Cameron vetoes EU treaty: what does this decision mean?

The Prime Minister has taken a hard line in Europe in a political gamble that could leave Britain is

The Prime Minister has taken a hard line in Europe in a political gamble that could leave Britain isolated.

"Where we can't be given safeguards, it is better to be on the outside," said David Cameron at 6.20am today, as he announced that he has vetoed a revision of the Lisbon Treaty.

This is a huge development. It is the first time that a major treaty, striking at the heart of the EU, will go ahead without a British signature since Britain joined in 1973. It will redefine the nature of Britain's relationship with Europe, essentially creating a two-speed EU.

As I blogged on Wednesday, Cameron was in a very tight spot politically: on the one hand, his Eurosceptic backbenchers were clamouring for a referendum, while on the other his Liberal Democrat coalition partners warned against the risks of isolating Britain.

Isolation is certainly the main worry in the papers this morning. Of the 27 member states, all but four signed up to the treaty, with just Britain, Hungary, Sweden and the Czech Republic remaining on the outside. Sweden and the Czech Republic may yet join after their leaders have consulted their parliaments.

The risk here is that Britain will not only lose influence in the UK, but that its position in the single market will be jeopardised. Defending his decision at that early morning press conference (which was held after more than 10 hours of negotiations that ran through the night), Cameron said:

Of course we want the eurozone countries to come together and to solve their problems. But we should only allow that to happen inside the European Union treaties if there are proper protections for the single market and for other key British interests. Without those safeguards it is better not to have a treaty within a treaty but to have those countries make their arrangements separately.

He insisted that he would work to ensure that any agreement works for all 27 member states, not just the 23 signed up to it.

So, Cameron will not be forced to go to Parliament with a contentious treaty, nearly 20 years after John Major's trials with Maastricht. But does this decision ease his political headache?

In short, not really. The decision has won grudging support ("Credit where it's due -- Cameron has shown backbone," said Roger Helmer MEP), but it is by no means certain that calls for a referendum will end. Eurosceptics could feasibly still argue that the new treaty marks a major change in the power structures of EU and that the British public should be consulted.

It is unclear how much Nick Clegg knew about Cameron's hardline stance on this, but the Prime Minister's calculation will be that the Lib Dems will not walk out of coalition over this issue.

The other risk here is that "Britain's interests" will not necessarily be safeguarded. Cameron made defence of the City of London his price, demanding that any transfer of power from a national regulator to an EU regulator on financial services be subject to a veto. The cost was too high, as French President Nicolas Sarkozy (who has been pushing for a two-speed Europe) explained:

David Cameron requested something which we all considered was unacceptable. We couldn't have a waiver for the UK and in my view it would have undermined a lot of what we have done to regulate the financial sector.

Financial services regulation will press ahead without Britain, then. However, the Guardian points out that these regulations are decided by qualified majority voting, in which Britain does not have a veto. It can currently form a "blocking minority" to prevent legislation from going through, but if more countries join the euro this will shrink.

Cameron has taken a huge political gamble, hoping to channel Margaret Thatcher and her intransigence in Europe, rather than John Major and his struggles over the Maastricht Treaty. It has yet to be seen whether it will pay off. The first priority must be the resolution of the eurozone crisis, which Cameron himself said is "our biggest national interest". The next stage of talks will focus on saving the euro -- without Britain's input.

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

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Senior Labour and Liberal Democrat politicians call for a progressive alliance

As Brexit gets underway, opposition grandees urge their parties – Labour, Lib Dems, the SNP and Greens – to form a pact.

A number of senior Labour and opposition politicians are calling for a cross-party alliance. In a bid to hold the Conservative government to account as Brexit negotiations kick off, party grandees are urging their leaders to put party politics to one side and work together.

The former Labour minister Chris Mullin believes that “the only way forward” is “an eventual pact between Labour, the Liberal Democrats and the Greens not to oppose each other in marginal seats”. 

“Given the loss of Scotland, it will be difficult for any party that is not the Conservative party to form a government on its own in the foreseeable future," Mullin argues, but he admits, “no doubt tribalists on both sides will find this upsetting” and laments that, “it may take three or four election defeats for the penny to drop”.

But there are other Labour and Liberal grandees who are envisaging such a future for Britain’s progressive parties.

The Lib Dem peer and former party leader Ming Campbell predicts that “there could be some pressure” after the 2020 election for Labour MPs to look at “SDP Mark II”, and reveals, “a real sense among the left and the centre-left that the only way Conservative hegemony is going to be undermined is for a far higher degree of cooperation”.

The Gang of Four’s David Owen, a former Labour foreign secretary who co-founded the SDP, warns Labour that it must “face up to reality” and “proudly and completely coherently” agree to work with the SNP.

“It is perfectly legitimate for the Labour party to work with them,” he tells me. “We have to live with that reality. You have to be ready to talk to them. You won’t agree with them on separation but you can agree on many other areas, or you certainly should be trying.”

The Labour peer and former home secretary Charles Clarke agrees that Labour must “open up an alliance with the SNP” on fighting for Britain to remain in the single market, calling it “an opportunity that’s just opened”. He criticises his party for having “completely failed to deal with how we relate to the SNP” during the 2015 election campaign, saying, “Ed Miliband completely messed that up”.

“The SNP will still be a big factor after the 2020 general election,” Clarke says. “Therefore we have to find a way to deal with them if we’re interested in being in power after the election.”

Clarke also advises his party to make pacts with the Lib Dems ahead of the election in individual constituencies in the southwest up to London.

“We should help the Lib Dems to win some of those seats, a dozen of those seats back from the Tories,” he argues. “I think a seat-by-seat examination in certain seats which would weaken the Tory position is worth thinking about. There are a few seats where us not running – or being broadly supportive of the Lib Dems – might reduce the number of Tory seats.”

The peer and former Lib Dem leader Paddy Ashdown agrees that such cooperation could help reduce the Tory majority. When leader, he worked informally in the Nineties with then opposition leader Tony Blair to coordinate their challenge to the Conservative government.

“We’re quite like we were in 1992 when Tony Blair and I started working together but with bells on,” Ashdown tells me. “We have to do something quite similar to what Blair and I did, we have to create the mood of a sort of space, where people of an intelligent focus can gather – I think this is going to be done much more organically than organisationally.”

Ashdown describes methods of cooperation, including the cross-party Cook-Maclennan Agreement on constitutional reform, uniting on Scottish devolution, a coordinated approach to PMQs, and publishing a list 50 constituencies in the Daily Mirror before the 1997 election, outlining seats where Labour and Lib Dem voters should tactically vote for one another to defeat Tory candidates.

“We created the climate of an expectation of cooperation,” Ashdown recalls. Pursuing the spirit of this time, he has set up a movement called More United, which urges cross-party support of candidates and campaigns that subscribe to progressive values.

He reveals that “Tory Central Office are pretty hostile to the idea, Mr Corbyn is pretty hostile to the idea”, but there are Conservative and Labour MPs who are “talking about participating in the process”.

Indeed, my colleague George reveals in his report for the magazine this week that a close ally of George Osborne has approached the Lib Dem leader Tim Farron about forming a new centrist party called “The Democrats”. It’s an idea that the former chancellor had reportedly already pitched to Labour MPs.

Labour peer and former cabinet minister Tessa Jowell says this is “the moment” to “build a different kind of progressive activism and progressive alliance”, as people are engaging in movements more than parties. But she says politicians should be “wary of reaching out for what is too easily defined as an elite metropolitan solution which can also be seen as simply another power grab”.

She warns against a “We’re going to have a new party, here’s the board, here’s the doorplate, and now you’re invited to join” approach. “Talk of a new party is for the birds without reach and without groundedness – and we have no evidence of that at the moment.”

A senior politician who wished not to be named echoes Jowell’s caution. “The problem is that if you’re surrounded by a group of people who think that greater cooperation is necessary and possible – people who all think the same as you – then there’s a terrible temptation to think that everyone thinks the same as you,” they say.

They warn against looking back at the “halcyon days” of Blair’s cooperation with the Lib Dems. “It’s worth remembering they fell out eventually! Most political marriages end in divorce, don’t they?”

Anoosh Chakelian is senior writer at the New Statesman.