Miliband waits in hope that the Tories’ counterfeit consensus on Europe will unravel

MPs who last year wanted the Labour leader to trump Cameron by calling for a snap poll on Europe say the moment has passed.

Conservatives have given up trying to agree on whether Britain should be a member of the European Union. They have settled instead for a lesser harmony, agreeing that the matter should be settled by a referendum. They cheer through parliament a symbolic bill stipulating that such a vote be held by the end of 2017.

This counterfeit consensus has obvious charm for Tory MPs. It allows them to say with a straight face that the party is united on Europe. The moment of choice is deferred. Since the EU is evolving, none but the most determined quitters feel sure that in four years’ time it will still be the kind of union Britain should leave. What Conservatives can say with certainty is that David Cameron wants a referendum and Ed Miliband doesn’t, which feels like a great advantage to a party with an inflated sense of national grievance against Brussels.

The Tories are so proud of their plebiscite pledge that they keep expecting Miliband to copy it. The Labour leader is under frequent pressure to do just that from those on his own side who find their present stance untenable. Officially, the party prefers the prospect of governing without a referendum, while accepting that any new EU treaty would trigger one automatically. Some of the leader’s closest allies concede that something less slippery must be declared before too long.

The range of options is narrowing. Until recently some on the Labour side entertained the idea of hijacking the Tories’ backbench bill with demands for a vote this side of a general election, thereby sowing discord in the Conservative ranks. That ruse was killed when Adam Afriyie, a Tory MP of guileless ambition, tabled just such an amendment and found his colleagues slow to schism.

That reaction convinced Labour provocateurs that there was less mischief to be made in alliance with rebellious Tories than they had previously thought. MPs who last year wanted Miliband to trump Cameron by calling for a snap poll on Europe say the moment for such a gambit has passed. “That particular bus has left the station,” says one shadow cabinet supporter of a referendum.

The next bus – and the one some in Miliband’s entourage are most interested in boarding – leaves next May when there are elections for the European Parliament. Declaring support for an in/out referendum in the run-up to that poll gives Labour cover to say its agenda has been set by the natural rhythms of a campaign timetable. At any other moment, it would too conspicuously be a panicky reaction to Tory taunts.

The need to be seen doing things “on his own terms, in his own time” (as one aide likes to put it) is of paramount importance to Miliband. The Conservatives want to portray him as out of his depth – a peddler of desperate ruses unsuitable for mature government. So the worst of all outcomes for the Labour leader would be a half-hearted manoeuvre in which the political gain of signing up to a referendum is cancelled out by his inability to make it sound like something he really wants to do.

Set against that risk is the folly of fighting a general election campaign in which Cameron can claim to be the only potential prime minister who trusts the people to choose their European destiny. That line may not stir millions of hearts but it might steer some Ukip dabblers back to the Tory fold.

Nigel Farage is keener than anyone for Miliband to sign up to a referendum so that Cameron’s pledge loses its unique sheen. The Ukip leader thrives on the public feeling that the “established” parties are interchangeable and that the only way to make a difference is by voting for none of them. Where Ukip does well, Labour can snatch seats from the Tories, so there is a perverse incentive for Miliband to satisfy Farage, spoiling the potency of Cameron’s referendum by making it a point of banal Westminster concord.

That calculation is part of a general equation governing Labour’s position on referendum: the likelihood of a pledge grows as long as the party’s opinion poll lead stays narrow. Yet changing the policy opens a whole new set of dilemmas for Miliband. He would have to say when he imagines calling the vote and whether, like Cameron, he proposes renegotiating the terms of British membership first. Neither question has an easy answer.

One modest consolation is that Cameron’s renegotiation plans are going nowhere. The Prime Minister has quietly downgraded his ambition from an Anglocentric “repatriation” of powers to a campaign for vaguer pan-EU “reform”. The kind of exceptional status for the UK that hardline Tory sceptics demand isn’t even on the agenda when Cameron meets fellow Continental leaders.

The small troupe of pro-EU Tories support their leader on what appears to be a secret mission to shrink expectations of a new settlement with Brussels. They also hope the prospect of a referendum will provoke business leaders – including Conservative donors – into making the case for staying in the club. (A recent call by the CBI for constructive European engagement is cited as the start of a fightback against the “Brexit” brigade.) The ultimate goal is to shift the party’s centre of gravity back towards pragmatic acceptance of EU membership, leaving the irreconcilables marginalised. “We are smoking out the ones who are definitely voting ‘out’ at all costs,” says one Conservative Europhile.

Many Tories have drunk Cameron’s rhetoric as if it were a Eurosceptic tonic, seemingly unaware that its purpose is to numb their rebellious urges. The anaesthetic draught cannot work forever; the old pangs of betrayal will return. There may be loftier elements in Labour’s European calculations but at their core is a gamble on whether the effects of Cameron’s dodgy potion to unite the Tories wears off before Miliband is forced to serve up a referendum brew of his own.

David Cameron speaks during a press conference at an EU Council meeting on October 25, 2013 in Brussels. Photograph: Getty Images.

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

This article first appeared in the 06 November 2013 issue of the New Statesman, Are cities getting too big?

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.