Cameron finally has a coherent Europe policy - but does his party want to listen?

The PM is inching towards a sceptical but engaged role in Europe. But his MPs won't be bought off.

After the umpteen crisis summits that have dominated Brussels-night life, last week's meeting of EU leaders was one of the dullest in recent memory. With the clock well past 3am, bleary-eyed leaders stumbled along to brief the no-less bleary-eyed Brussels press corps that, after ten hours of painstaking negotiating, a couple of words in the summit conclusions had been changed.

Three months after agreeing to create a single supervisor for the eurozone by the end of 2012, EU leaders confirmed that they had actually meant it and that the legal framework would be in place by the end of 2012.

But while leaders lined up to put their own national spin on the banking union agreement, David Cameron's Friday morning press briefing was significant, not just because of what he said, but also the way he said it.  In the course of a 20 minute briefing Cameron referred to "a new settlement" for both the eurozone and Britain about five times. Every time he spoke of the necessity of a banking union and deeper integration for the eurozone in the next breath he added that Britain would not be involved in any of it.

As a statement of fact, it is hard to disagree with him. Deeper integration of the eurozone will change Britain's relationship with the EU. Whether it is bank supervision by the ECB, a specific budget for the eurozone or a single Treasury for the single currency, all have as profound implications for the 10 countries outside the eurozone as for the eurozone-17. All, particularly Denmark and Sweden, the two other countries where euro-membership is squarely off the political agenda, will have big decisions to make, but a multi-speed Europe will surely become even clearer than it already is.

The first question is whether Cameron genuinely wants Britain to have second division membership and, if so, whether other countries will let him. Although Michael Gove and Iain Duncan-Smith lead the 'get-outer' faction in his cabinet, it seems clear that Cameron does not want Britain to leave the EU. In fact, he was at pains to repeat his commitment to Britain's EU membership, particularly to the single market, and to the country's 'euro-realism' on foreign policy.

The Cameron-doctrine on Europe seems to boil down to the following: pro-single market and in favour of ad hoc co-operation on foreign policy and blanket opposition to everything else - from the euro and JHA policy to social policy. However, while there is plenty to criticise from a left or liberal perspective, it is an ideologically coherent and thoroughly Tory approach.

At the same time, however, his government continues to add fuel to the perception that Cameron's EU policy is one of outright hostility. Indeed, after a week in which his government decided to opt out of over 130 legal acts on justice and home affairs policy and senior ministers mooted the possibility of a referendum on the EU within a year of the next election expected in 2015, the remark by Finland's Europe minister, Alex Stubb, that Britain was waving "bye, bye to Europe" is understandable. One of the Tories' main weaknesses on Europe is their lack of any significant allies and it is hard to see how Cameron can secure the opt-outs his party craves if he constantly provokes hostility from other European governments

That is why Cameron should tread carefully at November's specially convened EU budget summit. Angela Merkel has already thrown down the gauntlet, threatening to call off the summit - a veto to pre-empt a veto - if Cameron and William Hague continue to demand big reductions in EU spending. The entire EU budget only represents 1 per cent of GDP and the funds being argued about between countries are pretty small - around 0.1 per cent of GDP. But if it is already hard to see other countries agreeing to more British opt-outs, holding the rest of Europe to ransom over a tiny proportion of the EU budget would be completely counterproductive.

The other question is whether his party is prepared to listen. One of the mistakes Cameron made early on was to think that he could buy off his eurosceptics. Despite pulling his MEP delegation out of the centre-right European People's Party group and putting a "referendum lock" into UK law, many Tory activists are still convinced that their leader is a kool-aid slurping federalist and will accept nothing short of as many 'in/out' referendums as it takes to get the right result.

However, it is not as if either Labour or the Liberal Democrats have a coherent Europe policy around which to take advantage of Cameron's contortions. Since being ousted from power in 2010, Labour has taken a conscious decision not to be a hostage to fortune by laying down detailed policy platforms and Europe is no exception. Senior figures in the party are even considering whether to steal a march on the Tories by promising a referendum on Britain's EU membership in their next manifesto, a high risk strategy for no obvious political gain considering that the party won't convince anyone if it tries to 'out-sceptic' the Conservatives.

As for the Lib Dems, the only way that their pro-EU stance will be a vote-winner is if they use it in 2014 to despatch Nick Clegg to Brussels as Britain's next Commissioner, conveniently a year before facing the wrath of the electorate the following year.

Europe has been one of the most destructive forces in the Conservative party for over twenty years. After wrangling over the ERM and attitudes to European integration contributed to Thatcher's downfall, John Major's government was wrecked by civil war over the Maastricht Treaty and, since then, the Tories have repeatedly failed to articulate a policy position capable of getting grass-roots support and being put into practice. But now eurozone integration seems set to formally create a club within a club. Cameron acknowledges this and is inching towards a sceptical but engaged role in Europe. The question is whether other European leaders, and his party activists, are ready to listen.

Ben Fox is chairman of GMB Brussels and political adviser to the Socialist vice-president of economic and monetary affairs.

David Cameron gives a press conference on the final day of an EU summit in Brussels on 19 October 2012. Photograph: Getty Images.
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Ken Livingstone says publicly what many are saying privately: tomorrow belongs to John McDonnell

The Shadow Chancellor has emerged as a frontrunner should another Labour leadership election happen. 

“It would be John.” Ken Livingstone, one of Jeremy Corbyn’s most vocal allies in the media, has said publicly what many are saying privately: if something does happen to Corbyn, or should he choose to step down, place your bets on John McDonnell. Livingstone, speaking to Russia Today, said that if Corbyn were "pushed under a bus", John McDonnell, the shadow chancellor, would be the preferred candidate to replace him.

Even among the Labour leader’s allies, speculation is rife as to if the Islington North MP will lead the party into the 2020 election. Corbyn would be 71 in 2020 – the oldest candidate for Prime Minister since Clement Attlee lost the 1955 election aged 72.

While Corbyn is said to be enjoying the role at present, he still resents the intrusion of much of the press and dislikes many of the duties of the party leader. McDonnell, however, has impressed even some critics with his increasingly polished TV performances and has wowed a few sceptical donors. One big donor, who was thinking of pulling their money, confided that a one-on-one chat with the shadow chancellor had left them feeling much happier than a similar chat with Ed Miliband.

The issue of the succession is widely discussed on the left. For many, having waited decades to achieve a position of power, pinning their hopes on the health of one man would be unforgivably foolish. One historically-minded trade union official points out that Hugh Gaitskell, at 56, and John Smith, at 55, were 10 and 11 years younger than Corbyn when they died. In 1994, the right was ready and had two natural successors in the shape of Tony Blair and Gordon Brown in place. In 1963, the right was unprepared and lost the leadership to Harold Wilson, from the party's centre. "If something happens, or he just decides to call it a day, [we have to make sure] it will be '94 not '63," they observed.

While McDonnell is just two years younger than Corbyn, his closest ally in politics and a close personal friend, he is seen by some as considerably more vigorous. His increasingly frequent outings on television have seen him emerge as one of the most adept media performers from the Labour left, and he has won internal plaudits for his recent tussles with George Osborne over the tax bill.

The left’s hopes of securing a non-Corbyn candidate on the ballot have been boosted in recent weeks. The parliamentary Labour party’s successful attempt to boot Steve Rotheram off the party’s ruling NEC, while superficially a victory for the party’s Corbynsceptics, revealed that the numbers are still there for a candidate of the left to make the ballot. 30 MPs voted to keep Rotheram in place, with many MPs from the left of the party, including McDonnell, Corbyn, Diane Abbott and John Trickett, abstaining.

The ballot threshold has risen due to a little-noticed rule change, agreed over the summer, to give members of the European Parliament equal rights with members of the Westminster Parliament. However, Labour’s MEPs are more leftwing, on the whole, than the party in Westminster . In addition, party members vote on the order that Labour MEPs appear on the party list, increasing (or decreasing) their chances of being re-elected, making them more likely to be susceptible to an organised campaign to secure a place for a leftwinger on the ballot.

That makes it – in the views of many key players – incredibly likely that the necessary 51 nominations to secure a place on the ballot are well within reach for the left, particularly if by-election selections in Ogmore, where the sitting MP, is standing down to run for the Welsh Assembly, and Sheffield Brightside, where Harry Harpham has died, return candidates from the party’s left.

McDonnell’s rivals on the left of the party are believed to have fallen short for one reason or another. Clive Lewis, who many party activists believe could provide Corbynism without the historical baggage of the man himself, is unlikely to be able to secure the nominations necessary to make the ballot.

Any left candidate’s route to the ballot paper runs through the 2015 intake, who are on the whole more leftwing than their predecessors. But Lewis has alienated many of his potential allies, with his antics in the 2015 intake’s WhatsApp group a sore point for many. “He has brought too much politics into it,” complained one MP who is also on the left of the party. (The group is usually used for blowing off steam and arranging social events.)

Lisa Nandy, who is from the soft left rather than the left of the party, is widely believed to be in the running also, despite her ruling out any leadership ambitions in a recent interview with the New Statesman.However, she would represent a break from the Corbynite approach, albeit a more leftwing one than Dan Jarvis or Hilary Benn.

Local party chairs in no doubt that the shadow chancellor is profiling should another leadership election arise. One constituency chair noted to the New Statesman that: “you could tell who was going for it [last time], because they were desperate to speak [at events]”. Tom Watson, Caroline Flint, Chuka Umunna, Yvette Cooper, Andy Burnham and Liz Kendall all visited local parties across the country in preparation for their election bids in 2015.

Now, speaking to local party activists, four names are mentioned more than any other: Dan Jarvis, currently on the backbenches, but in whom the hopes – and the donations – of many who are disillusioned by the current leadership are invested, Gloria De Piero, who is touring the country as part of the party’s voter registration drive, her close ally Jon Ashworth, and John McDonnell.

Another close ally of Corbyn and McDonnell, who worked closely on the leadership election, is in no doubt that the shadow chancellor is gearing up for a run should the need arise.  “You remember when that nice Mr Watson went touring the country? Well, pay attention to John’s movements.”

As for his chances of success, McDonnell may well be even more popular among members than Corbyn himself. He is regularly at or near the top of LabourList's shadow cabinet rankings, and is frequently praised by members. Should he be able to secure the nominations to get on the ballot, an even bigger victory than that secured by Corbyn in September is not out of the question.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog. He usually writes about politics.