Cameron says "renegotiation", Conservative MPs hear "exit"

The Prime Minister's European strategy relies on an act of persuasion that he has proved himself incapable of pulling off.

No-one needs any more evidence that many Tory MPs don’t trust what their leader when he says when it comes to the European Union (or much else). If they did, they would have accepted his pledge in January that a referendum would be held in 2017, once the terms of British membership of the club have been renegotiated - and presuming Cameron is still prime minister after the next election.

But Conservative MPs have found that a Cameron promise doesn’t impress Ukip-minded voters on the doorstep and they struggle to defend their leader’s pledge-keeping credentials. (Members of the PM's entourage calling the activist base "swivel-eyed loons" is not going to quickly thaw relations between the leadership and the grass roots.) Hence the insistence on a bill this side of an election, restating the determination to put EU membership up for a national vote. Number 10 agreed to back such a move out of desperation to prove that the Prime Minister meant what he said back in January.

And no doubt he did. But there are two parts to Cameron’s EU strategy. The referendum is supposed to follow the renegotiation. Much more media coverage and political energy has been consumed on the promise of a vote than on the practicality of getting a good deal out of Britain’s European partners. It is worth noting, for example, that Nigel Lawson’s recent intervention on the subject attracted a great deal of attention because he said he would vote to quit the EU. Less remarked upon was the reason he gave as to why he can be so sure of that decision already. He doesn’t think renegotiation will work. And he’s right.

As I’ve written before, it is almost impossible to imagine Cameron securing a compromise on the UK’s current level of European integration that would satisfy his party because, almost by definition, compromise in Brussels is perceived as capitulation. The EU exists to facilitate cross-border collaboration at a political and not just an economic level and that process is what affronts the sensibilities of the sceptics.

I offer here one modest proof of how phenomenally hard it will be for Cameron to concoct a European settlement to satisfy his members. Writing in the Times last week, Robert Halfon, MP for Harlow in Essex, got stuck into the big oil companies for alleged price fixing. Halfon is a very effective constituency MP, a clever man and a popular figure on the Tory benches. He has been very influential in pushing the sensible idea that Conservatives should be focused on the cost of living and addressing more directly the concerns of working and lower-middle-class voters. He has campaigned on the issue of fuel costs with considerable success. He is respected on both sides of parliament. So what does this have to do with Europe? Halfon explains half-way through the piece:

We need regulators who are hungry for justice, and who have the right powers to pursue it. The Office of Fair Trading should have been pushing the European Commission to investigate, rather than holding last year’s spineless inquiry that came to almost no useful conclusions. Real EU renegotiation would mean bringing these investigatory powers back to Britain.

Halfon is dismayed that British competition authorities appeared to be asleep on the job, leaving it up to the European Commission to get tough on the oil giants. His solution is the repatriation of powers from Brussels. As far as I am aware this doesn’t appear on any list of realistic demands that Cameron might make of his European partners. The UK is subject to European competition law because we are in a single market and because British businesses want a level playing field when trading or merging with businesses in other countries and acquiring assets there. Even if we left the EU, British enterprises that wanted to engage in international commerce would comply with European competition law.

If Tory MPs want the OFT and the UK competition commission (which are in the process of being combined) to be tougher, are they supposed to be more rigorous in the enforcement of European rules? That is a question of greater zeal not repatriation of powers? Or are they supposed to apply some different, yet-to-be-drafted laws? In that case UK companies operating in the rest of Europe would have to comply with two sets of rules instead of one?

But the whole question is purely academic. Cameron will not put powers of competition regulation on his list of things to bring home from Brussels. He knows – if indeed he’s thought about it at all – that it can’t be done. So when Halfon says “real EU renegotiation” he means “impossible, fantasy renegotiation.” Or, put another way, by “renegotiation” he means “exit.” That is what most Tories now seem to mean by renegotiation.

The message from the Conservative party to their leader is clear. There is really nothing he can practically do or say that will persuade them to vote “yes” to the question of whether Britain should remain in the EU. Yet Cameron’s entire strategy hinges on accomplishing that act of persuasion.

David Cameron stands alone in Brussels. Source: Getty

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

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Is TTIP a threat or an opportunity?

TTIP offers potentially huge opportunities to both Europe and the US - we should keep an open mind on what the final agreement will mean.

Barack Obama made it abundantly clear during his visit to the UK that if Britain left the European Union then it would be quite some time before we would be able to negotiate a trade deal with the United States. All the more reason to examine carefully what the Transatlantic Trade and Investment Partnership (TTIP) will mean for the UK. For Labour this is especially important because a number of trade unionists and Party members have expressed concerns about what TTIP could mean.

The economic worth of such a partnership between the European Union and the US has been questioned and it has been frequently stated that TTIP could give multinational companies unprecedented influence and undermine the British NHS.

With regard to the economic benefits of TTIP there are few that would argue that there are no economic gains to be achieved through the partnership. The question is to what extent economic growth will be stimulated. On the positive side the European Commission has argued that an agreement could bring economic gains of between €68 billion to €119 billion per year to the EU (0.3% to 0.5% of GDP) and €50 billion to €95 billion (0.2% to 0.4% of GDP) to the US. For Britain, this means that an agreement could add up to £10 billion annually to the UK economy.

On the negative side, a study commissioned by the European United Left/Nordic Green Left Group in the European Parliament has maintained that TTIP would bring only “limited economic gains”. These gains have to be weighed, it was argued, against the “downside risks”. Those risks have been identified as coming from the alignment of standards in areas such as consumer safety, environmental protection and public health.

These are important concerns and they should not be quickly dismissed. They are made all the more important because the existence of already low tariffs between the EU and the US make the negotiations to reduce non-tariff barriers to trade all the more significant.

There are a number of areas of concern. These include food standards and the regulation of GM crops and the worry that the EU’s focus on applying the environmental precautionary principle might be weakened. The European Commission, which has a responsibility for negotiating TTIP on behalf of the EU, is however acutely aware of these concerns and is mindful of its legal responsibility to uphold, and not to in any way weaken, the agreed legal standards to which the EU adheres. A concern has been expressed that irrespective of what European law may say, TTIP could undermine those standards. This I find difficult to accept because the ‘rule of law’ is absolutely central to the negotiations and the adoption of the final agreement.

But the EU is mindful of this concern and has brought forward measures which have sought to address these fears. The latest proposals from the Commission clearly set out that it is the right of individual governments to take measures to achieve public policy objectives on the level that they deem appropriate. As the Commission’s proposal states, the Agreement shall not affect the right of the parties to regulate within their own territories in order to achieve policy objectives including “the protection of public health, safety, environmental or public morals, social or consumer protection or promotion and protection of cultural diversity”.

Of course, this is not to suggest that there should not be vigilance, but equally I believe it would be wrong to assume the theoretical problems would inevitably become reality.

The main area of concern which has been expressed in Britain about TTIP relates to the NHS and the role of the private sector. Under the Investor-State Dispute Settlement (ISDS) provisions investors would be able to bring proceedings against a foreign government that is party to the treaty. This would be done in tribunals outside the domestic legal system. If a Government is found to be in breach of its treaty obligations the investor who has been harmed could receive monetary compensation or other forms of redress.

The concern is that the ISDS arrangements will undermine the ability of democratically elected governments to act on behalf of their citizens. Some have maintained that measures to open up the NHS to competition could be made irreversible if US companies had to be compensated when there is a change of policy from a future Labour Government.

In response to these concerns the European Commission has proposed an Investor Court System. This would be based on judgements being made by publicly appointed and experienced judges and that cases would only be brought forward if they were precisely defined. Specifically, it is proposed that cases would be limited to targeted discrimination on the basis of gender, race or religion, or nationality, expropriation without compensation or the denial of justice.

Why, you might ask, is there a need at all for a trans-national Investor Court System? The reason in part lies in the parlous state of the judicial systems in some of the relatively recent EU accession countries in Eastern Europe. To be frank, it is sadly the case that there are significant shortcomings in the judiciary of some countries and the rule of law is, in these cases, more apparent than real. It is therefore not unreasonable for investors to have an international framework and structure which will give them confidence to invest. It should also be noted that there is nothing proposed in TTIP which contradicts anything which is already in UK law.

We need to remember too that this is not only about US investment in Europe, it is also about European investment in the US. No US-wide law prohibits discrimination against foreign investors, and international law, such as free trade and investment agreements like TTIP, cannot be invoked in US courts. The Investor Court System would therefore benefit European companies, especially Small and Medium Sized Enterprises. 

It is of course impossible to come to a definitive conclusion about these provisions because the negotiations are ongoing. But it would surely be unwise to assume that the final agreement would inevitably be problematic.

This is especially true regarding the NHS. Last year Unite the Union commissioned Michael Bowsher QC to provide an opinion. His opinion was that “TTIP does pose a threat to a future government wishing to take back control of health services”. The opinion does not express a view on whether TTIP will “force” the privatisation of the health service (as some have claimed) and Bowsher admits that much of the debate is “conducted at a rather speculative level” and he has been unable to produce any tangible evidence to support his contention about future problems. On the other hand, it is the case that there is nothing in the proposed agreement which would alter existing arrangements for compensation. There are of course many legal opinions which underpin the view that existing legal arrangements would continue. While I accept that it is theoretically possible for the Bowsher scenario to occur, it is nevertheless extremely improbable. That is not to say that there ought not to be watertight safeguards in the agreement, but let us not elevate the extremely improbable to the highly likely.

A frequently heard criticism of TTIP is that the negotiations between the US and the EU are being conducted in ‘secret’.  Greenpeace, for example, has strongly sought to make this a central part of their campaign.  Although the Commission publishes EU position papers and negotiating proposals soon after they are tabled, it is impossible to see how complex negotiations of this kind can be practically conducted in public.  However, I believe that the draft agreement should be made public well before the final decisions are taken.

Once the negotiations have been concluded, the draft agreement will be presented to the European Council and the European Parliament, both of which have to agree the text. The European Council is, of course, made up of representatives of the governments of the EU and the European Parliament is democratically elected. Both Houses of the British Parliament will also debate the draft and there will need to be parliamentary approval of the agreement.

Transparency and democratic scrutiny are two things which there cannot be too much of. But, in practical terms, it is difficult to see how there could be more of either without making it nigh on impossible to secure such a complex agreement. Unite, of which I am a member, and others are quite right to express their concerns about TTIP, but let’s not exaggerate the potential difficulties and let’s not assume that the worst case scenario will always come about. TTIP offers potentially huge opportunities to both Europe and the US, and we should therefore at least keep an open mind on what the final agreement will mean.

Wayne David is the Labour MP for Caerphilly and is Shadow Minister for Political Reform and Justice. He is a former Shadow Europe Minister and was a junior minister in the last Labour government.