no longer has to coddle British sensibilities. Because the fact is that the UK government will end up spending even more time implementing directives from the EU after Brexit than before. Industry and services still needs to follow EU regulations to export to the EU. Government agencies still need to cooperate with their colleagues in the EU. The only difference post-Brexit, is that no one is going to really care what the UK thinks about those regulations once they’re out.
As many political scientists have pointed out, standing outside the EU while being a part of Europe gives you less sovereignty - not more. The UK government will inevitably find itself in the same unenviable situation as Norway is in - unable to exert real influence, but equally unable (due to domestic politics) to actually do the sensible thing and (re)join.
But at least anti-EU politicians will have a handy scapegoat to blame for all domestic ills for decades to come.