Clegg is propping up Miliband's EU policy

Both pro-EU, both queasy about a referendum. Who will jump first?

In increments the Liberal Democrat position on an EU referendum is shifting towards full-blown commitment. Nick Clegg has already conceded the point that the big question is "when, not if" the British public is invited to choose how European it wants to be. Today, in the first of what are promised to be monthly press conferences, he clarified the point that a referendum on any future EU treaty would necessarily have to be an in/out vote.

This is an important distinction because, under the 2011 European Union Act (aka the “Sovereignty Act”) a referendum on any substantial new treaty is automatic. Well, actually it is semi-automatic. Ministers can still declare a treaty insubstantial in terms of powers being shared in Brussels and block the plebiscite. Largely for that reason, the Sovereignty Act never satisfied eurosceptic Tory back benchers, although their satisfaction was, of course, David Cameron’s only motive for passing the law in the first place.

Now the Sovereignty Act is serving an entirely different purpose. It is the temporary get out clause for Nick Clegg and Ed Miliband. The Labour leader quietly acquiesced to the measure last year, meaning he too has signed up to a referendum in the event of a major treaty revision. All that remains is for Miliband to clarify, as Clegg has done, that this would effectively be an in/out poll and the two parties’ positions will be indistinguishable.

MPs in both parties think that position is unsustainable. Very senior Lib Dems have told me they recognise the implausibility of going into a general election campaign in 2015 without a referendum pledge in their manifesto when they had one in 2010. In other words, the wheel is being turned slowly but the direction is clear enough. By polling day, Clegg will have stripped away the caveats and signed up to national vote on EU membership. There are plenty on the Labour side, including a good number of shadow cabinet ministers, who think Miliband will ultimately have to make the same calculation.

The Tories are confident that their commitment to a referendum appeals beyond the ranks of militant eurosceptics. It is, they say, a point of principle – consulting the people and accepting their judgement. The fact that the Tories would split down the middle when it came to actually deciding how to vote in this great democratic consultation is a worry for after the election. Before polling day the only point that matters to Cameron is that he can insist that his party trusts the people and that labour doesn’t. As I wrote a few weeks ago there is mounting anxiety in the Labour ranks that such an attack has deadly resonance.

Miliband has good reasons for not promising an EU vote. Referendums are a dreadful policy tool. There are plenty of important decisions affecting national sovereignty, trade and international diplomacy that aren’t put to a vast national show of hands. Besides, why would an incoming Labour government want to spend its first year in office organising a campaign that only exists because Cameron (who by this stage would be the ex-leader of the Conservative party) felt bullied into something by his backbenchers, Ukip and their press cheerleaders?

Labour’s position is not as ridiculous as many Tories insist. Those who are obsessed with Europe naturally overestimate how much it matters to everyone else and how relevant it will be to their voting intentions. There is always the possibility that Tories banging on about Brussels stokes the sense of grievance among people who will always feel betrayed by Cameron, while signalling to moderate voters that the Conservatives are uninterested in their concerns. Cameron tends to treat his party's euroscepticism like an itchy rash. He gives into the temptation to scratch it hard, which feels good for a while but only makes it angrier, nastier-looking and harder to ignore in the long term.

So, in theory at least, Labour could hold a line against a referendum insisting that the nation’s priorities are elsewhere. Let Cameron and Co. swivel their eyes in imitation of Ukip, Miliband might say, while those of a more moderate disposition talk about jobs, growth, the cost of living etc. Except Miliband isn’t yet talking about those things in a way that captures the public imagination. Labour seem marooned between their old position of resisting austerity and their election pitch, which will be some variant of fiscal discipline with a conscience.

This Friday, parliament will vote on a Tory backbench motion affirming Cameron’s earlier pledge of a referendum some time in the next parliament. It cannot be legally binding on a successor parliament so its value is entirely symbolic. Labour MPs will for the most part stay away. Nick Clegg today confirmed that, as far as this particular legislative ruse is concerned, the Lib Dem position is again identical to Labour’s. The junior coalition party would not, he said, "waste any time helping the Conservatives indulge in their own internal feuds on the floor of the House of Commons on Friday."

But all the while Clegg is manoeuvring into a position where he accepts the inevitability of a European referendum. When he does so he will also position the Lib Dems as unequivocal and united campaigners for an "in" vote, drawing a clear contrast with the Tories. This poses a new hazard for Miliband, who is as instinctive a pro-European as you will find in parliament these days. If Clegg jumps first and declares himself the pro-referendum, pro-EU candidate, where does that leave the Labour leader? His allies say he will make a decision about Labour’s European policy based on principle alone; that he will not have his agenda dictated by media pressure or tactical Tory games. But by the time he has made up his mind, he could find that the clear positions – for and against; in and out – are taken. Then Labour once again will be left looking like the party that plays catch-up and whose defining approach to tricky issues is a preference not to talk about them.

Nick Clegg and Ed Miliband attend a ceremony at Buckingham Palace to mark the Duke of Edinburgh's 90th birthday on June 30, 2011 in London. Photograph: Getty Images.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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Brexit has opened up big rifts among the remaining EU countries

Other non-Euro countries will miss Britain's lobbying - and Germany and France won't be too keen to make up for our lost budget contributions.

Untangling 40 years of Britain at the core of the EU has been compared to putting scrambled eggs back into their shells. On the UK side, political, legal, economic, and, not least, administrative difficulties are piling up, ranging from the Great Repeal Bill to how to process lorries at customs. But what is less appreciated is that Brexit has opened some big rifts in the EU.

This is most visible in relations between euro and non-euro countries. The UK is the EU’s second biggest economy, and after its exit the combined GDP of the non-euro member states falls from 38% of the eurozone GDP to barely 16%, or 11% of EU’s total. Unsurprisingly then, non-euro countries in Eastern Europe are worried that future integration might focus exclusively on the "euro core", leaving others in a loose periphery. This is at the core of recent discussions about a multi-speed Europe.

Previously, Britain has been central to the balance between ‘ins’ and ‘outs’, often leading opposition to centralising eurozone impulses. Most recently, this was demonstrated by David Cameron’s renegotiation, in which he secured provisional guarantees for non-euro countries. British concerns were also among the reasons why the design of the European Banking Union was calibrated with the interests of the ‘outs’ in mind. Finally, the UK insisted that the euro crisis must not detract from the development of the Single Market through initiatives such as the capital markets union. With Britain gone, this relationship becomes increasingly lop-sided.

Another context in which Brexit opens a can of worms is discussions over the EU budget. For 2015, the UK’s net contribution to the EU budget, after its rebate and EU investments, accounted for about 10% of the total. Filling in this gap will require either higher contributions by other major states or cutting the benefits of recipient states. In the former scenario, this means increasing German and French contributions by roughly 2.8 and 2 billion euros respectively. In the latter, it means lower payments to net beneficiaries of EU cohesion funds - a country like Bulgaria, for example, might take a hit of up to 0.8% of GDP.

Beyond the financial impact, Brexit poses awkward questions about the strategy for EU spending in the future. The Union’s budgets are planned over seven-year timeframes, with the next cycle due to begin in 2020. This means discussions about how to compensate for the hole left by Britain will coincide with the initial discussions on the future budget framework that will start in 2018. Once again, this is particularly worrying for those receiving EU funds, which are now likely to either be cut or made conditional on what are likely to be more political requirements.

Brexit also upends the delicate institutional balance within EU structures. A lot of the most important EU decisions are taken by qualified majority voting, even if in practice unanimity is sought most of the time. Since November 2014, this has meant the support of 55% of member states representing at least 65% of the population is required to pass decisions in the Council of the EU. Britain’s exit will destroy the blocking minority of a northern liberal German-led coalition of states, and increase the potential for blocking minorities of southern Mediterranean countries. There is also the question of what to do with the 73 British MEP mandates, which currently form almost 10% of all European Parliament seats.

Finally, there is the ‘small’ matter of foreign and defence policy. Perhaps here there are more grounds for continuity given the history of ‘outsourcing’ key decisions to NATO, whose membership remains unchanged. Furthermore, Theresa May appears to have realised that turning defence cooperation into a bargaining chip to attract Eastern European countries would backfire. Yet, with Britain gone, the EU is currently abuzz with discussions about greater military cooperation, particularly in procurement and research, suggesting that Brexit can also offer opportunities for the EU.

So, whether it is the balance between euro ‘ins’ and ‘outs’, multi-speed Europe, the EU budget, voting blocs or foreign policy, Brexit is forcing EU leaders into a load of discussions that many of them would rather avoid. This helps explain why there is clear regret among countries, particularly in Eastern Europe, at seeing such a key partner leave. It also explains why the EU has turned inwards to deal with the consequences of Brexit and why, although they need to be managed, the actual negotiations with London rank fairly low on the list of priorities in Brussels. British politicians, negotiators, and the general public would do well to take note of this.

Ivaylo Iaydjiev is a former adviser to the Bulgarian government. He is currently a DPhil student at the Blavatnik School of Government at the University of Oxford

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