Becoming prime minister may not have curbed David Cameron’s natural instincts to revert to the economic policies of his political heroine Margaret Thatcher, but it certainly appears to have caused him to shift tack on EU policy. Lest we forget, Cameron won the Tory leadership contest partly by getting the backing of the Conservative’s most eurosceptic politicians, including the flamboyant Dan Hannan, the darling of the Tory hard right.
It doesn’t seem that long ago that Cameron was promising a referendum on the Lisbon Treaty, regardless of whether it had been ratified, and then solemnly promising that a ‘referendum lock’ bill would require a plebiscite before any future treaty change. He also promised, though thankfully the Liberal Democrats refused to allow it, to take Britain out of the social chapter. Yet, having been in office just over six months, Cameron has now agreed an EU budget that will increase by 2.9 per cent in 2011 and agreed to a new treaty change which – wait for it – won’t require a referendum. But he is still trying to have his cake and eat it by attempting to appease Tory eurosceptics.
At last week’s EU summit, it was agreed that a new financial stability mechanism will replace the temporary one that was cobbled together to help Greece and Ireland during the debt crises that have ravaged their countries this year, and will come into force in 2013. Although there are few details on where the cash will come from, how big the fund will be, and how it will be used, one thing is for sure: this is a European Monetary Fund in all but name. It will be set up by amending Articles 122 and 136 of the EU treaties. David Cameron, insisted that it ‘doesn’t affect the UK and doesn’t transfer any more powers to the European Union’.
Except that that isn’t quite true. True, Britain is outside the Eurozone, but these treaty changes will be accompanied by tighter EU surveillance of national budgets. That, in my book, is a transfer of power. At the very least it will mean that the European Commission and possibly the European parliament will get closer scrutiny powers over tax and spending in the UK.
However, Cameron’s great campaign at the summit was to try and cap the EU budget at inflation from 2014-2020, having already lost his battle to freeze next year’s budget, and having his proposal to reduce the proportion of European gross national income that can be allocated to the budget from 1.08 per cent to 0.85 per cent flatly rejected by German Chancellor Angela Merkel.
But it turned out to be a damp squib. Just six of the 27 EU countries joined him: France, Germany and four others. So, the result of this month’s summit of EU leaders was an agreement to treaty change, agreement to a budget increase which Labour MPs and MEPs opposed, and a limp attempt to give a sop to his eurosceptics by trying, and failing, to win support for reducing the EU budget. Politically, a budget cut is also a daft fight to pick for the Tories in Brussels. It would involve two years of repeated battles with the European Commission and the European parliament. Equally importantly, most of the members of the ECR group which the Tories belong to in the European parliament are from Poland, the Czech Republic and other eastern European countries. In other words, the poorer countries which stand to lose the most from an EU budget cut.
Yvette Cooper rightly said that Cameron was ‘trying to appear tough for his Eurosceptic backbenchers’. But the truth is that his attempts to be all things to all people: pragmatic and statesmanlike in Brussels, but a rabble rouser in Westminster won’t work forever. There have already been several significant Tory rebellions on the EU budget – nearly 40 Tory MPs backed a motion to cut the EU budget in October. It seems certain that the treaty changes agreed at the summit will require an act of parliament – that is what the referendum lock bill promises. Given that most Tory MPs do not want to see greater powers for the EU or a higher EU budget, we can expect another sizeable rebellion when that hits the Commons.
Ultimately, Cameron will have to choose between giving Britain a powerful voice in Europe and risk losing backbench support, or being the rabid eurosceptic in the corner who is quietly ignored while the future of the EU is dictated by the Germans and the French. At the moment he is achieving neither. And while Cameron losing his support in the Tory party is good for Labour, his impotence in Europe is a crying shame for Britain at a time when an embattled EU needs us more than ever.