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About the Author
Roger Liddle is co-chair of Policy Network and became a life peer in 2010. He was formerly Tony Blair’s special adviser on European policy and subsequently worked for three years in the European commission, first in the trade commissioner’s cabinet and then advising the president of the commission. He has been at the heart of the Europe debate for two decades, with detailed knowledge of both the politics and public policy. Roger has written extensively on European and British affairs, including The Blair Revolution (with Peter Mandelson, 1996), Global Europe, Social Europe (with Anthony Giddens and Patrick Diamond, 2006), Beyond New Labour (with Patrick Diamond, 2009), The Europe Dilemma: the Drama of EU Integration (2014), and The Social Reality of Europe Ater the Crisis (with Patrick Diamond and Daniel Sage, 2015), and he is author of several other Fabian Society and Policy Network pamphlets.
He also coauthored two papers for the president of the European commission’s thinktank, the Bureau of European Policy Advisers, on Europe’s Social Reality (February 2007) and the Single Market: Yesterday and Tomorrow (July 2006), and since then has contributed to various edited collections on the single market, the social challenges facing Europe, the case for a social investment strategy and Britain’s European policy.
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The Risk of Brexit
The Politics of a Referendum
By Roger Liddle
Rowman & Littlefield Publishing Group, Inc.Copyright © 2016 Policy Network
All rights reserved.
THE REMORSELESS LOGIC OF CONSERVATIVE DIVISION ON EUROPE
The promise of an in-out referendum on Britain's EU membership was something that David Cameron never wanted to make. When he ran for the Conservative leadership in 2005 a central part of his analysis of why the Conservatives had lost three successive general elections was their perceived obsession with Europe. In his first speech as leader to a Conservative conference in October 2006, he could not have been more emphatic:
Instead of talking about the things most people care about, we talked about what we cared about most. While parents worried about childcare, getting the kids to school, balancing work and family life – we were banging on about Europe.
Since going into opposition in 1997, the Conservatives had struck highly Eurosceptic positions, opposing the ratification of every single one of the four European treaties that the Labour government signed and making the commitment that under the Conservatives, Britain would "never" join the euro. Cameron's objection was not apparently to the substance of these positions, but to the priority the Conservatives had given them in their campaigning and public image. On the issue of substance, no one quite knew where he stood. No one imagined he was a pro-European enthusiast. As a young man, he had joined Conservative central office in the late 1980s at a point when Margaret Thatcher's Bruges speech had set a new, more sceptical tone. He then worked as a special adviser for Norman Lamont and Michael Howard, both leading Eurosceptics. Yet for all that, it is difficult to believe that someone of his naturally conservative disposition, rooted in his comfortable stockbroker background in the Berkshire countryside, would see his place in history as leading Britain out of the European Union.
The Conservatives still stood on the ground defined by both parts of the slogan that William Hague had coined in 1999, "in Europe, not run by Europe". No one disputed that there existed within their ranks what was often dismissed as a strong anti-European 'fringe'. However, the 'fringe' now penetrated to the 'core' with the cabinet itself containing a significant number of hardcore sceptics. At the height of the euro crisis in 2011–12, James Forsyth, the respected Spectator columnist, estimated that nine Conservative cabinet members were perfectly relaxed about the possibility of UK withdrawal.
Cameron himself presented an ambiguous stance. On becoming prime minister in 2010, Cameron refused to go back on the pledge he had made in his 2005 leadership campaign to withdraw Conservative MEPs from the European People's party (EPP) group in the European parliament. Instead they formed the European Conservatives and Reformists grouping (ECR) of anti-integrationist MEPs, along with the Polish Law and Justice party and others from mainly small eastern European parties, among whose number were members with an unsavoury antisemitic and homophobic past. Cameron had made his pledge on the EPP under duress in the early stages of the Conservative leadership election. He did it in order to win over a crucial handful of Eurosceptic MPs who had been supporters of Liam Fox (who was to become Cameron's short-lived first defence secretary). Yet it was telling that Cameron proved unwilling to reverse this commitment, despite being fully aware of the very real loss of credibility and influence in Europe that the decision would cause. By it, not only did Cameron preclude his party from major roles in the European parliament, he equally excluded himself from the influential, regular leaders' meetings that always precede European councils.
His decision greatly upset the German Christian Democrats, including Angela Merkel personally, who set great store by the development of pan-European political links between 'respectable' centre-right parties with a pro-EU, pro-social market orientation. In response Cameron launched a charm offensive with the German chancellor, which convinced her that he genuinely wanted to keep Britain in the EU. This relationship is fundamental to any prospect of Cameron's successful renegotiation, but Cameron has only gradually come to realise that Germany alone cannot deliver for Britain and that German chancellors have other pressing priorities besides keeping Britain in the EU.
Cameron's decision to press ahead with Conservative withdrawal from the EPP was symptomatic of what became his general approach on Europe. It was that of the tactical Eurosceptic appeaser. Despite his evident admiration for Blair, he did not follow Blair's example over clause IV, in deliberately engineering a battle against the hardline Eurosceptics within his party to rid it of one of the most damaging shibboleths that since the 1990s had weakened both its public credibility and its capacity to govern.
Rather, time and again the prime minister has retreated in the face of Eurosceptic pressure. With his activists Cameron chose to avoid a direct challenge to their prejudices and assumptions: on Europe there was nothing to compare, for instance, with his firm stand on gay marriage. In 2010, Cameron must always have been aware of the risk he was running inside the Conservative party on the European question: that at some point, an EU development of some kind would cause Europe to come back as an issue to haunt the Conservatives. But his short-termist mindset led him to take the risk of assuming nothing dramatic was in prospect that would threaten the weak consensus in support of British membership that had been established in the UK after Blair's failure to take Britain into the euro. He reckoned without the impact on his party of the eurocrisis.
Cameron first entered office in 2010 with little political capital in the bank. For all his strength of personality, his natural presence and command, and Gordon Brown's weakness as his opponent in the 2010 election, the Conservatives failed to win an overall majority. His leadership failed the ultimate test of politics. In 2010, the Conservative share of the vote on 36 per cent was some six to eight per cent lower than the 42–44 per cent share the Conservatives consistently won from 1979, when Margaret Thatcher last ejected Labour from office, to 1992, when the Conservatives had last won a general election under John Major. In the aftermath of the inconclusive 2010 result, Cameron moved swiftly to enter into a five-year coalition agreement with the Liberal Democrats – without the wider party consultation that his coalition partners undertook. Arguably the fragile state of the economy required a strong and stable government, which to a remarkable degree the coalition managed to provide. However, this was not Cameron's only option: an alternative would have been to form a minority government as the largest party and hold another general election within a year or so. This would have followed the precedent of Harold Wilson who had formed a minority government in similarly grave economic circumstances in February 1974 and went on to win a small overall majority in a second general election that October. Many Conservatives would have preferred Cameron to have taken that risk. Few accepted the leadership's argument that the government of the country was strengthened by the very act of forming the coalition. Dislike of the coalition was commonplace at the party grassroots and among MPs outside the Cameron/Osborne 'magic circle', particularly those disappointed by their failure to secure office. Dislike of the constraints that their Liberal Democrat coalition partners were assumed to impose on the government's European policy was part of the reason.
One might have expected the unexpected Conservative victory in May 2015 to have transformed Cameron's political strength. This is only true in part. In sections of the Conservative party he is still seen as a tactical politician, rather than someone motivated by deep beliefs – still less ideology. This adds to the sense that his planned renegotiation is a cynical exercise designed to secure a successful yes outcome in the referendum for remaining in the EU. This sticks in the gullet of the genuine Eurosceptic. Cameron has also complicated his position by announcing that he will not seek re-election as prime minister in 2020. While on the one hand this may liberate him to do what he thinks right for the country, there are many in the party who will resent any sense that he is putting his 'legacy' before Conservative party interests. This was certainly Blair's experience in the mid-2000s with an increasingly restive parliamentary Labour party. His pre-announcement of his retirement also motivates all his potential successors to judge his European renegotiation in terms of how it advances their personal prospects for the succession. This has set up a dynamic of division that he may find difficult, if not impossible, to control.
Initially, however, Cameron wanted to avoid tackling the European question at all. Before 2010, his desire that the Conservatives "stop banging on about Europe" had been helped by events. By the late 2000s, Europe had faded as a political concern. The Conservative attempt to demand a referendum on the Lisbon treaty between 2007 and 2009 never really took off. Europe barely featured as an issue in the 2010 general election. Cameron was sensitive, however, to how far the creation of the coalition disappointed Conservative Eurosceptics. The Lisbon treaty's final ratification by all 27 member states came six months before the British general election, scuppering his own firm pledge to hold a referendum on it. President Václav Klaus of the Czech Republic ignored the pleas of British Eurosceptics to delay his signature on the treaty until after the UK election. While David Cameron had made a well-publicised personal appeal to Klaus, the Czech president's firm rejection of his entreaties must have been a genuine relief. Conservatives rested on William Hague's enigmatic promise that if Lisbon was ratified before the Conservatives came to office, the new government "would not let matters rest there". To this end, the 2010 Conservative manifesto had pledged to "repatriate" limited powers from Brussels, but this was abandoned in the coalition agreement. Instead the coalition merely committed to examine the "balance of competences" between Britain and the EU. Yet Eurosceptics must have known that, even before the election, allies of David Cameron and William Hague had been briefing that the commitment to repatriation of powers would not be an early priority for them for fear of setting off an immediate confrontation with EU partners. For the Conservative leadership, the coalition with the Liberal Democrats was a convenient excuse for inaction.
The coalition's major concession to Eurosceptic opinion was the European Union Act 2011, introducing a so-called 'referendum lock' on any future transfers of power to Brussels. This measure passed through parliament with little resistance, except from pro-Europeans in the House of Lords. The Act reflected the prevailing received wisdom, shared by the leadership of all three main parties, that the Lisbon ratification should draw a firm line under any further EU treaty change. Such institutional navel-gazing, it was confidently asserted, would be unnecessary for a generation: Brussels already had more than enough powers and certainly did not need more.
The explosion of the eurozone crisis overturned these complacent assumptions. It faced the Conservative leadership with a tough choice. Many Conservatives welcomed the prospect of a breakup of the hated euro: they leapt with alacrity at Merkel's warning that "if the euro fails, Europe fails". There arose a united chorus of voices gleeful with schadenfreude, insisting that their principled objections to the euro had been proved right. Former Conservative chancellors Nigel Lawson and Norman Lamont powerfully reinforced these arguments. However to his credit, George Osborne, the current chancellor, mounted a brave response that it was in the interests of the British economy and banking system for eurozone cataclysm to be avoided.
Osborne sought to sugar this pill for his Eurosceptic party with a clever argument that became the driving idea behind Cameron's original concept of renegotiation. In the chancellor's view, the "remorseless logic" of the further eurozone integration necessary to make the single currency viable for the long term would require the negotiation of a major new European treaty. This would establish a more fiscally federal and democratically accountable eurozone. In his view, Britain would never be part of this more integrated currency area. However, as part of this process of inevitable treaty revision, Britain as a euro-outsider would then be able to negotiate a looser relationship within the EU. At the same time, Britain would insist on robust protections against unfair discrimination by the 'euro-ins' to the disadvantage of the 'euro-outs'.
The chancellor's decision to put so much stress on the "remorseless logic" of eurozone integration also served a wider political purpose. He was setting up a binary choice about the future of the euro: on the one hand, the high degree of economic and political integration within the eurozone that was an assumed inevitability made membership impossible for any British government; on the other, it was perfectly possible for the UK to remain in a looser EU outside a federalised inner core. A two-tier Europe was unavoidably emerging that would require a thorough institutional rethink for all EU members. Through this inevitable evolution, Britain could negotiate a new relationship and a 'new settlement'.
Osborne's logic was, however, a revolutionary proposition in terms of 40 years of British European policy: for the first time, the UK was arguing for the establishment of a two-tier Europe in which Britain would exclude itself voluntarily from the inner core and be content to be consigned to a looser outer ring, simply sharing the single market with eurozone partners. Among Eurosceptic Conservative MPs, the prospect on offer was of freedom from being locked into a remorseless escalator to a superstate; yet among pro-Europeans outside Conservative ranks, it felt more like permanent relegation to Europe's second division.
Of course, the eurozone crisis had some short-term political upsides. It offered the government convenient cover for Britain's continuing economic difficulties and an explanation for their failure to meet their ambitious fiscal targets. It also enabled the coalition to support from the sidelines the ongoing rescue of the euro, though this was done in a way calculated to exasperate EU partners. Fierce public criticism of the eurozone's slowness in taking decisive action was combined with point-blank refusal to offer or underwrite a cent of financial support for the various rescue packages (except for a bilateral loan to Ireland). The UK gave its approval to the small treaty change necessary to set up the European stability mechanism. Yet Conservative backbenchers criticised the government's failure to use the leverage offered in order to secure progress on the repatriation of powers. The increasingly heated politics of the Conservative party culminated in a near-farcical UK 'veto' of the fiscal treaty in December 2011, seen as essential by Merkel to secure German public support for the euro rescue: the farce was that the treaty went ahead as an intergovernmental treaty outside the formal EU structure with only the UK and Hungary refusing to sign up. Use of the 'veto' was seen to have practical limits.
As the eurozone crisis dragged on, it added to the government's medium-term political problems on Europe. First, it brought back the European question with its full divisive force. In part this was because the eurozone's clumsy handling of the crisis undoubtedly undermined public support for EU membership. Earlier generations had in part been persuaded that Britain had no alternative but to 'join Europe' because on economic growth the continental record had, until the 1990s, far outshone its own. Now the public saw on their television screens constant witness to a failing and divided Europe. The never-ending drama played out in the media of the euro crisis in 2011 and 2012 – the absence of any single clear step towards its resolution, the endless succession of summits in Brussels which never appeared to do enough, banking collapse in Ireland, the political crisis in Italy, civil disturbance in Greece and Spain – conveyed an image of chaos, confusion and deep woe. The whole European project seemed on the point of collapse. Understandably, the British public were horrified and it was no surprise that support for EU withdrawal rose in opinion polls. (The significance though of this shift should not be exaggerated: there was a similar period during the 'Eurosclerosis' of the early 1980s when a clear UK majority in the opinion polls favoured withdrawal.)
Excerpted from The Risk of Brexit by Roger Liddle. Copyright © 2016 Policy Network. Excerpted by permission of Rowman & Littlefield Publishing Group, Inc..
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Table of Contents
About the Author / Preface / How We Got Here / The Remorseless Logic of Conservative Division on Europe / The Shifting Renegotiation Agenda / Gearing Up for the Renegotiation / The Impact of the 2015 General Election on the European Question / Will Britain’s EU Partners Deliver What Cameron Needs? / What Does Cameron Actually Want? / The Renegotiation Agenda / No Longer Part of Ever Closer Union? / Fair Treatment Between the Euro-ins and Euro-outs / A New Deal On Migration / A More Competitive EU / Prospects for the Referendum and Thereafter / The Conservative Politics of the Referendum / Corbyn and Europe / Can Cameron Win a Vote to Remain? / Will the Referendum Resolve Britain’s Europe Dilemma?