It's the people, stupid

Just as new Labour achieves a coherent and intelligent position on Europe, the British public loses

For the first time in many years - arguably, for the first time ever - Britain has a position on the European Union that is clear, defensible and intelligent. It attracts favourable notices from European politicians and media. British ministers and officials can now claim (without much spin) that their country is no longer dragged around helplessly by the Franco-German motor, but is instead promoting or supporting issues with which it strongly identifies - the single market, competition and enlargement to the east. This has positioned Britain as the champion of the applicant countries, which, by the second half of this decade, should have increased the membership of the Union by around a third.

It has been a remarkable new Labour achievement, the more so because it has been in the teeth of those forces before which it is always supposed to genuflect - the right-wing, anti-Europe press. But it is not trumpeted, and for good reason: just as Labour is getting the politics right, it is getting the public wrong. (An ICM poll shows that support for the single currency has slumped to a record low of just 18 per cent.)

Blair laid out his commitment to Europe in a remarkable speech in Warsaw on 6 October. He took the argument, deployed over the past two years by Peter Mandelson and Robin Cook, that the Union had failed to evoke trust in its own democratic institutions: it "fails the test of the people", as he put it. To address this, it should link its non-democratic institutions with ones that did enjoy support and trust: the national parliaments. These would send MPs to a second chamber in the European Parliament, which would oversee the implementation of an agreed "Statement of Principles" of the EU - something that would operate instead of the constitution that a number of states, especially Germany, want. The European Council of the heads of government and the various Councils of Ministers would take a stronger control of the Union, setting an annual agenda that would be the spine of its business.

His second theme was the Union's need to embrace quickly and comprehensively the applicant states to its east - without allowing for the creation of a two-speed Europe. "I have no problem with greater flexibility or groups of member states going forward together," he said. "But that must not lead to a hard core . . . such groups must at every stage be open to others who wish to join."

The speech was, more than usually, a melange of different streams of thought. Mandelson and Cook's insights - Cook floated his thoughts on addressing the deficiency of the new parliament by drafting in MPs of the old in a New Statesman interview 18 months ago - have become part of the assumptions of new Labour on Europe. Those who worked on the text itself included Nigel Sheinwald, the UK ambassador to the EU, and Stephen Wall, the European policy enforcer in the Cabinet Office and a former parliamentary private secretary to John Major. Others included the euro enthusiast MP Denis MacShane, the director of the Centre for European Reform, Charles Grant (equally pro-Europe), and the Oxford academic and historian Timothy Garton Ash, who passionately wants the central European states to be part of the European Union.

Yet Blair wove the results of the drafts and his sessions with these advisers into a text that protects the long-standing British interest in opposing centralisation and the creation of a European state, but also puts him on the side of both the present "people" of the Union and the future people from the states knocking on the EU door. Look, he told his advisers, I hear the other European heads of state say the same things I do - that the Commission is interfering and bossy, that the people are turned off by the whole thing, that no one understands what we are talking about, or cares. But then what we get are proposals to strengthen the Commission and make the whole thing more centralised, complex and distant.

That text gives coherence to the British position as the member-states prepare for the summit at Nice next month. It should mean that it will ride out the arguments there. It will refuse to concede to a demand from most of the rest, including the other "Big Three" of France, Germany and Italy, for tax and social security issues to be the subject of qualified majority voting, meaning that Britain's veto on this issue would be destroyed and that harmonisation would come in over its protests. It will support the other big states in their push to reduce the power of the small states - a battle that is likely to be the toughest in Nice, since the small states still, in pre-summit skirmishing, refuse to give enough to allow a restructuring to happen as the big states wish. It will insist that "enhanced co-operation" between the more enthusiastic states will not lead to "core groups" - and will probably get agreement. The real meat of getting the applicant countries in - there are deep divisions about which first, when and under what conditions - will start under the Swedish presidency, which succeeds the current French presidency in the new year.

Blair's intervention has been praised by the president of the European Commission, Romano Prodi, but was largely ignored here, except for a supportive column from Don Macintyre in the Independent and a blast from the Daily Telegraph. That Labour has succeeded, in three years, in mending the European fences and putting itself at the heart of the argument on structure, competence, constitution and purpose, is genuinely impressive and convincing - at least to those who regard the Union as Blair does, as one of the two (with the US) most dynamic centres of world power.

But all of this could come to naught if Blair cannot convince his own people, who habitually refer to "Europe" as an entity of which they are not a part. The commitment to a referendum on joining the single currency early in a new parliament looks shaky: even strong pro-Europeans such as Charles Grant put the chances of a victory at around 30 per cent. If this continues, a second-term Labour government will not hold the referendum: it would be too damaging. Having succeeded in positioning policy so that Britain can be among the leaders of Europe, Blair now fears that his government will not be able to persuade the country to join the common currency - which means it can never be among the leaders in Europe.

Britain's comeback has been based on the initial enthusiasm for Blair in Europe; that there is no dominant leader, such as Helmut Kohl of Germany or Francois Mitterrand of France or (at the head of the Commission) Jacques Delors, who puts him in the shade; the skill of a diplomatic corps chafing under Conservative division and stasis; the momentum of change in a body that is simultaneously enlarging, bedding down a common currency and undergoing constitutional reform; and the weakness of the main opposition. But it was always something of a trick with mirrors. Come the test of a referendum, the bluff could be called.

It could be called because Blair is more right than he admitted. "The people" are indifferent or hostile. The democratic connection is everywhere weak, most of all in Britain. The sheer complexity of a Union of 15 states means a deeply opaque organisation whose language is not so much wooden (wood is at least plain) as hermetic, referring only inwards. Politicians of every country talk of the highest ideals - then make the most pragmatic of compromises, giving away what they had earlier described as sacred possessions.

For some who are close to the debates on Europe within the government, the problem is that the debates are so inhibited. They always have been, in Britain: for where the anti-Europeans can be thunderously denunciatory, the pro-Europeans have been strictly economical (and economical with the truth), insisting that the whole issue is one of markets and trade. As Hugo Young put it in a Guardian column in July: "Confronted with an invitation to admit that any future progress is going to be a step towards some modicum more of political integration, all ministers search their copious vocabulary to rephrase the question and deny the possibility."

Now, as Blair begins to break that inhibiting mould, there comes a new restraint. This is not the 1960s and 1970s, when the issue was vented openly, rending Labour and causing it to split. New Labour discipline clamps that. But the deeply private opposition of the Chancellor to rapid accession to the euro, and the effective veto that Brown has on prime ministerial initiatives in the economic area, has put limits on a pro-euro campaign. If Labour wins once more, the grand question of our "leadership" of Europe may not be realised. The people will not have it. The leadership wants to mould the Continent and, through it, the world order; but Britain's electors think that more power to Europe means less for them.

Having been told for 40 years that the Union is no more than a mechanism for a more efficient economy, they have not had time to adjust to it being a global necessity. Blair's speech in Warsaw, on this perspective, takes on the aspect of the plea of a Prince over the water: the man who would be European, laying out caviar to the general and seeing "the people" spit it out as foreign muck.