PM is not in Holland, and pro-Europeans may prevail

Inside Westminster: Eurosceptics are never satisfied. If Cameron announced a referendum tomorrow, they'd complain it wasn't yesterday

Andrew Grice
Friday 18 January 2013 23:00

At one point, David Cameron is said to have considered going to Bruges to make his great speech on Europe that never was – or, more accurately, isn't yet. The Belgian city was on his list of possible venues because Margaret Thatcher delivered her landmark speech there in 1988.

In Conservative folklore, the Thatcher speech was the moment when she put her party on the true path of Euroscepticism. But Whitehall whispers suggest that when Cameron aides read the whole speech, they realised the media's inevitable line-by-line comparison would show his to be more anti-European. Baroness Thatcher said: "Let me be quite clear. Britain does not dream of some cosy, isolated existence on the fringes of the European Community. Our destiny is in Europe, as part of the Community."

So Amsterdam was chosen for the speech Mr Cameron was due to make today, only for it to be postponed when he rightly decided to give his full attention to Algerian hostage crisis.

We know some of what he will say on Europe from the extracts released on Thursday night: the British people will "drift towards the exit" of the EU unless it reforms. We don't yet know his precise words on a Europe referendum but details are dribbling out in a messy way. He will promise a referendum on the "new settlement" for Britain he will seek to negotiate, but the vote would not take place until after the 2015 general election. He is likely to resist Eurosceptic demands for legislation now to lock him into a referendum if he is still PM after 2015.

Although several current Cabinet members would vote to leave the EU, Mr Cameron would not allow his ministers to campaign for exit if he were recommending a Yes to his new deal. Collective responsibility would still apply – unlike in the 1975 referendum in which Britain voted to stay in the EU, and the Labour PM Harold Wilson papered temporarily over Labour's deep divisions on Europe by allowing ministers to campaign Yes or No.

Today the parties have changed places. Labour is broadly united on Europe, while the intense debate is within the Tory factions. In the longest ever run-up to a big political speech, we also learnt a lot about Ed Miliband's thinking. He will resist Labour calls to match Mr Cameron's referendum pledge, abandoning the opportunism that saw the Opposition join forces with Tory Europhobes to defeat the Government on the EU budget last October. Mr Miliband has decided not to play politics on Europe again. He told his Shadow Cabinet on Tuesday Labour must focus on being "not only an effective opposition but also how we become an effective and responsible government".

The Tories believe Labour is vulnerable on Europe. At the general election, Mr Cameron intends to portray Labour as the party that would not "trust the people" to decide Britain's future, and might even take us into the euro.

Labour is taking out some insurance. It will rule out joining the euro in the next parliament, but not forever. It would keep the law passed in this parliament, under which any significant transfer of power to the EU would require a referendum. Labour will call for some powers to be returned from Brussels to member states, such as regional policy, to allow a more proactive industrial policy. National parliaments, clubbing together, could apply an "emergency brake" to proposed EU laws.

Mr Miliband believes there is nothing to have a referendum about. He might be proved right. Mr Cameron would negotiate his "new settlement" during talks on a new EU treaty to entrench reforms to the eurozone. However, the mood changed at the EU leaders' summit last month, which gave what one Brussels insider calls a "cold shower" to the idea of a new treaty. Mr Cameron had already locked himself into promising his party a referendum. Now, he can't draw back without provoking a Tory lynch mob. So his Europe strategy may well be based on a very flimsy foundation. Perhaps he is mainly trying to buy time. I doubt the Eurosceptics will give him much. They are never satisfied. If he announced a referendum tomorrow, they would complain that it wasn't announced today.

Mr Cameron's much-delayed speech has given pro-European businessmen and politicians unexpected media space to make their case. Their potential trump card was always going to be that EU exit would put job-creating foreign investment in Britain at risk.

Even the prospect of a referendum could have the same chilling effect. Vince Cable, the Liberal Democrat Business Secretary, has already found potential investors in Scotland hedging their bets ahead of the referendum on independence that will take place in the autumn of next year.

That could be writ large across the UK and Mr Cameron's referendum, if it happened, could easily be five years away. The debate sparked by an unmade speech gives pro-Europeans a ray of hope that a sceptical public might yet be won round to the benefits of EU membership. They should have three messages: "Jobs, jobs and jobs".

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