The case for a Labour EU referendum pledge is weaker than ever

Promising an in/out vote would shift the debate back onto Tory territory and could wreck a future Miliband premiership.

The arrival of Tory MP James Wharton's EU referendum bill (which would enshrine in law his party's pledge to hold a vote by the end of 2017 and has the support of the Conservative leadership) in the House of Lords is likely to set off another round of speculation over Labour's position. While Ed Miliband and Douglas Alexander have consistently criticised Cameron's pledge on the grounds that it creates unnecessary uncertainty, they have been careful not to rule out the possibility of Labour promising a referendum in its 2015 manifesto. 

Asked on the Today programme this morning "how stupid" Miliband would have to be to promise a vote, Peter Mandelson replied: "I don't think that he should do so in the run-up to the next election, but I also think he’s right not to set Labour up against a referendum in any circumstances." He went on to warn that a referendum was "a very blunt instrument" that "needs to be handled with great care". On this, Miliband undoubtedly agrees. One shadow cabinet minister recently told me that the Labour leader was "instinctively opposed" to a referendum whenever the issue was discussed. This is not least because Miliband recognises that he has a good chance of being in power after the next election and does not want the opening years of his premiership to be dominated by a vote that a Labour government would find harder to win than a Tory one. A public vote to leave the EU in 2017, against Miliband's wishes, would shatter his authority. 

Despite this, some Labour figures privately suggest the party could reverse its stance following this May's European elections as evidence that it has "listened and learned" (not least if UKIP tops the poll). Cameron's charge that Labour is unwilling to "trust the people" is one they fear will haunt them during the general election campaign. Yet there is no evidence that the Tories' pledge will succeed in winning back significant numbers of voters from UKIP, most of whom have far greater grievances, or that it will define the election in the way that some Conservatives hope.

As polling by Ipsos MORI regularly shows, the EU does not even make it into the top ten of voters' concerns. Lord Ashcroft's recent study of Tory-leaning voters found that an EU referendum is "a sideshow" for most of them. He wrote: "A surprising number of those we spoke to did not realise it was even on the agenda, and were nonplussed when they found out it was. Those for whom it is important know all about it (though they sometimes doubt it will come to pass even if the Tories win). But to make it a major theme of the campaign would be to miss the chance to talk about things that matter more to more people." If there is an electoral cost to Labour from refusing to match Cameron's promise, it will likely be too small to make a difference. 

Far from being a clever ruse to enhance the party's standing, a Labour pledge would shift the debate back onto Tory territory and allow Cameron to claim that a "weak" Miliband is dancing to his tune. As the Labour leader himself said when Wharton's bill was being debated in the Commons, "I think what we see today is the Conservative Party talking to itself about Europe when actually what they should be doing is talking to the country about the most important issue that people are facing, which is the cost of living crisis. That’s what Labour’s talking about; that’s the right priority for the country." 

Miliband and Douglas Alexander have long made a coherent case against a referendum. As Tory MPs continue to disregard warnings from Ashcroft and others not to "bang on" about Europe, they should hold their nerve.

Ed Miliband with shadow foreign secretary Douglas Alexander at the Labour conference in Brighton earlier this year. Photograph: Getty Images.

George Eaton is 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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