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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Forget planning for no deal. The government isn't really planning for Brexit at all

The British government is simply not in a position to handle life after the EU.

No deal is better than a bad deal? That phrase has essentially vanished from Theresa May’s lips since the loss of her parliamentary majority in June, but it lives on in the minds of her boosters in the commentariat and the most committed parts of the Brexit press. In fact, they have a new meme: criticising the civil service and ministers who backed a Remain vote for “not preparing” for a no deal Brexit.

Leaving without a deal would mean, among other things, dropping out of the Open Skies agreement which allows British aeroplanes to fly to the United States and European Union. It would lead very quickly to food shortages and also mean that radioactive isotopes, used among other things for cancer treatment, wouldn’t be able to cross into the UK anymore. “Planning for no deal” actually means “making a deal”.  (Where the Brexit elite may have a point is that the consequences of no deal are sufficiently disruptive on both sides that the British government shouldn’t  worry too much about the two-year time frame set out in Article 50, as both sides have too big an incentive to always agree to extra time. I don’t think this is likely for political reasons but there is a good economic case for it.)

For the most part, you can’t really plan for no deal. There are however some things the government could prepare for. They could, for instance, start hiring additional staff for customs checks and investing in a bigger IT system to be able to handle the increased volume of work that would need to take place at the British border. It would need to begin issuing compulsory purchases to build new customs posts at ports, particularly along the 300-mile stretch of the Irish border – where Northern Ireland, outside the European Union, would immediately have a hard border with the Republic of Ireland, which would remain inside the bloc. But as Newsnight’s Christopher Cook details, the government is doing none of these things.

Now, in a way, you might say that this is a good decision on the government’s part. Frankly, these measures would only be about as useful as doing your seatbelt up before driving off the Grand Canyon. Buying up land and properties along the Irish border has the potential to cause political headaches that neither the British nor Irish governments need. However, as Cook notes, much of the government’s negotiating strategy seems to be based around convincing the EU27 that the United Kingdom might actually walk away without a deal, so not making even these inadequate plans makes a mockery of their own strategy. 

But the frothing about preparing for “no deal” ignores a far bigger problem: the government isn’t really preparing for any deal, and certainly not the one envisaged in May’s Lancaster House speech, where she set out the terms of Britain’s Brexit negotiations, or in her letter to the EU27 triggering Article 50. Just to reiterate: the government’s proposal is that the United Kingdom will leave both the single market and the customs union. Its regulations will no longer be set or enforced by the European Court of Justice or related bodies.

That means that, when Britain leaves the EU, it will need, at a minimum: to beef up the number of staff, the quality of its computer systems and the amount of physical space given over to customs checks and other assorted border work. It will need to hire its own food and standards inspectors to travel the globe checking the quality of products exported to the United Kingdom. It will need to increase the size of its own regulatory bodies.

The Foreign Office is doing some good and important work on preparing Britain’s re-entry into the World Trade Organisation as a nation with its own set of tariffs. But across the government, the level of preparation is simply not where it should be.

And all that’s assuming that May gets exactly what she wants. It’s not that the government isn’t preparing for no deal, or isn’t preparing for a bad deal. It can’t even be said to be preparing for what it believes is a great deal. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.