Sir Humphrey will already be fighting this with every fibre of his being
Realist: Former Europe Minister Denis MacShane
Denis MacShane, the Brussels-friendly former Europe Minister, grasped the implications immediately. ‘There is now little point in Britain staying in the EU,’ he observed glumly.
Given how he and other Euro-enthusiasts have framed their argument over the past 20 years, it’s hard to see how he could reach any other conclusion. Supporters of closer union have always advanced an irreducible belief: Britain, they argued, must always be present at the table when rules that affect us are negotiated. There is, though, a flip side to that argument: If we can’t be present at the table, we shouldn’t accept the rules.
No one in the British Government planned or expected the breakdown on Friday morning. The Prime Minister had been keen to reach a deal. So keen, indeed, that he had given up any notion of repatriating power. He had dropped the idea of opting out of regulations on financial services. The only fig-leaf he held out for was an assurance that the City of London wouldn’t be specifically disadvantaged by the new rules that the other leaders were asking him to agree.
Our Euro-fanatical Foreign Office mandarins were well satisfied. The PM had been reduced to making a demand that was simply a restatement of the status quo. Surely the other leaders would recognise a good deal when they saw one? Even Nick Clegg was happy. It looked like an optical trick, a cover for the surrender of massive new powers to the EU.
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Yet, incredibly, Nicolas Sarkozy and Angela Merkel still weren’t satisfied; and there could be only one reason why. They really do have it in for the City, which they think of as a parasitical growth which lures away their best and brightest graduates every year.
Had they not wanted to maim our financial services industry – which generates nearly 12 per cent of all our tax revenues and is one of the few sectors with the locomotive power to drag Britain back to growth – they’d happily have given David Cameron the assurances he sought.
Think through the implications for a moment. Our tactic of influencing from within has ended in a total and spectacular failure. Despite our repeated concessions – and despite our having chipped in £12.5 billion to the Irish, Greek and Portuguese bailouts to prop up a currency that we hadn’t joined – we were none the less in a minority of one. Being proved right had made us more resented than ever.
Putting Britain first: Prime Minister David Cameron made as many concessions as he could - and he was still spurned
What clearer proof could there be that making concessions so as to win influence in the EU doesn’t work? The concessions are pocketed but the demands become shriller.
Our Brussels officials will now be working furiously to reverse the decision, in substance if not in theory. They will argue that, having made our point, we should allow the eurozone states to use the institutions, mechanisms and procedures of the EU to advance their aims.
The other countries won’t want to start all over again, with a new legal basis, new structures, new staff. Sir Humphrey will want to give them what they ask so as to regain their good will and (more important, from his point of view) to bring Britain back into their counsels.
David Cameron offered everything he could and was still spurned. He acted with courage and patriotism in resisting the peer pressure that predominates on these occasions.
This, though, is to miss the magnitude of what has happened. David Cameron offered everything he could and was still spurned. He acted with courage and patriotism in resisting the peer pressure that predominates on these occasions. Sneakily to give way now would alienate all sides. If the other states want to use EU structures, they will have to pay Britain’s price; and that price should be the repatriation of substantial powers.
A completely new entity is taking shape, based around what Herman Van Rompuy calls ‘European economic government’, and José Manuel Barroso calls ‘fiscal federalism’. Let’s call it the Fiscal Union, or FU. For that, indeed, must be how it often seems to its constituent peoples.
You’re Irish and you don’t see why your taxes are going up to repay European bankers and bondholders? FU! You’re Italian and you’re wondering why Brussels has imposed a government on you that doesn’t contain a single elected politician? FU! You’re Greek and you’d prefer a devaluation to the present endless crisis? FU!
Not satisfied: France's President Nicolas Sarkozy wants to cripple the financial clout of the City
As the FU takes form, its members will want to start co-ordinating their political as well as their economic affairs. Instead of having two parallel systems in operation, they will want to shift competences from the EU to the FU. Simply by refusing to take part, the United Kingdom could find itself recovering its independence. The EU wouldn’t break up, but it would be drained of power, left as a kind of amplified free trade zone. Which is, of course, precisely what most of us wanted all along.
Such an outcome, though, will require a sustained effort of will. The United Kingdom will have to negotiate hard-headedly, facilitating a closer federation on its doorstep in return for getting powers back.
Two domestic forces stand in the way of such an outcome. First, those Liberal Democrats who, unlike Denis MacShane, won’t accept the logic of this reverse. Having assured us that we needed to sign up to everything or risk isolation, they seem remarkably reluctant to accept that isolation has happened anyway.
Hoary-headed: Former Liberal Democrat Party leader Lord Ashdown
This is because Europe, for them, isn’t really an economic issue, or even a political one, but a tribal one. It’s not so much that they like the Brussels system, it’s that they dislike the people who oppose it. Hence the constant complaints following the veto, from Lord Oakeshott, Lord Ashdown and the other hoary-headed Lib Dem grandees about ‘the influence of the Eurosceptics’. Having defined the question in their own minds as a culture war between sensible progressives and bigoted Blimps, they have become almost impervious to developments on the ground.
Still, what are they going to do about it? Opinion polls now show Nick Clegg slugging it out with UKIP for third place. If he wants to walk out and prompt a General Election, good luck to him.
The second and more serious obstacle in the way of a renegotiation is the civil service – and, in particular, its Brussels arm, UKREP. For these exquisitely educated officials, exclusion from the top table is personal, not theoretical. They will resist what they would regard as a downgrade with every fibre in their being.
Then again, their advice has lost much of its lustre. Their strategy has again and again proved detrimental to the national interest.
By contrast, the Prime Minister, having followed his instincts, finds himself in a stronger and more popular position than at any time since the Election.
I hope that David Cameron, like Denis MacShane, follows through the logic of what has happened. There is no future for Britain as a leader in the EU.
We can be a friend and sponsor to European integration, but our place is in the wider world, exploiting the growing markets of developing and Anglosphere nations, rediscovering the global vocation which our parents took for granted.
We are tied to peoples on every continent by custom and law, by affinity and affection, by blood and speech. Let us raise our eyes to those older and more distant horizons.
