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Weekly Intelligence Letter: Europe

Last Updated: Tuesday, August 10th, 2010

Dear Subscriber,

Just one topic in this week’s Intelligence Letter; Europe.

There’ll be two Letters next week. A special Letter on the emergency budget and the usual Letter next Friday.

Paul Goodman has written about David Cameron’s consensual approach to the issue but also why it remains the party’s most divisive issue.

Cameron is breaking with his Party’s recent history on Europe

After his election as Conservative leader, Britain’s EU partners feared that David Cameron would follow in the footsteps of Margaret Thatcher – proclaiming, in the event of a Conservative Government, “no, no, no” to any integration drive.

After he took office as Prime Minister, they worried that he would follow in the footsteps of Gordon Brown – stoking pre-summit media rows before leaving for the event, and lecturing them about his brilliant economic management once he’d arrived.

Instead, Cameron was rapturously received at this week’s summit, enjoying that well-reported English breakfast. The new Government seems to be viewed as having opened not so much a new chapter as a new book in UK-EU relations.

This is doubtless true of most new British Governments – as it was of Tony Blair’s in 1997, when the Observer trumpeted “Goodbye Xenophobia” on its front page. But there’s reason to believe that Cameron is marking a break from his
Party’s recent history – even from some of his own recent manifesto proposals. And not just because of the Coalition.

The manifesto was cautiously Euro-sceptic, drawing on proposals first announced after Cameron declared that there’d be no referendum on the Lisbon Treaty. It said that a Conservative Government would “never” take Britain into the Euro, and promised a sovereignty bill, a referendum lock on any new transfers of power, and specific Acts of Parliament before “ratchet clauses” could be effected.

But the big test for the Party’s Euro-sceptics was repatriation. Would Cameron roll back the frontiers of the European state (as they see it) by getting powers returned to Britain? The manifesto promised to do so in relation to three specific areas: social and employment legislation, criminal justice policy and the Charter of Fundamental Rights.

The Coalition Agreement is significantly different in content and, no less importantly, tone. There is no reference to repatriation. Instead, the Government will merely “examine the balance of the EU’s existing competences, and “examine the case” for a sovereignty bill. The pledge not to join the Euro has been watered down to “in this Parliament”. The referendum lock and ratchet clause commitments remain.

A crucial point to grasp is that many of the Party’s Euro-sceptics had little confidence in the Party’s manifesto commitments being delivered. They were as ecstatic at Cameron’s decision to leave the European People’s Party in the European Parliament – part of his election platform as Conservative leader, but one some doubted he’d deliver on – as Angela Merkel was furious.

That was the high point of Cameron’s relationship with the Euro-sceptic wing of his Party. Many were deeply disappointed by his making clear last autumn that, in his view, a Lisbon referendum was no longer practical. Some view William Hague, the Foreign Secretary, as a faux Euro-sceptic -a man who’s travelled over the years from a marginalised voice, warning that Britain could become a “foreign land”, to a creature of the establishment.

They aren’t impressed by the two concessions won by Cameron at this week’s summit – that the UK won’t face sanctions if it breaks deficit rules, and that its budget won’t be seen in advance. They argue that these are minor gains – and that stitching up a deal abroad in order to proclaim victory at home is a traditional feature of British budget management.

Some want to see a full-frontal assault on any plan for the EU to exercise more political control over member states’ budgets. Others recommend a trade-off, whereby Cameron swaps approving any such proposal – as long as it doesn’t apply to non-Euro members, such as Britain – for gaining the return of powers from Brussels. Open Europe, one of the key Euro-sceptic think-tanks, is pushing this idea.

And all will unite to oppose any British contribution to bail-outs for EU states along the lines of that agreed for Greece, tax harmonisation measures which affect the UK, or banking and financial regulations that do so, such as the Alternative Investment Fund Manager’s Directive.

As in so many other policy areas, the Prime Minister can say to his Euro-sceptic backbenchers: “I see your point. And I agree wholeheartedly. But you see, I’m afraid that governing in coalition is a very difficult business. I’ve got to keep Nick Clegg and his Party on board. So I’m afraid that the repatriation of powers will have to wait.” (For repatriation, one can substitute whatever the issue is at stake.)

Cameron’s probably in a position to do this as long as the Government enjoys a favourable media wind, enjoys good poll ratings, and helps to shape events rather than simply respond to them. None the less, some of his backbenchers seem to feel that they can be less supportive of a Coalition Government than one that’s Conservative only.

Three backbenchers – Philip Davies, Douglas Carswell and, most significantly, Graham Brady, the newly-elected 1922 Committee Chairman made contributions at this week’s Prime Minister’s Questions that were probing at best and hostile at worst. Cameron’s not a Euro-enthusiast (and there are very few of these left in his Party). But he has been carefully modulating his Euro-scepticism for some time. Many on his backbenches don’t like it. Europe remains the Party’s single most divisive policy issue.

As always, please call me on 0771 726 1570 with any questions.

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