Cameron's EU referendum may never happen

It is odd to speak of an EU referendum as inevitable when few believe the Conservatives will win a majority at the next election.

Yet again this morning, David Cameron was interviewed about a speech on the EU he still hasn't given. Asked on the Today programme whether the over-hyped address had been completed, Cameron said it was "finished and ready to go" (subsequently amending this to "largely finished").

Once again, he said that he would seek to reach a "new settlement" with the EU before seeking the "consent" of the British people for the changes, a clear promise of a referendum. In his speech, which is now due to be delivered on 23 January (having been pushed back from 22 January in order to avoid clashing with celebrations to mark the 50th anniversary of the Élysée Treaty between France and Germany), Cameron will say that after the next election, a Conservative government would seek to repatriate significant powers from the EU before offering the voters a choice between the new terms and withdrawal.

As such, a referendum is now viewed by most as inevitable. Yet this pledge is dependent on an outcome that increasingly few believe is likely: a Conservative majority at the next election. A reformation of the coalition would likely scupper any plans Cameron has to bring back major powers from Brussels. In addition, it is unclear how Cameron will respond if he proves unable to secure the changes he wishes to see. This morning, he simply told John Humphrys: "I'm confident we will get the changes that we want, we'll have a new settlement and then we'll put that to the British people." Given the obstacles to a referendum, it is surprising how many now speak as if it is a certainty.

Neither Labour nor the Liberal Democrats will immediately match Cameron's pledge to hold an EU referendum, both arguing that it makes no sense to discuss a public vote until the eurozone crisis has been resolved. However, it is also true that they are unlikely to allow Cameron to go into the 2015 election as the only party leader willing to offer the public a say on Europe. The Lib Dems have previously supported an in/out referendum, while senior Labour figures, including Jon Cruddas and Jim Murphy, both argue that a vote should be held at some point in the future. In all probability, then, an EU referendum is coming. But no one should assume it will be Cameron who holds it.

David Cameron speaks during a press conference at the EU headquarters on December 14, 2012 in Brussels. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Even before Brexit, immigrants are shunning the UK

The 49,000 fall in net migration will come at a cost.

Article 50 may not have been triggered yet but immigrants are already shunning the UK. The number of newcomers fell by 23,000 to 596,000 in the year to last September, with a sharp drop in migrants from the EU8 states (such as Poland and the Czech Republic). Some current residents are trying their luck elsewhere: emigration rose by 26,000 to 323,000. Consequently, net migration has fallen by 49,000 to 273,000, far above the government's target of "tens of thousands" but the lowest level since June 2014.

The causes of the UK's reduced attractiveness are not hard to discern. The pound’s depreciation (which makes British wages less competitive), the spectre of Brexit and a rise in hate crimes and xenophobia are likely to be the main deterrents (though numbers from Romania and Bulgaria remain healthy). Ministers have publicly welcomed the figures but many privately acknowledge that they come at a price. The OBR recently forecast that lower migration would cost £6bn a year by 2020-21. As well as reflecting weaker growth, reduced immigration is likely to reinforce it. Migrants pay far more in tax than they claim in benefits, with a net contribution of £7bn a year. An OBR study found that with zero net migration, public sector debt would rise to 145 per cent of GDP by 2062-63, while with high net migration it would fall to 73 per cent.

Earlier this week, David Davis revealed the government's economic anxieties when he told a press conference in Estonia: "In the hospitality sector, hotels and restaurants, in the social care sector, working in agriculture, it will take time. It will be years and years before we get British citizens to do those jobs. Don’t expect just because we’re changing who makes the decision on the policy, the door will suddenly shut - it won’t."

But Theresa May, whose efforts to meet the net migration target as Home Secretary were obstructed by the Treasury, is determined to achieve a lasting reduction in immigration. George Osborne, her erstwhile adversary, recently remarked: "The government has chosen – and I respect this decision – not to make the economy the priority." But in her subsequent interview with the New Statesman, May argued: "It is possible to achieve an outcome which is both a good result for the economy and is a good result for people who want us to control immigration – to be able to set our own rules on the immigration of people coming from the European Union. It is perfectly possible to find an arrangement and a partnership with the EU which does that."

Much depends on how "good" is defined. The British economy is resilient enough to endure a small reduction in immigration but a dramatic fall would severely affect growth. Not since 1997 has "net migration" been in the "tens of thousands". As Davis acknowledged, the UK has since become dependent on high immigration. Both the government and voters may only miss migrants when they're gone.

George Eaton is political editor of the New Statesman.