by Ben Patterson, former MEP and current chairman of the Conservative Party in Kent.
What on earth is going on inside the Conservative Party? Are the last years of the Major Government repeating themselves, with ‚ÄúEurope‚ÄĚ once again tearing the Party to pieces and driving it to electoral suicide?
Certainly there are still some ‚ąí once described by Hugo Young as ‚Äúa confederacy of zealots and lurchers‚ÄĚ ‚ąí for whom the Eurosceptic cause is more important than winning elections.¬† Most of those proclaiming Euroscepticism, however, clearly see the issue as an election winner. They believe that their views reflect public opinion; and the promise of an in-out referendum in 2017 clearly puts Labour and the Lib-Dems in an awkward spot.
But why, after a few years of calm when ‚Äúbanging on about Europe‚ÄĚ was strongly discouraged, has the old, destructive debate once more broken out?¬† The obvious trigger has been the financial crisis, and its effects within the Euro Area. There is, indeed, a close parallel with the events of late 1992 when Sterling was ejected from the Exchange Rate Mechanism. The ERM d√©bacle seared itself into the political soul of the Conservative Party; and the troubles of the Euro Area have revived all the distrust of the EU which ‚ÄúBlack (or for some White) Wednesday‚ÄĚ inspired.
The Prime Minister‚Äôs speech on 23 January this year outlined that developments in the Euro Area are likely to bring about major changes in EU ‚Äúgovernance‚ÄĚ, making it possible to revise the current division of competences between the EU and its Member. The best possible outcome of negotiations, from Mr Cameron‚Äôs perspective, would be one that will allow a Conservative Government to hold the referendum, recommending that Britain remains within the EU, and win. In practice this will almost certainly mean reaching some agreement with Britain‚Äôs EU partners, including the German Government after the Federal elections, on various economic measures ‚Äď allowing the Euro Area ‚Äúins‚ÄĚ to integrate more closely while ensuring that the ‚Äúouts‚ÄĚ still have full rights in the EU as a whole; ‚Äúcutting red tape‚ÄĚ on businesses, in particular SMEs (including, of course, the German ‚ÄúMittelstand‚ÄĚ); opening up the single market in services and energy; ¬†clear progress on US/EU free trade; further CFP and CAP reform; selective UK opts-in to various judicial measures. All of which are reforms already taking place through the normal legislative procedure, rendering Mr Cameron‚Äôs ‚Äúultimatum‚ÄĚ unnecessary, but the outcome of his strategy achievable. Mr Cameron‚Äôs intention is to present the above as clear steps not only towards greater flexibility, but towards greater competitiveness for all, hence explicitly arguing that it was he that reformed the EU.
But the game plan has been thrown off course by a number of developments. The first, and most obvious, has been the rise of UKIP. Analysis of voting patterns has shown that Europe has not been the only reason, or even the main reason, for voters to support UKIP. Yet finishing behind a party which openly advocates EU withdrawal in successive by-elections, and losing seats to it in many county councils, has come as a shock. The polls indicate that about half the UKIP vote has been at the expense of the Conservative Party; and it does not take much calculating to realise that, if the same thing happens at the general election in 2015, there will be a Labour (or possibly Lib-Lab) government. The paradox that UKIP voters will end up with the opposite of what they want is unlikely to make much difference.
One possible Conservative response to this danger is to scupper UKIP by adopting its policies: on immigration, and as far as possible on Europe. UKIP is seen as having responded to voters‚Äô real concerns, unlike the ‚Äúpolitical √©lite‚ÄĚ; and if UKIP‚Äôs policies prove impossible to carry out in practice, this can be blamed on the LibDem coalition partners.
There are two problems with this answer. The first, to repeat the much quoted this past few days Rudyard Kipling, is that ‚Äúonce you have paid him the Dane-geld, You never get rid of the Dane‚ÄĚ. The second is that moving ever-further onto UKIP ground risks reversing the successful detoxification of the Conservative brand carried out in the first years of the Cameron leadership. That leadership seems, so far, to have adopted a more sensible response: withdrawing earlier derogatory remarks about UKIP, but holding its nerve. There are, moreover, distinct signs that Conservative moderates, particularly those in marginal seats, are prepared to take a stand against their more turbulent colleagues; and that the Party in the constituencies , even the most Eurosceptic, see the dangers in rocking the boat.
The second development has been a further result of the financial and Euro Area crises. In an attempt to prevent similar crises arising in the future as a result of excessive leverage and risk taking, and excessive complexity in financial products, the EU has embarked on a programme to regulate financial markets. The most important financial centre in the EU, however, is London; and the proposals of the Commission have therefore been perceived by some as an attack on the City, a major UK interest. It is perhaps no coincidence that recent declarations by Conservative elder statesmen that the UK should leave the EU have included those by two ex-Chancellors of the Exchequer and (less directly) the Mayor of London. To these have recently been added statements by certain ministers that, if a referendum were held now, they would vote ‚Äúno‚ÄĚ.
Are these declarations helpful or damaging? The positive view ‚Äď and it is possible that this has been behind at least some of the declarations ‚ąí is that they strengthen the Government‚Äôs hand in the negotiations; and it can, indeed, be argued that emphasising the real possibility of a UK withdrawal will make other Member States more ready to reach an accommodation. The negative view, of course, is that it will have the opposite effect ‚ąí that they will come to believe that Britain is heading to the exit door anyway, so there is no need to accommodate its demands.
The promise to hold a referendum on membership after the next election can also be viewed in a positive or a negative light. On the positive side, if all goes according to plan, the UK‚Äôs membership of the EU will be settled at least for another generation, allowing the country to concentrate on more constructive matters. For the Party there is also the pressure it puts on Labour, which must either tag along with a referendum pledge of its own, or find itself accused of ‚Äúnot trusting the people‚ÄĚ. (Having a referendum before the next election, as some extremists are suggesting, would of course throw this advantage away).
But not holding a referendum until 2017 also has its drawbacks. It creates uncertainty at a time when economic circumstances require, above all, a return of confidence in, among other things, that Britain will remain part of the biggest common market of the world. There is also some public cynicism as to whether any referendum will actually happen, which the proposal for legislation in the present Parliament is designed to meet. This might have declaratory value; but can have none constitutionally. Those who have demanded that it be added to the Queen‚Äôs Speech appear to overlook the fact that no Parliament can bind its successor. We have no entrenched clauses.
Given this, there is also a second paradox, of which the Ňęber-Eurosceptic Conservative MPs also seem unaware. The historical record tells us that being seen as split ‚Äď of being more concerned with internal disputes than defeating the opposition ‚ąí is an electoral kiss of death. Labour learned this in the early 1980s, and the Conservative Party should have learnt it in the late 1990s. So by openly challenging the Government, they make election victory less likely; and therefore make it less likely that any referendum will actually take place!
 In This Blessed Plot: Britain and Europe from Churchill to Blair (Macmillan, 1998)