David Cameron on Europe: The Implicit and Explicit Messages

1. It was a speech in two halves. The first half repeated the traditional Euroskeptic moans about the EU.

The second half explained that a single market needs rules, that British security was stronger by being in the EU, that Norway and the Swiss have to abide by EU rules and that a vote to leave would be a massive dangerous rupture.

2. Cameron’s speech is worth comparing to that of Sir John Major in March 2013, also delivered at Chatham House, in which the former Tory premier supported his successor.

He said, renegotiations should include a “full repeal of the Working Time Directive,” no more social legislation and changes in the Common Agricultural Policy.

Cameron has grouped all these demands. Indeed, he has left high and dry the demands for UK opt-outs from Social Europe from the Confederation of British Industry (CBI) and other business outfits like the British Chambers of Commerce and Institute of Directors.

3. Sir John did not mention the reference in the preamble to the EU Treaties to “ever closer union of peoples” (not states). This has now become totemic for Cameron.

When I was Europe Minister (2002-2005), the UK removed the reference to “ever closer union” (ECU) as part of the negotiations over the then draft Constitutional Treaty, which was voted down by the French and Dutch.

No-one noticed the change of language on ECU and no Tory MP thanked me at the time. The phrase, which is in the preamble and has no legal effect, has not been a cause of concern since 1957, until a year or two ago.

It will be easy to draft a declaration that in any future Constitutional Treaty, the UK can have a protocol added to the treaty saying ECU does not apply.

4. Equally, it will be open to a future government not to insist on the protocol being applied. The Prime Minister stresses that there is no possibility of a second referendum and that a Brexit decision is irreversible.

But that does not make sense. In the event of Brexit, Cameron will resign as prime minister. In any event, he cannot dictate to his successor or any future Parliament what its policy will be.

Pay discrimination

5. Cameron repeated his insistence that EU citizens working in low-paying jobs will have to wait for four years before being eligible for the top-up supplement in the pay slip that currently applies.

This is not really a welfare benefit, but a subsidy to allow small firms to hire labor at a lower cost to themselves. It is a kind of negative income tax taken from the U.S. Earned Income Tax Credit system and now costs the UK taxpayer £32 billion a year.

But to say to the Irish construction worker he will be paid less than his English co-worker is clearly discriminatory and against EU law. One way out of this, raised in a report in the Guardian, is to make British workers wait for four years before they obtain this pay supplement.

That would remove the discrimination aspect. Reporters from the BBC and C4 News asked Cameron about this. He refused to answer whether the Government was looking at denying British employees this pay supplement for four years. If the Government does do so, the problem of discrimination is solved.

6. It is rather presumptuous of Cameron to imply he is speaking for all non-eurozone EU member states. Each has a different relationship to the EZ. Denmark is de facto a eurozone member, as the Danish crown never changes in value against the euro.

The Danish Central Bank copies the ECB in all regards. Poland is part of the German economic zone. Sweden does not have a major global finance center to worry about. No one will force the UK or any country to join the euro, so Cameron can certainly obtain some language to that effect.

But he cannot expect to have British banks and other firms operating in the eurozone without respecting its rules and norms. If he does, it will require full-on Treaty change and that is not an option between now and 2017.

7. Cameron said the EU has to be more competitive. The reply from Europe may be: So does Britain. There are four EU member states above Britain in the latest world competitive rankings.

UK productivity and a growing balance of trade deficit are not examples to be followed. Britain has the worst inequality in advanced Europe and the drone of London lecturing the EU is irritating and produces few results.

UK’s interaction with EU

8. No-one objects to a greater say for national parliaments. British MPs could change their own practices and rules to allow much better involvement of supervising EU policy.

But Cameron has abolished the bi-annual EU debate in the Commons and taken the Conservative Party out of the center-right federation of EU parties into a small group of ultra-nationalist parties.

So the EU is less likely to be dictated to by a British prime minister who practices political party isolation while preaching more parliamentary oversight of Europe.

9. In the end, there is nothing in Cameron’s speech that cannot be managed or massaged into word forms that imply recasting how the UK interacts with the EU.

He has dropped all demands for a new Treaty and will be satisfied with a solemn and binding declaration lodged with the UN or the Vatican as proof of the EU commitment to heed British concerns.

10. His real problem is not with the EU but with his own party. Since 1997, when the Tories went into opposition and William Hague decided to make anti-Europeanism the leitmotif of Tory opposition politics, the Conservatives have invested massively in Euro-skepticism.

Cameron’s Tory leaders who came into politics in this era, at a time when their Goddess Margaret Thatcher turned pathologically anti-European, now have to hold their noses, swallow their anti-Europeanism and decide that Tony Blair was right and the UK being in the EU is in the national interest.

It is always a hard call for a political generation to admit it has been up a blind alley. Cameron has yet to fully accept this U-turn. The chances of Brexit happening remain high.