Cameron's referendum gun is firing blanks

The Prime Minister cannot negotiate effectively in Brussels and give his MPs what they want at the same time

David Cameron’s position on whether there should be a referendum on Britain’s membership of the European Union is an entirely rational one. That isn’t to say he is doing the right things at European summits or has the right policy. It is simply an observation about the tricky position he is in, having to negotiate simultaneously in Brussels with fellow heads of government and in Westminster with his own party.

The two sets of demands are incompatible. In Brussels, the Prime Minister wants to influence the evolution of European institutions as they adapt to the single currency crisis. He needs to preserve British influence without signing up to any more political or economic integration. That balancing act gets harder when his continental counterparts think the UK is determined to sabotage their efforts and is, in any case, striding towards the exit. That is precisely the message that would be transmitted by a premature commitment to a referendum regardless of what comes out of current negotiations.

Tory Eurosceptics, meanwhile, argue that the prospect of a referendum will focus the minds of the PM and the rest of the EU, making it clear that the final deal has to be a good one for Britain ...or else. That view rests on the uncertain premise that other European countries desperately want to avoid a British exit. Diplomatic patience with the UK is running thin. Besides, seasoned observers of the Tory right (at home and abroad) recognise that the end game for many MPs is exit no matter what concessions are wrung from Brussels. Why should Angela Merkel or François Hollande offer David Cameron favours on the basis that it might help him control his party and buy a renewed mandate of the UK’s EU membership when they know perfectly well that it won’t?

But Cameron can’t simply tell his party to shut up and wait and see what he has negotiated before demanding a referendum. Tory MPs don’t trust his pledges on Europe and want some indication that the plebiscite they crave will materialise. So he has to indicate that he recognises the need for a vote without actually stating that there will definitely be one. Britain’s membership of the EU really ought to be ratified by a national vote but there isn’t much point asking the question until the terms of that membership are settled and they are now, thanks to uncertainty over the single currency, in flux. That is Cameron’s position and, as I say, it is reasonable given the political constraints he is under.

The most aggressively eurosceptic section of the Tory party, however, is minded to be unreasonable. I don’t mean that in the pejorative sense of ‘irrational’. I mean their patience has run out and they don’t want excuses. They feel Cameron has been given the benefit of the doubt on Europe in the past and has been flaky on the subject. (In fact he has been extraordinarily accommodating.) His promises to deliver something – maybe - at an unspecified point in the future are worthless currency in the Conservative ranks.

There is no great diplomatic advantage in sounding off about a referendum; if anything it weakens Britain’s negotiating position. Nor does the vague promise of a referndum do very much for non-aligned voters with other things on their minds. So the only point of even talking about a vote is as a gesture to the Ukip-leaning tendency and the only gesture that will satisfy them – a clear irreversible commitment to an in/out question - is one the Prime Minister cannot make. It is, in political terms, as if Cameron has pulled out a gun to look all macho eurosceptic when everyone knows he is firing blanks.

David Cameron "can’t simply tell his party to shut up and wait and see". Photograph: Getty Images.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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Brexit will hike energy prices - progressive campaigners should seize the opportunity

Winter is Coming. 

Friday 24th June 2016 was a beautiful day. Blue sky and highs of 22 degrees greeted Londoners as they awoke to the news that Britain had voted to leave the EU.  

Yet the sunny weather was at odds with the mood of the capital, which was largely in favour of Remain. And even more so with the prospect of an expensive, uncertain and potentially dirty energy future. 

For not only are prominent members of the Leave leadership well known climate sceptics - with Boris Johnson playing down human impact upon the weather, Nigel Farage admitting he doesn’t “have a clue” about global warming, and Owen Paterson advocating scrapping the Climate Change Act altogether - but Brexit looks set to harm more than just our plans to reduce emissions.

Far from delivering the Leave campaign’s promise of a cheaper and more secure energy supply, it is likely that the referendum’s outcome will cause bills to rise and investment in new infrastructure to delay -  regardless of whether or not we opt to stay within Europe’s internal energy market.

Here’s why: 

1. Rising cost of imports

With the UK importing around 50% of our gas supply, any fall in the value of sterling are likely to push up the wholesale price of fuel and drive up charges - offsetting Boris Johnson’s promise to remove VAT on energy bills.

2. Less funding for energy development

Pulling out of the EU will also require us to give up valuable funding. According to a Chatham House report, not only was the UK set to receive €1.9bn for climate change adaptation and risk prevention, but €1.6bn had also been earmarked to support the transition to a low carbon economy.

3.  Investment uncertainty & capital flight

EU countries currently account for over half of all foreign direct investment in UK energy infrastructure. And while the chairman of EDF energy, the French state giant that is building the planned nuclear plant at Hinkley Point, has said Brexit would have “no impact” on the project’s future, Angus Brendan MacNeil, chair of the energy and climate select committee, believes last week’s vote undermines all such certainty; “anything could happen”, he says.

4. Compromised security

According to a report by the Institute for European Environmental Policy (the IEEP), an independent UK stands less chance of securing favourable bilateral deals with non-EU countries. A situation that carries particular weight with regard to Russia, from whom the UK receives 16% of its energy imports.

5. A divided energy supply

Brexiteers have argued that leaving the EU will strengthen our indigenous energy sources. And is a belief supported by some industry officials: “leaving the EU could ultimately signal a more prosperous future for the UK North Sea”, said Peter Searle of Airswift, the global energy workforce provider, last Friday.

However, not only is North Sea oil and gas already a mature energy arena, but the renewed prospect of Scottish independence could yet throw the above optimism into free fall, with Scotland expected to secure the lion’s share of UK offshore reserves. On top of this, the prospect for protecting the UK’s nascent renewable industry is also looking rocky. “Dreadful” was the word Natalie Bennett used to describe the Conservative’s current record on green policy, while a special government audit committee agreed that UK environment policy was likely to be better off within the EU than without.

The Brexiteer’s promise to deliver, in Andrea Leadsom’s words, the “freedom to keep bills down”, thus looks likely to inflict financial pain on those least able to pay. And consumers could start to feel the effects by the Autumn, when the cold weather closes in and the Conservatives, perhaps appropriately, plan to begin Brexit negotiations in earnest.

Those pressing for full withdrawal from EU ties and trade, may write off price hikes as short term pain for long term gain. While those wishing to protect our place within EU markets may seize on them, as they did during referendum campaign, as an argument to maintain the status quo. Conservative secretary of state for energy and climate change, Amber Rudd, has already warned that leaving the internal energy market could cause energy costs “to rocket by at least half a billion pounds a year”.

But progressive forces might be able to use arguments on energy to do even more than this - to set out the case for an approach to energy policy in which economics is not automatically set against ideals.

Technological innovation could help. HSBC has predicted that plans for additional interconnectors to the continent and Ireland could lower the wholesale market price for baseload electricity by as much as 7% - a physical example of just how linked our international interests are. 

Closer to home, projects that prioritise reducing emission through tackling energy poverty -  from energy efficiency schemes to campaigns for publicly owned energy companies - may provide a means of helping heal the some of the deeper divides that the referendum campaign has exposed.

If the failure of Remain shows anything, it’s that economic arguments alone will not always win the day and that a sense of justice – or injustice – is still equally powerful. Luckily, if played right, the debate over energy and the environment might yet be able to win on both.

 

India Bourke is the New Statesman's editorial assistant.