Sir James prepares to take on the world

The highly Euro-sceptic Referendum Party should not be dismissed as the political whim of an ageing playboy, says John Rentoul
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The Independent Online
"Here's Jimmy!" proclaims next month's Esquire, over a glossy profile of Britain's richest parliamentary candidate. The Member of the European Parliament and former international financier launched himself into British politics yesterday with full-page advertisements in all the broadsheet papers declaring that the Referendum Party - of which he is the founder and leader - will field candidates, including himself, in the next general election.

Sir James Goldsmith thus becomes a prototype British version of theNineties- style businessman-turned-politician, bearing a striking similarity to Ross Perot, the independent US presidential candidate; Silvio Berlusconi, the former Italian prime minister; and Bernard Tapie, Goldsmith's French semi-compatriot.

The son of Frank Goldsmith, Tory MP for Stowmarket, 1910-18, James started making money while still at Eton, winning pounds 8,000 on horses. He made an estimated $2bn as an international deal maker, but always held strong opinions, and after he sold most of his companies in 1987 - just before the Wall Street crash - he began to develop his economic and political views. Paradoxically, the philosophy that emerged was a reaction against the globalisation of markets from which he had profited so hugely.

Two years ago he published a book entitled The Trap, arguing against free trade, and this year he published a sequel, The Response, a book- length reply to the many critics he had provoked. His arguments have been facilely dismissed as the lengthy monologues of a vanity publisher: in fact his challenge to the long-dormant orthodoxy of free trade has exposed some of the flabbiness of conventional wisdom. He argues, with tenacious persuasiveness and a battery of facts and statistics, that the opening up of world trade to 4 billion low-wage workers in China and East Asia threatens not just the economic prosperity of the West but its social cohesion, too. This last point contains an echo of the "communitarian" ideas that have influenced Tony Blair.

But Goldsmith's views have led him in a rather different direction. He funded the Euro-sceptic European Foundation, and at last year's Tory conference he joined Lord Tebbit and Bill Cash on the platform at the biggest and most heated Euro-sceptic fringe meeting. He sees the European Union as fatally attached to the principle of free trade and, having been animated by the debate over the Maastricht treaty, has thrown himself into working to change it.

He successfully stood for the European Parliament last year at the head of a list of 13 MEPs in France,and formed an alliance with a few Danish and Dutch MEPs to form the anti-federalist Groupe Europe des Nations, of which he is president. Now his pan-European political ambitions have turned to Britain and the effect on his new-found Euro-sceptic allies has been dramatic.

His intervention, potentially one of the grandest and best-funded spoiling operations in British politics, has provoked public fury from Conservative anti-Europeans and the rival Euro-sceptic UK Independence Party. Dr Alan Sked, the UKIP leader, dismissed it as "the politics of Sunset Boulevard practised by an ageing playboy plutocrat". But some Tory MPs privately welcome his attempt to put pressure on their less robust colleagues. Goldsmith's party will stand in all seats where the sitting Tory or Labour MP is "not committed to a fair referendum on the Maastricht Treaty".

For many - such as Kenneth Clarke, the Chancellor, who faces Sir Alan Walters, Margaret Thatcher's former economic adviser, as the Referendum candidate - the threat does not amount to much. He defends a majority of nearly 20,000. Similarly, despite the Referendum Party's insistence that it is not targeting the Tory party, most Labour MPs watch the show with amused indifference - it is not their voters who are likely to be tempted away.

Fringe candidates in the British electoral system tend not to gain significant numbers of votes, but Goldsmith claims he will match the main parties' election spending. The fact that he himself will be a candidate, possibly against Virginia Bottomley in Surrey South-West or against Jeremy Hanley in Richmond, south London (where he has just one of his many houses), will add to the drama.

Some Tory MPs in marginal seats are worried about Goldsmith and furious with Tories who support him. Gerald Howarth, the right-wing former MP for Cannock who is now the candidate for the safe Tory seat of Aldershot, is a particular target of their anger. Mr Howarth's public relations company, Taskforce, acts for Goldsmith. While Mr Howarth insists that he has "absolutely nothing to do" with the Referendum Party, his company's assistance for a man who is putting up candidates against his own party causes deep resentment. "I can see there are Conservatives who are distressed," he says, but goes on: "It behoves us all to ask ourselves whether the people should be denied a referendum."

Teresa Gorman, the former Euro-rebel Tory MP who recently introduced a private member's bill to hold a referendum on Europe, echoes his point. "I don't agree with it, but it is a strategy which could crystallise the resolution of my more wobbly colleagues," she says.

Other Tory Euro-sceptics have publicly rebuked Goldsmith because they think his tactics are counterproductive. They fear Referendum candidates will siphon off Tory votes and let in "federalist" Labour or Liberal Democrat MPs. John Redwood, who challenged for the Tory leadership on an anti- Brussels ticket in July, and Norman Lamont, his supporter-in-chief, tried to persuade Walters not to challenge Clarke. "It's a thoroughly regrettable idea," said Lamont. "Sir James and the likes of Sir Alan Walters ought to concentrate on defeating the Labour Party at the next election. The main threat of further integration in Europe comes from the Labour Party."

However, this is not just an argument about tactics. A party formed to pursue a single objective - a referendum - is a peculiar and un-British animal. But lying behind that objective is the question of Goldsmith's real views on Europe. Here the Euro-sceptic cause, of which he seems a potential leader, starts to fragment.

His hostility to global free trade means he is in favour of a European free market surrounded by a tariff wall - which runs directly counter to most sceptics' desire to see Britain as the "Hong Kong of Europe", competing with the world. Sked, his rival as leader of the UK Independence Party, pours scorn on Goldsmith's claim to be a Euro-sceptic. "Goldsmith wants to see a 'Fortress Europe', a strengthened Europe, with powers simply transferred from the Commission to the Council of Ministers," he says.

Goldsmith's political views are, in fact, entirely unclassifiable in British terms. His emphasis on the damage done to the Third World by Western culture partly reflects ecological themes long advocated by his older brother, Teddy Goldsmith. And his advocacy of protection for a high-wage European economy finds stronger echoes in today's Labour Party than with the Tories.

At present the heat seems to be going out of the European issue, making it most likely that Goldsmith's venture will be condemned to "interesting fringe party" status. But if the single European currency suddenly becomes more likely, or if new plans come up at next year's Inter-Governmental Conference, then Goldsmith's contacts and money could act as a catalyst for wider changes.

The world according to Goldsmith...

"Global free trade will shatter the way in which value-added is shared between capital and labour ... In mature societies, we have been able to develop a general agreement as to how it should be shared ... Overnight that agreement will be destroyed by the arrival of huge populations willing to undercut radically the salaries earned by our workforces. The social divisions that this will cause will be deeper than anything ever envisaged by Marx.

"We must start by rejecting the concept of global free trade and we must replace it by regional free trade ...

"Let us imagine that Europe returns to the original concept of the Treaty of Rome, which was the basis for the creation of the European Community. Economically, its purpose was to establish the largest free market in the world. Within Europe, there would be no tariffs, no barriers, and a free and competitive market. Trade with nations outside Europe would be subject to a single tariff ... In other words, priority would be given to European jobs and industry. About 20 years ago, quietly, the technocrats who run Europe started to alter this basic principle and move progressively towards international free trade. Ever since, unemployment in Europe has swollen. The Treaty of Maastricht enshrines this change and makes global free trade one of the fundamental principles on which the new Europe is to be built.

"If we were to return to the ideas of our founding fathers ... overnight all the enterprises which have moved their production to low-cost countries would have to return ... Factories would be built, Europeans would be employed, the economy would prosper and social stability would return."

Sir James Goldsmith, 'The Trap', 1993

Goldsmith's argument is an old story. It has been told for a hundred years and it has always proved wrong. It is contradicted empirically by the inescapable fact that the world has grown steadily richer over the period in which world trade has been liberalised

Professor John Kay, London Business School

It was because the US and continental European countries did not support free trade that the 1930s witnessed a global trading catastrophe Professor Tim Congdon

I can't view globalisation as entirely beneficial. It seems unarguable that it is damaging to human needs for enduring forms of attachment, and I quote Goldsmith approvingly on that point

John Gray, Fellow of Jesus College, Oxford

Over the years I have become an experienced observer of charisma; the best indicator is the way in which the public approaches the candidate ... People were coming up to Jimmy Goldsmith in just this way. It was like observing Margaret Thatcher at a Conservative Party conference, or Ronald Reagan in the Republican primaries of 1980 Lord Rees-Mogg

It's interesting to see how our politics is going slightly more American. Here is Sir James Goldsmith, millionaire, lives in Paris and Mexico, he's entitled to put his money into the political campaigns he has, he's put a lot of money into the Euro-sceptics, he's now set up this party and he's going to launch candidates all over the country [but] he's likely to help the Labour and Liberal parties

Kenneth Clarke, on the challenge to him in his Rushcliffe constituency.

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