Cameron's EU referendum pledge leaves Labour in a difficult position

If Miliband matches Cameron's referendum offer, he will look weak. If he doesn't, he will look undemocratic. Which will he choose?

David Cameron's speech on the EU was driven not by policy but by politics. Six months ago, the Prime Minister had no intention of promising an in/out referendum on the EU but his recalcitrant backbenchers and an insurgent UKIP forced him into a dramatic reverse ferret. His address, then, was less about outlining a sophisticated vision for the future of the EU (one that Cameron's fantasy of an à la carte Europe, in which Britain picks and chooses which rules it obeys, does not represent) but simply about getting him through the 2015 general election. 

On that limited basis, the speech may prove to be a success. The early reaction from eurosceptic MPs, such as Douglas Carswell, suggests that it will help to unify a Conservative Party that has been badly divided over the EU since the election. 

The biggest long-term problem for Cameron remains that having promised a "fundamental change" in Britain’s relationship with the EU, he will struggle to persuade the eurosceptics in his party that it is in our interests to remain a member if he fails to deliver. The result would be the worst Tory split for decades as some cabinet ministers, such as Iain Duncan Smith and Owen Paterson, argued for an 'out' vote, while others argued for an 'in' vote. But that, if Cameron wins a majority at the general election (and it remains a very large 'if'), is not an issue he will have to face until long after 2015. 

For now, the Prime Minister enjoys the distinction of being the only party leader to have promised to give the electorate a vote over the EU at some point in the near future. This leaves Labour and the Liberal Democrats, both of whom have argued that Cameron's pledge is a rash one, in a difficult position. If they seek they match his offer at some point before 2015 (most likely in the form of a straight in/out vote, rather than one tied to renegotiation), they will look weak; following, not leading. If they do not, they will stand accused of denying the British people a say over an institution that has changed dramatically in the 38 years since the first and only EU referendum in 1975. Will Miliband and Clegg allow Cameron to be the only leader to stand up at the TV debates in 2015 and promise a referendum on the EU? Almost certainly not, which is why both must now work out how to climb down in the most graceful and painless way possible. 

George Eaton is political editor of the New Statesman.

Photo: Getty Images
Show Hide image

Autumn Statement 2015: George Osborne abandons his target

How will George Osborne close the deficit after his U-Turns? Answer: he won't, of course. 

“Good governments U-Turn, and U-Turn frequently.” That’s Andrew Adonis’ maxim, and George Osborne borrowed heavily from him today, delivering two big U-Turns, on tax credits and on police funding. There will be no cuts to tax credits or to the police.

The Office for Budget Responsibility estimates that, in total, the government gave away £6.2 billion next year, more than half of which is the reverse to tax credits.

Osborne claims that he will still deliver his planned £12bn reduction in welfare. But, as I’ve written before, without cutting tax credits, it’s difficult to see how you can get £12bn out of the welfare bill. Here’s the OBR’s chart of welfare spending:

The government has already promised to protect child benefit and pension spending – in fact, it actually increased pensioner spending today. So all that’s left is tax credits. If the government is not going to cut them, where’s the £12bn come from?

A bit of clever accounting today got Osborne out of his hole. The Universal Credit, once it comes in in full, will replace tax credits anyway, allowing him to describe his U-Turn as a delay, not a full retreat. But the reality – as the Treasury has admitted privately for some time – is that the Universal Credit will never be wholly implemented. The pilot schemes – one of which, in Hammersmith, I have visited myself – are little more than Potemkin set-ups. Iain Duncan Smith’s Universal Credit will never be rolled out in full. The savings from switching from tax credits to Universal Credit will never materialise.

The £12bn is smaller, too, than it was this time last week. Instead of cutting £12bn from the welfare budget by 2017-8, the government will instead cut £12bn by the end of the parliament – a much smaller task.

That’s not to say that the cuts to departmental spending and welfare will be painless – far from it. Employment Support Allowance – what used to be called incapacity benefit and severe disablement benefit – will be cut down to the level of Jobseekers’ Allowance, while the government will erect further hurdles to claimants. Cuts to departmental spending will mean a further reduction in the numbers of public sector workers.  But it will be some way short of the reductions in welfare spending required to hit Osborne’s deficit reduction timetable.

So, where’s the money coming from? The answer is nowhere. What we'll instead get is five more years of the same: increasing household debt, austerity largely concentrated on the poorest, and yet more borrowing. As the last five years proved, the Conservatives don’t need to close the deficit to be re-elected. In fact, it may be that having the need to “finish the job” as a stick to beat Labour with actually helped the Tories in May. They have neither an economic imperative nor a political one to close the deficit. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.