speri.comment: the political economy blog

In or out of Europe?

Coming to terms with the political realities of the European project is essential if Britain is to make up its mind about Europe

Andrew Gamble, Professorial Fellow at SPERI

Andrew Gamble

Andrew Gamble

David Cameron’s long-delayed speech on Europe has been presented as a watershed moment in Britain’s vexed relationship with the EU, but its main purpose is to reduce some of the tensions within the Conservative party, to get the Conservative media off his back, and to staunch the loss of votes to UKIP which has begun to threaten Conservative prospects at the next election.

Cameron is promising to begin a negotiation with his European partners to secure a new relationship, one involving less Europe rather than more Europe. He will then put the result of the negotiations to the British people in a referendum probably in 2017, assuming he is still Prime Minister.

A No vote will bring down the Government, since Cameron intends to campaign for Britain to stay within the European Union. A large part of his party will not regard any terms that keep Britain within the European Union as satisfactory and will therefore campaign for a No vote. The European Union is likely to offer some token return of powers to the UK, most likely the reinstatement of the opt-out on the social chapter which John Major negotiated and Tony Blair abandoned.

But it is very unlikely to offer enough to satisfy even mainstream Eurosceptics like the Fresh Start group, since to do so would invite other member-states to request their own negotiation, and the unravelling of the careful set of compromises and agreements built up over sixty years.

David Cameron is likely to face a difficult choice.

If he is re-elected he will be committed to negotiations and a referendum that he might well lose. Either he will need to find some excuse to abandon that commitment, as he did over holding a referendum on the Lisbon Treaty, or he will have to tell the nation that the renegotiations have failed, and that he now advocates that Britain leaves the EU.

The puzzle is why he is not prepared to do so now. He has refused to hold a mandate referendum before the next election to strengthen the Government’s negotiating position partly because it would not get through the Commons and might break the Coalition, but also because he does not want his hands tied ahead of negotiations.

But why is he against a manifesto commitment to hold an In/Out referendum immediately after the next election, with the Conservatives campaigning for Out? He would be acclaimed by the majority of his backbenchers and by the Conservative press. Overnight he would become the most popular Conservative leader since Margaret Thatcher. It would extinguish the threat from UKIP and reunite the forces of the Centre-Right. The small Europhile section of the party might depart, but as compensation there would be a clear dividing line with both the Liberal Democrats and Labour.

Why does Cameron not adopt a policy which would be so obviously advantageous to him in party terms and secure his leadership, even if he lost the election?

His instincts are Eurosceptic, yet he is putting all his energies into finding a solution which keeps Britain in Europe. Why is it so important for Britain to stay in Europe? One answer is that this is what business wants. But is it? The reality is that British business is divided over the EU.

Most large companies, represented by the CBI, strongly support Britain’s continued membership because it guarantees British companies access to the single market and British Government continuing involvement in writing the rules of that market. But many smaller British companies and some large ones argue that the costs of membership outweigh the benefits, and that Britain would be better off withdrawing from the EU and regaining its commercial independence.

A different answer is that British governments remain in the EU because of wider geopolitical considerations. The US wants Britain to stay, because Britain outside the EU would be less useful to it, and American ability to influence the direction of the EU would be reduced. This reinforces the traditional British policy of preventing one single power dominating the European continent.

Jacques Delors and the European federalists have recently suggested that the EU has a very small engine and that the UK is a very big brake, and that it would be in everyone’s interest if Britain was to leave the EU, and be accorded instead a privileged associate status, similar to Norway and Switzerland. This would guarantee access to the single market, but Britain would no longer participate in the political institutions, or hold a veto.

Delors became an overnight hero to Eurosceptics. But Cameron instantly rejected the idea.

Like Thatcher before him he is not prepared to surrender the advantages of influencing the future direction of the single market from the inside. This exposes the divide between Britain and its European partners. The British pretend that the EU is no more than a trading arrangement. But it has always been much more than that – a conscious political choice to pool sovereignty for common ends. The British knew that from the beginning, but have generally been in denial about it.

Cameron asserts that the EU has no legitimacy for the British people. If the British do not want to be part of a political association, then they should leave, and negotiate a new trading relationship. The rest of the EU will never accept that it is only a commercial association. British politicians never make a political case for Europe and are only willing to justify membership in terms of economic benefits.

Yet they still want to retain the political advantages of full membership, so the issue is never resolved, because returning a few powers to Westminster will not assuage Euroscepticism. The economic case for being in the EU will never be decisive, just as it was not for joining the euro. The decisive argument was, and always will be, political. Britain should hold an In/Out referendum now and make up its mind.

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