David Cameron has pledged that, if he wins the 2015 election, he will spend the next two years renegotiating the UK’s terms of membership, and then hold a referendum by the end of 2017. The Labour opposition has declined to match this pledge. The UK business community, particularly those involved in trade, is broadly against UK exit from the EU (‘Brexit‘). This reflects the economic consensus, as outlined in a recent CEP study, that exit would do serious harm to the economy (summary, paper). Yet, as I noted recently, sections in the Labour party warn that some of the opposition’s positions appear anti-business. I think events in recent days indicate that the real concern for UK business should be a Conservative victory.
When Cameron’s referendum pledge was originally made, I think many regarded it is essentially a short term political device to appease sections within the Conservative Party and UKIP voters. They assumed that UK renegotiation would be a largely symbolic affair, with any concessions the UK received being in practice minor but enough for Cameron to claim something far more substantial. Cameron would then be able to fully recommend staying within the EU, and the referendum would be won.
I think that is a reasonable statement of Cameron’s original intentions. The problem with this scenario is that it relies on a deceit: portraying minor changes in EU terms of membership as somehow fundamental. Traditionally a Conservative government can get away with this kind of thing because it has the majority of UK newspapers behind it, and a BBC which is influenced by that press. In this case, however, exactly the opposite will be true. Large sections of the UK press are virulent in their opposition to EU membership.
The Juncker affair illustrates the difficulty of the game being played. To attract the UKIP vote, Cameron has to promote the idea that EU membership on current terms is a major problem for the UK. He also seems to think that appearing as the only EU leader prepared to stand up for principles, and portraying his EU colleagues as cowards in the face of German dominance, plays well with the parts of the electorate he wants to win back. So having marched the country to the top of the hill before the election, he has just two years to march them back down again. That will be two years in which large sections of the UK press will be throwing everything they have at achieving the opposite, and where the news will be dominated by this renegotiation.
It is possible, of course, that he may actually achieve some major changes to the UK’s terms of membership. But again, the recent episode shows how difficult that will be. It appears as if Merkel changed her mind and supported Juncker as a result of domestic political pressure. Even if she is personally disposed to try and be helpful to Cameron, this experience suggests she will not risk that much to do so. In addition, the more Cameron plays the ‘bulldog battling the EU monolith’ line, the more he builds opposition abroad to ‘giving in to UK blackmail’. Calling potential allies cowards does not seem like a wise thing to do.
There must also be risks on the other side. It is said that almost half of all Conservative MPs will campaign to leave the EU. Conservative party activists are likely to be much more anti-EU than MPs, so considerable pressure will be placed on Cameron to tone down his eventual support for a yes vote to stay in the EU. It is conceivable that he might refrain from clearly backing continued EU membership, in frustration with his EU colleagues after two years of negotiation and to keep safe his own position in the party.
The current betting is that any referendum will result in a vote to stay in, but the odds are close. What is clear is that a Conservative victory that brings with it a referendum will lead to two years of heightened uncertainty, and what business leaders always say is that they really dislike uncertainty. The risk that the end result will be exit from the EU are considerable, and that would lead to a further period of uncertainty as the UK tries to negotiate favourable trade deals as an outsider. Is all this risk really worth it just to ensure a lower top rate of income tax?
The owners of capital were very much behind the EU and its rapid expansion eastwards with full and immediate, which is when public support for the EU started to wane. The Tories are up against big vested interests if they go for EU exit on which they depend. The EU since 2004 has arguably not been for the benefit for a large section of the non-London, particularly low skilled, population. These people are looking for a voice. That will be UKIP unless neo-liberals start listening, instead of patronising, their concerns.ReplyDelete
sorry that was expansion eastwards with full and immediate liberalisationDelete
I think this also makes Sexit more likely; the SNP can persuade Scottish voters that if they want to stay in the EU, this is the way to do it. At least on their own they can attempt to negotiate their way in. Tied to the UK, they can try to vote not to leave, but may be outvoted by Mr and Mrs angry of Tunbridge Wells.ReplyDelete
I think you've hit the nail on the head here, very insightful writing. I agree with almost every word. I'm not sure that helping business in general has been as important to the Tories as supporting the City ever since the days of Mrs Thatcher, even though - like the US GOP - that is their voter base; it's just they get more financial support from elsewhere. They are adept at misdirection though, persuading the smaller and less influential mass of traditional Tory voters that their policies, sponsored by their City backers, are really aimed at them.ReplyDelete
Cameron seems focussed more on maintaining his personal grip on power than on putting self-interest after the national Interest and sharing something bigger. Is he a narcissist, in the behavioural sense? Perhaps not since his machinations to hold onto his power are so transparent, if you look closely as you have done.
What confuses me about the Conservative Party though is why the Eurosceptics have not already left for UKIP, and why Cameron hasn't expelled them from the party yet, in the same way Labour cleaned up its act by expelling those from the Militant Tendency. Far from the European leaders being cowards, it seems to be Cameron who has no backbone; it takes a strong personality to negotiate effectively. He's all bluster and bluff up front, but I dread to think what happens behind closed doors.
His years of scapegoating of the EU for every failing of British mistakes is perhaps the worst political miscalculation since Neville Chamberlain's little piece of paper. What I fear most of all though is that the momentum for the anti-EU side has become so strong that whatever happens from now will have little effect. As you say, the UK press are virulently against EU membership.
"They are adept at misdirection though, persuading the smaller and less influential mass of traditional Tory voters that their policies, sponsored by their City backers, are really aimed at them."Delete
This Tory strategy cannot go on.
It has been quite noticeable recently how the Tory tabloids have become very anti-banker, as well anti-Europe.
I think the only hope for the Tories is economic recovery, but this has to translate into jobs and higher wages. If recovery only leads to low wage job creation or a resurgence in Polish immigration, the Tories are in trouble. But I do not think Labour should be too sanguine about the situation either.
This is a continuation of one of Thatcherism's disabling paradoxes, namely that more international capitalism can be balanced off with more UK nationalism.ReplyDelete
Hopefully it rips the Tory Party apart before the UK.
My experience with the IoD and CBI is that they are usually much better (as you would expect) at advocating for their larger members. (See taxation and VAT consultations, for example.) Yet very strangely, on the issue of the EU, they seem incapable of taking a stand. It's very odd and very worrying...ReplyDelete
The Tory establishment seem to have found their Thatcher knight in shining armour in the form of George Osborne.ReplyDelete
"Osborne has developed into the most substantial and impressive figure in the Coalition, a man of wit and courage who has sustained his crusade to control government debt amid shot and shell from Labour, the IMF, Europe and a rabble of socialist economists."
George Osborne will do what is role model did: serve the interests of the international owners of capital, attack the state, and appeal to nationalism to maintain support.