Farron suggests the Lib Dems will need to toughen their EU referendum stance

At an NS fringe event, the party president said the Lib Dems should "consider very hard" whether to name a date for an in/out vote.

The Liberal Democrat high command is pleased with the way their conference went. There were challenges to the leader’s position that were conspicuous enough to give the impression of a lively, democratic debate and unsuccessful enough to cement the view that Nick Clegg is in absolute command.

One policy that wasn’t much queried from the floor was the line on a European referendum. At the moment, the Lib Dem position is to be pro-EU but also pro-reform and in favour of a referendum in the event of some new treaty being signed that changes the balance of power between London and Brussels. (That also serves as a précis of the Labour position.) But will the line hold? There is some doubt in all parties that Nick Clegg and Ed Miliband can plausibly get through next May’s elections to the European parliament, still less a general election, without a referendum pledge of equivalent certainty to the one that Tory back benchers extracted from David Cameron at the start of this year.

Tim Farron, Lib Dem President, appears to share some of that doubt. I interviewed him on stage at a conference fringe event and the referendum question came up. This is what he said:

"The polling indicates that an in/out referendum – I am a fairly confident, would be won. I don’t think any other referendum on Europe would be but an in/our referendum would be won for hard, pragmatic, economic reasons. We mustn’t be overly shrill about it and we musn’t say ‘we will lose 3m jobs tomorrow if we leave the EU’ because that’s not credible’ …but you’ve already got Nissan saying we would not be in the north-east of England if you were not in the European Union."

I suggested to Farron that the pro-EU argument is constantly held back by the perception of cowardice in the face of hostile public opinion – that europhiles are seen as elitists who are afraid to ask the question in case the "wrong" people give the "wrong" answer. A pro-EU campaign can’t effectively get off the ground, I suggested, until pro-EU politicians are ready to say, in effect: "we aren’t afraid, we’ll have that referendum, we’ll win, bring it on!" Farron’s response was revealing:

"I have a lot of sympathy for that position. I spent a mere three months in the shadow cabinet when I was first appointed to it by Nick because I felt that, on the Lisbon Treaty – I thought we’d lose a referendum – but you can't tell people you don’t trust them. The party’s position is very much in favour of a referendum. I think it's right not to set a date. I think there may be some political wisdom in setting a date but there’s no practical wisdom, because you’ve given your hand away."

But that is the view now. Will the Lib Dems really get through a campaign without a referendum pledge? Will Nick Clegg get through leadership debates when Cameron is saying his is the only party that trusts the people?

"Our line is that there should be a referendum on Europe and we haven’t named a date and I think we probably need to look at that. A referendum is inevitable and we should go and win it. I don’t want to set a date for when it should be but I think we should probably consider very hard if that’s something we want to do because actually if we do that then Tories are in a really bad position. The only advantage Cameron has got is to say there will be a referendum. The minute other people say, ‘yeah there will be a referendum’, Cameron’s in a position where people are saying ‘which side are you going to vote for?’ and his party is split down the middle and they will be like cats in sack. … It’s a very tenuous position he’s in and he must realise that. I predict it won’t last."

That sounded to me as if the Lib Dem position on a referendum is very much up for negotiation.

One final thought: A Ukip source tells me the party is very eager for the Lib Dems and Labour to match Cameron’s referendum pledge. Why? Because Nigel Farage recognises the potency of Cameron’s claim that a Tory government in 2015 could be the only chance Eurosceptics get for a vote on EU membership and that could squeeze the Ukip vote in 2015. Once everyone has a referendum in their manifesto, potential Ukip voters will be freer to bring their anti-everyone, plague-on-all-your-houses instincts all the way into the polling booth instead of "coming home" to the Tories at the last minute. In that analysis, matching Cameron’s line on Europe could be in the crude electoral interests of Labour and the Lib Dems, bolstering the Ukip vote to deprive Cameron of a majority. Whether that is reason enough to do it – the cynicism would shine through and that is hardly a good look for either Clegg or Miliband – is a different question entirely. 

The EU flag flies in front of the European Parliament in Strasbourg. Photograph: Getty Images.

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

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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.