Cameron's heart clearly isn't in Europe

The Prime Minister knows Britain is economically dependent on the eurozone, but he finds emerging ma

 

One of the more revealing passages in David Cameron’s speech on the economy yesterday was the section in which he talked about global trade.

When the Prime Minister talks about Europe and the eurozone, he exudes frustration and impatience. He would like to lead a discussion in Brussels about the kinds of reforms - liberalisation and widening the single market – that he believes are the prerequisites for growth. He must also know that building the alliances required to achieve those reforms and getting them approved by every EU member state will be diplomatic torture. Besides, there is still the small matter of the eurozone crisis to be resolved. A new digital services directive is not at the top of most European leaders’ priority lists. Cameron has no natural interest in or affection for the process of getting deals done in Europe and it shows.

By contrast, when he talks about the opportunities for British exports outside Europe he sounds almost evangelical. He talks about “coalitions of the willing” to press ahead with free trade deals. In Europe, he sees crisis, elsewhere he sees opportunity:

The globalisation of demand means new countries demanding our products, fuelling new jobs at home. If we make the most of this, there is a huge opportunity to secure a great future for our country. And that is why as we get through crisis, I believe we can look ahead with confidence.

In an essay for the magazine this week I mention the attention paid in Downing Street to arguments about the long term growth potential in Asia and Latin America as offering a potential alternative source of economic engagement to Europe. This “networked world” thesis – the idea that proximity should not be the arbiter of trade preferences - is a favourite of ultra-sceptics in the Tory party. It is generally dismissed by pro-Europeans as a fantasy that pays no heed to geography, history, culture or diplomacy. Eurozone trade was the only thing that stopped the UK from going into recession last year. Europe is the market of existential importance to our economy. And, crucially, there is no reason why the EU should allow Britain to retain all of its current trade privileges, while opting out of the various aspects of economic and political integration Tory sceptics happen to dislike. The scenario where we retain free access to the single market while unburdened/unprotected by EU regulation is a fantasy.

But I sense a growing suspicion at the very top of the Conservative party that the EU might be (a) in decline and (b) incapable of reform. One Downing Street advisor complained to me recently that Britain would have a much better bilateral trade deal with India if we weren’t shackled by the need to negotiate as part of the EU.

Current political and diplomatic reality demands constant engagement with Europe. But it is easy to imagine Cameron at a G8 or G20 summit feeling more and more irritated by his entanglement with the eurozone and contemplating that little bit more seriously the cost-benefit analysis of the UK going it alone. 

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

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The Conservative-DUP deal is great news for the DUP, but bad news for Theresa May

The DUP has secured a 10 per cent increase in Northern Ireland's budget in return for propping up the Prime Minister.

Well, that’s that then. Theresa May has reached an accord with the Democratic Unionist Party to keep herself in office. Among the items: the triple lock on pensions will remain in place, and the winter fuel allowance will not be means-tested across the United Kingdom. In addition, the DUP have bagged an extra £1bn of spending for Northern Ireland, which will go on schools, hospitals and roads. That’s more than a five per cent increase in Northern Ireland’s budget, which in 2016-7 was just £9.8bn.

The most politically significant item will be the extension of the military covenant – the government’s agreement to look after veterans of war and their families – to Northern Ireland. Although the price tag is small, extending priority access to healthcare to veterans is particularly contentious in Northern Ireland, where they have served not just overseas but in Northern Ireland itself. Sensitivities about the role of the Armed Forces in the Troubles were why the Labour government of Tony Blair did not include Northern Ireland in the covenant in 2000, when elements of it were first codified.

It gives an opportunity for the SNP…

Gina Miller, whose court judgement successfully forced the government into holding a vote on triggering Article 50, has claimed that an increase in spending in Northern Ireland will automatically entail spending increases in Wales and Scotland thanks to the Barnett formula. This allocates funding for Wales, Scotland and Northern Ireland based on spending in England or on GB-wide schemes.

However, this is incorrect. The Barnett formula has no legal force, and, in any case, is calculated using England as a baseline. However, that won’t stop the SNP MPs making political hay with the issue, particularly as “the Vow” – the last minute promise by the three Unionist party leaders during the 2014 independence referendum – promised to codify the formula. They will argue this breaks the spirit, if not the letter of the vow. 

…and Welsh Labour

However, the SNP will have a direct opponent in Wales. The Welsh Labour party has long argued that the Barnett formula, devised in 1978, gives too little to Wales. They will take the accord with Northern Ireland as an opportunity to argue that the formula should be ripped up and renegotiated.

It risks toxifying the Tories further

The DUP’s socially conservative positions, though they put them on the same side as their voters, are anathema to many voters in England, Scotland and Wales. Although the DUP’s positions on abortion and equal marriage will not be brought to bear on rUK, the association could leave a bad taste in the mouth for voters considering a Conservative vote next time. Added to that, the bumper increase in spending in Northern Ireland will make it even harder to win support for continuing cuts in the rest of the United Kingdom.

All of which is moot if the Conservatives U-Turn on austerity

Of course, all of these problems will fade if the Conservatives further loosen their deficit target, as they did last year. Turning on the spending taps in England, Scotland and Wales is probably their last, best chance of turning around the grim political picture.

It’s a remarkable coup for Arlene Foster

The agreement, which ticks a number of boxes for the DUP, caps off an astonishing reversal of fortunes for the DUP’s leader, Arlene Foster. The significant increase in spending in Northern Ireland – equivalent to the budget of the entirety of the United Kingdom going up by £70bn over two years  – is only the biggest ticket item. The extension of the military covenant to Northern Ireland appeals to two longstanding aims of the DUP. The first is to end “Northern Ireland exceptionalism” wherever possible, and the second is the red meat to their voters in offering better treatment to veterans.

It feels like a lifetime ago when you remember that in March 2017, Foster was a weakened figure having led the DUP into its worst election result since the creation of the devolved assembly at Stormont.

The election result, in which the DUP took the lion’s share of Westminster seats in Northern Ireland, is part of that. But so too are the series of canny moves made by Foster in the aftermath of her March disappointment. By attending Martin McGuinness’s funeral and striking a more consensual note on some issues, she has helped shed some of the blame for the collapse of power-sharing, and proven herself to be a tricky negotiator.

Conservatives are hoping it will be plain sailing for them, and the DUP from now on should take note. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

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