Europe’s endgame

Within a decade, Britain will hold a referendum on membership of the European Union – and the Yes ca

New Statesman
Photo: Getty Images

It is getting harder to make the case for Britain’s membership of the European Union for the practical reason that the alliance is changing faster than arguments in favour of it can be devised. The crisis in the eurozone will result in either a messy unravelling of the single currency or its renewal through deeper economic and political integration. Either way, the EU will be transformed and new rules of engagement between Britain and the rest of the continent will have to be set. The pressure to offer that revised arrangement to the public in a referendum will be irresistible.

Most Conservative MPs now fully expect their party’s next manifesto to include the pledge of a vote on EU membership. Labour and the Liberal Democrats doubt they can avoid making the same offer, although they tend to be less enthusiastic about the idea.

The plebiscite is a demand usually made by opponents of Britain’s EU membership. Supporters have always feared the potency of the sceptics’ rhetoric of national liberation. They mistrust the campaigning efficacy of arguments based on trade advantage and fear of diplomatic isolation.

The pro-Europeans’ reluctance to popularise their cause and their readiness to denounce their opponents as cranks and xenophobes has confirmed a small but vocal minority in the conviction that Brussels is an elite conspiracy against the common citizen.

Pro-Europeanism in Britain is as much a habit of government as an ideological position. Successive administrations inherit the legal and bureaucratic edifice of Continental entanglement and decide, on advice from civil servants, that acquiescence is the easiest path. That is as true of David Cameron’s government as it was of Gordon Brown’s and Tony Blair’s. The difference is that Cameron has no permission from his party to make compromises for Europe’s sake. Cameron is also unlucky to be in power during the biggest crisis in the history of the EU. The misfortune is compounded by the lack of attention he paid to Brussels before he entered Downing Street.

The Conservative leader has tended to view his party’s hatred of the EU as a dangerous obsession – an old marching tune from the party’s days parading up and down the unelectable fringe. Euroscepticism was to be placated internally but never advertised to the country.

In opposition, Cameron pulled the Tories out of the moderate European People’s Party (EPP) grouping in the European Parliament. In government, he has legislated for a “referendum lock” to prevent any future transfer of powers to Brussels being smuggled past the electorate.

Neither of those measures was meant to have any practical significance. Because Cameron found the European Parliament uninteresting, he presumed it was irrelevant. When the bill containing the referendum lock was drafted in the autumn of 2010, the Prime Minister thought Brussels had finished making treaties for a generation. He was wrong on both counts. Withdrawal from the EPP cut off diplomatic channels to a clique of powerful bosses of sister conservative parties on the Continent: Chancellor Angela Merkel of Germany, the former French president Nicolas Sarkozy, the European Council president, Herman Van Rompuy, and the president of the European Commission, José Manuel Barroso. Alienation from that club diminished Cameron’s ability to influence negotiations on a treaty to stabilise the single currency at the end of last year. Those discussions then produced a treaty that Cameron could
not sign for fear of provoking a ferocious rebellion in his party.

The subsequent decision to veto a pan-European deal, leaving most EU members to press ahead without Britain, was a watershed moment. It showed that the opposition culture of righteous anger is stronger in the Conservative Party than the governing tradition of diplomatic pragmatism. That places Britain’s ruling party outside the European mainstream, which further diminishes Cameron’s ability to shape events. The sceptics’ prophecy is thus self-fulfilling: the tighter the Prime Minister’s hands are tied at home, the harder it is to exert influence abroad – and the likelier it becomes that the EU will evolve in a direction that really does look like a conspiracy against UK interests. And so on, towards the exit.

The overwhelming majority of Tory MPs want a substantial renegotiation of the terms of Britain’s EU membership, characterised by “repatriation” of powers from Brussels. Most envisage a loose trade partnership that barely resembles membership on present terms. Only a minority agitates for divorce, but few would be distressed by the idea. “Where there are differences, it is largely a question of speed, not direction,” says one moderate Eurosceptic.

Tory pro-Europeanism is moribund. No candidate will get past a constituency selection committee without meeting a high standard of anti-Brussels bluster. Veteran cheerleaders for the European project, such as Ken Clarke and Michael Heseltine, are dismissed as relics of another era, when integration was still a moral imperative to dissolve the Continent’s historically murderous nationalisms. The fading of that memory is a significant factor in the decline of support for the whole project. “It was a postwar ‘Never Again’ attitude that drove the pro-Europeanism of Clarke and Heseltine,” says a prominent Tory MP from the 2010 parliamentary intake. “Our generation dismisses that argument out of hand.”

There is more residual respect for Europe’s founding vision on the Labour side, but even there it is waning. The euro crisis has made it harder to shrug off the lack of democracy as a secondary blemish on an otherwise noble record of promoting peace and prosperity. European institutions have repeatedly failed to organise a rescue for their flagship currency project. They have forced Greece, the euro’s frailest member, on to an austerity diet that threatens to kill the state before it cures the economy. The fiscal union treaty, designed to satisfy German fixation on long-term budgetary discipline, is an act of forced atonement for reckless spending in the past. It contains nothing to foster confidence in the future.

Sceptics on the right have always seen the EU as a malign force but largely for abstract reasons. Nominal concessions of constitutional sovereignty did not intrude on most voters’ lives, which made it easy for the liberal left to dismiss the outrage they provoked as parochial misanthropy. Mishandling the euro crisis is of a different order of offence. It is plunging Europe into turmoil, making it harder to sustain the myth that Brussels governance is benign.

It has also been easy in the past for Labour and Liberal Democrats to adopt a position of nonchalant pro-Europeanism as the alternative to obsessive Tory scepticism – a badge of moderation to contrast Conservative monomania. Now the Tories feel vindicated in their fixation on the folly of the single currency, while advocates of British entry into the euro shift uncomfortably in their seats. No wonder Ed Balls reminds anyone who will listen that his machinations at the Treasury were instrumental in preserving the pound.

As for Ed Miliband, his attitudes towards Europe are, like so much of his creed, discernible only in vague outline. His ambition is to tap in to voters’ sense of disempowerment at the hands of global economic forces. That could lead him to defend the EU as the only regulatory force with sufficient scale to tame international finance. Alternatively, there is a thread that leads from job insecurity and resentment about low wages to reaction against the EU’s free-flowing labour market. Miliband’s past flirtation with the Blue Labour analysis of market failure and the impact of globalisation on working-class communities contains ample potential for a revival of populist-left Euroscepticism.

Friends of the Labour leader say his instincts prohibit a move in that direction. As the son of Jewish wartime refugees (and the product of a metropolitan intelligentsia), he is attached to the ideal of a post-nationalist Europe. One senior ally in the shadow cabinet describes him as “probably the most pro-European leader Labour has ever had”.

That does not preclude the offer of a referendum on membership. There is a good pro-EU case for asking the nation’s permission to stay in the Union, rehearsed in a recent lecture by Peter Mandelson. Recognising the certainty that Britain’s relationship with Brussels was in transition, the New Labour grandee lamented the way discussion of a referendum has been monopolised by the most sceptical forces in British politics. “The European mandate that the Heath government secured in the 1970s belongs to a different era and a different generation,” Mandelson said. That is obviously true. Since then, the arguments in favour of keeping Britain in Europe have turned pale and atrophied for want of exercise and fresh air.

Some of Miliband’s closest advisers support the idea of a referendum. Balls cautiously acknowledges that a national vote on the subject is probably inevitable, but is in no hurry to demand one. The whole debate is clouded by uncertainty about what kind of union Britain would be invited to embrace or quit.

The likeliest outcome from the eurozone crisis is the emergence of a super-integrated core of single-currency survivors and an outer ring of satellite states. Cameron has explicitly endorsed that two-tier model and, on the face of it, such a loose configuration would probably appeal to the moderate-sceptic mainstream of British opinion. Yet that model clearly contains a risk of British influence being diluted and the terms of trade becoming ever less favourable. Eurozone members might be disinclined to preserve the UK’s privileges, especially when London’s response to the crisis has been marked by arrogant Schadenfreude, financial niggardliness and diplomatic obstruction.

If the new terms of association seem ungenerous, the conversation will quickly turn to separation. There is no appetite in Downing Street for such a drastic gamble at the moment, but nor is there any sentimental attachment to EU membership. The calculation, says a senior adviser to the Prime Minister, rests on a blunt cost-benefit analysis: “The test is whether the interests of growth are better served in or out. At the moment it’s in.” However, there is sympathy in senior Tory circles for the notion, much touted by ultra-sceptic MPs, that Britain could make a better living for itself unshackled from Europe, striking bilateral trade deals with the emerging economic powerhouses – China, India, Brazil.

Keen attention is also being paid to the harrying of Tory MPs by the UK Independence Party. Nigel Farage cannot muster enough serious candidates to mount a sustained electoral threat to the Tories, but his peculiar style of attack – the paradox of blood-curdling bonhomie – appeals to enough traditional Tories to put some marginal seats at risk. It is certainly sufficient to raise the prospect of Ukip humiliating the Tories in European parliamentary elections in June 2014, less than a year before a general election is due. George Osborne, in his capacity as Conservative election strategist, is said to be obsessed with the threat from Ukip. He is also mindful of the spike in opinion-poll ratings that followed Cameron’s wielding of the Brussels veto last December. The appeal of some noisy Eurosceptic spectacle is obvious. The promise of a referendum is the bare minimum that would be required in order to preserve unity on the Tory benches.

Generally the Lib Dems see themselves as the brake on the Tories neuralgic hostility to Europe, yet the party is in no hurry to flaunt its credentials as Britain’s most consistently Brussels-friendly party. The concern among senior figures close to Nick Clegg is that the party is not well enough associated in the public eye with popular policies to start lashing itself to causes that are famously unpopular. It is worth noting also that the Lib Dems’ 2010 manifesto contained a commitment to an in/out referendum on EU membership “the next time the British government signs up for a fundamental change in the relationship between the UK and the EU”.

That change is certain. There is no outcome from the current turmoil that does not substantially alter the balance of power in the EU. The rapidly forming consensus in Westminster is that, within a decade, the public will be invited to ratify any new arrangement that emerges. The uncertainty is whether that deal will lend itself more easily to portrayal as a service to the national interest or a betrayal. The voices of rejection will be amplified by decades of frustration, carried by prevailing winds of hostility to political and financial elites. The voices in favour will be weak and untrained after the long years spent only whispering apologies for Europe.