The Eurosceptic prophecy fulfils itself

Cameron has traded influence in the European Union for a brief respite from rebellion in his party,

David Cameron really didn't have much of a choice in the end. As it became clear that he simply wasn't going to get the concessions he needed – "safeguarding" Britain's interests in the single market; blocking aspects of European financial services reform – he couldn't sign up to a new EU deal. Trying to force such a treaty through parliament would be immensely painful and damaging to the Prime Minister. Besides, Ireland and the Netherlands have constitutional obligations to hold referendums on new EU treaties. It would be very difficult for Cameron to refuse to consult his citizens if the Dutch and Irish were being asked.

So he said "no". What does this mean? The eurozone members and six others – a eurozone-plus – aim to proceed with their own pact to stabilise the single currency and pursue fiscal integration. Technically, it is very difficult for them to use EU institutions to enforce their deal (which is why Germany, in particular, would have preferred a full 27-member EU treaty, and why markets will question whether the euro has in fact been saved).

There will now be a lot of wrangling over what competences this new inner European core has to enact economic reforms that affect the outer tier. Britain's problem is that the outer tier is tiny: the UK and Hungary, possibly Sweden and the Czech Republic. Legally they have a strong case to prevent the eurozone-plus group from building a new institutional architecture from existing EU bodies – the Commission, the Court, the Parliament etc.

But in practice the inner core is big enough to form a majority in the Council – the assembly of heads of government where real EU decisions are made – to the near-permanent exclusion of Britain. This is the "caucusing" effect that the Foreign Office has been worried about – a situation in which the eurozone gang arrives at summits with a pre-agreed position and presents it to the outer tier as a fait accompli. When the reality of that new balance of power becomes clear, Hungary and the other naysayers might well decide their long-term interests are better served by eventually joining the inner circle, leaving the UK completely isolated.*

In other words, Cameron has blocked a treaty that he judges might have damaged UK interests, thereby creating a new settlement in the EU that could permanently tilt future negotiations against Britain. That in turn means hardline Tory sceptics will have good grounds to say that our relationship with the EU has been fundamentally altered and, inevitably, that there should be a referendum.

As I wrote yesterday, the Tories bank concessions on Europe and then come back for more. Last night Cameron made a very big concession indeed – he removed Britain from the next phase of the European project.

Sceptics should be pleased and, as my colleague Samira Shackle has noted this morning, some of them are. Then they will find, as they always do, that pushing for separation leads to diplomatic isolation, which reinforces their suspicion that the whole thing is a conspiracy against Britain. The prophecy fulfils itself. So they will insist that Cameron now set about the business of "repatriating" powers from Brussels, which, of course, he is much less able to do, having isolated the UK and antagonised fellow EU leaders. And when Cameron cannot then secure adequate "repatriation" – and nothing short of divorce is adequate for some Tory backbenchers – the calls for a referendum will sound out louder than ever.

The Prime Minister's non-deal in Brussels last night has bought him just a brief a moment of respite from rebellion in his own party. For that, he has accepted a downgrading of UK diplomatic relations with our major trading partners, leading us to the outermost margin of the EU and ever closer to the exit.

*Update: Indeed, Hungary sensed which way the wind was blowing pretty quickly and has now lined up with the non-UK consensus. It is still possible, of course, that Cameron is gambling that this emergency alliance of the rest of Europe will not last. National parliaments will have to be brought on side, some countries will expect referendums on a new euro pact and, crucially, since last night's deal doesn't appear to have actually resolved the structural flaws in the design of the single currency it might well fail to ease the market pressure driving the euro members apart. If it becomes clear that smaller states have signed up for something that gives Germany and France all of the power with no economic security in return there is bound to be a significant nationalist backlash in many countries. The whole thing could unravel, in which case the hardline British eurosceptics' ambition of getting out altogether would be realised even sooner.

Rafael Behr is political columnist at the Guardian and former political editor of 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 50 seats 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 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.