Why Cameron called it right

Ignore today's headlines, the PM was right to take on his backbenchers over Europe.

Today's headlines are predictably terrible for David Cameron. "Bloody nose for Cameron", "80 Tories humble Cameron" and so on. Most of the left and the right, albeit for different reasons, believe that the Prime Minister blundered badly by imposing a three-line whip on Conservative backbenchers. Even if it is erroneous to compare last night's vote with the Maastricht rebellion, which was over government legislation, this was still the largest ever Conservative rebellion over Europe.

But for several reasons it was Cameron, not his critics, who called this one right. For a start, the likely consequence of allowing a free vote would have been an even larger rebellion. As John Rentoul noted yesterday, the number of rebels could have exceeded 120, a majority of Tory backbenchers. Today's headlines would have been even worse for the PM.

By refusing to vote in favour of an EU referendum, Cameron has also demonstrated that he has a better grasp of public opinion than his right-wing opponents. British voters might be the most eurosceptic in the EU (54 per cent believe that the UK has "not benefited" from its membership of the EU, more than in any other country) but they are not obsessed with the subject.

Polling by Ipsos-MORI shows that less than half a per cent of voters believe that Europe is the most important issue facing Britain today. When asked to select "other important issues" this figure rises to just 3 per cent. For this reason, Cameron was right to tell his party in 2006 that it had to stop "banging on about Europe". Voters might have shared William Hague and Iain Duncan Smith's euroscepticism but they didn't share their fixation with the subject. They were more interested in hearing how the Tories would improve the NHS than how they would repatriate employment powers from Brussels. True, 70 per cent of voters want a referendum on EU membership, but then the polls invariably show majority support for a referendum on any subject. A long debate over EU membership would have seemed eccentric at a time when there are 2.57m people unemployed and the economy is flat-lining.

Cameron should not be absolved of blame for the rebellion. He pandered to the euro fanatics in his party by withdrawing the Tories from the mainstream European People's Party and forging a sinister alliance with the nationalist right. His aloof and haughty style has alienated many backbenchers. But today my (admittedly low) admiration for him has grown. He has shown that he is prepared to adopt a position - that a referendum on EU membership is not in Britain's interests - and stick to it. It is he, not his opponents, who has demonstrated political strength.

George Eaton is political editor of the New Statesman.

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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.