by George Freeman
Last Friday’s historic Commons vote in which the Conservative Party in Parliament voted in favour of an EU Referendum Bill edges us closer to putting into law the Prime Minister’s groundbreaking commitment to the strategy of "Renegotiation + Referendum". The signal to Europe is clear: the UK is getting serious about using the threat of ‘Brexit’ to negotiate an alternative and radically reformed Europe, which we will then let the British people decide on in an In-Out Referendum.
The emptiness of the Labour benches told their own story: the Conservatives are the only party committed to engaging seriously in leading the reform of Europe, and letting the people decide. Ed Milliband’s weakness on this is palpable. Whilst David Cameron leads, Red Ed is busy shoring up the support of his trade union backers.
Domestically, Friday’s vote tees up another key reason to vote Conservative at the next Election: give us the mandate to see through the renegotiation and deliver that Referendum. But for that to be credible, and to avoid the predictable charge from UKIP next spring that we have simply 'kicked the Referendum into the long grass', we need to explain why we need the next four years to negotiate the New Europe we want to see and have a realistic and substantial alternative to present to the British public in 2017.
To do that, and to shoot UKIP’s fox, we need to begin, now, actively building a pan-European alliance for reform and the first stages of renegotiation. We stand very little chance of negotiating if it us against the rest. We need an alliance of nations signed up to a common platform of reform. If the Coalition Agreement prevents the Prime Minister and Foreign Secretary from actively leading renegotiation today, why don't we appoint a senior Conservative Prime Ministerial Envoy, with the respect of business and the City, to reach out to the Chancellories of Europe and convene the London Convention on Reform so we can show the British people it is us who are serious about renegotiation?
Globalisation and the perfect storm of banking, debt and Eurozone crises are fundamentally changing the dynamics of the EU. We are at a turning point. The European project’s seemingly unstoppable momentum of ever-closer political and economic union towards a single currency and ultimately a political state – which has fuelled the disillusionment of a British electorate which voted only for a Common Market – has to change.
The scale of the crisis facing the UK as an ageing Western democracy – a structural crisis in the public finances driven by a demographic time bomb, rising healthcare and state pension costs, and a top heavy and uncompetitive public sector – applies equally across most of Western Europe.
The solution – a more competitive and entrepreneurial economy, and a rebalance of trade with the fastest growing ‘BRIC+11’ – applies to Europe every bit as to us. To do it we need a European Commission much less inward-looking in pursuit of ever deeper integration and much more outward-looking in pursuit of global trade deals.
This is the fundamental reality which the Prime Minister’s ground-breaking Bloomberg speech recognised and rightly insisted creates a huge opportunity for Europe, and Britain. We cannot afford to be sucked unwillingly into an ever less competitive political union. We are committed to the reform process and to finding a model which properly respects and accommodates the needs both of the Eurozone nations to federate, and the needs of those of us outside it – but within Europe – to trade within the EU without having to give up our sovereignty.
This is a historic moment and opportunity which the Prime Minister has rightly seized with his speech which has electrified the Chancellories of Europe. It is an opportunity we need to grasp by showing – now – that we are pro-actively and positively leading the European reform debate and building the alliances around a shared shopping list of reforms which a bloc of nations could agree on and negotiate. Without progress on that, we risk allowing our opponents to mis-represent the Bloomberg speech as a tactical ‘kick into the long grass’ to buy some time, and allow UKIP to make hay at next spring’s Euro elections and ratchet up the pressure for an immediate In-Out Referendum, before we have explored every avenue for renegotiation.
The risks of a rushed referendum, or a rush for the exit, before we have had time to explore and set out a basis for the New Deal in which we are 'in Europe but not run by it' (ie: inside a trading union but outside a political union), is that we undermine business confidence at this crucial time in the recovery cycle, and risk an electorate deciding more in fear than optimism that we are better off with the devil we know.
The crisis in the Eurozone, and the accelerating recovery of the UK economy, creates a historic opportunity. Never has there been such a good case for fundamental reform. This is make or break for the Euro, with two potential outcomes. A break-up of the Eurozone under the intolerable political pressure created by the transfer of sovereignty and banking and currency risk from the weaker economies to the stronger. Or ever-closer union of the Eurozone nations as they consolidate the political sovereignty necessary to shore up the currency. It looks increasingly like the latter.
This creates a new dynamic, and a significant step towards what has seemed increasingly likely since the UK rightly opted out of the Euro and the Social Chapter: a two-tier Europe with a core group of nations pursuing the ever-closer political union inevitable to support a single currency, and an outer ring of nations which, whether because of their economic conditions or political preference, want to be inside an EU Free Trade Area, but not part of the Euro currency.
The emergence of a two-tier Europe could be an enormous opportunity for the UK: to position ourselves as the natural leaders of the non-Eurozone ‘outer tier’ of nations, in an EU Free Trade Area, leading the reform of Europe into a more competitive economic region better equipped to succeed in the Global Race.
So let’s seize the opportunity of the Prime Minister’s speech and show that we are committed to leading the reform agenda; why we need the years between now and 2017 to build the alliance for reform; start to define the Europe we could be happy in; secure the mandate at the Election, and then try and negotiate it. Of course the reality of the ‘Acquis communitaire’ process by which the EU has constructed a political union through consequential treaties means we have no choice but to fundamentally renegotiate the basis of our EU membership, and Lord Lawson may be right that we will fail. But we should try. So that when we put the In or Out question to the people they will be clear what the options are.
Under William Haque the FCO has already embarked on the Review of Competencies as the basis for the UK renegotiation. Just as important is the work of building alliances of reformers across Europe to demonstrate we have a real opportunity to secure a new deal. So let’s follow up the Bloomberg speech with a diplomatic initiative to build a new alliance for reform.
We need a London Convention for European Reform this autumn – a cross between Davos and the Hay Festival – in which pro-reform politicians, constitutional lawyers, City financiers and business leaders, from across the spectrum in Europe, inside and outside the Eurozone, start the process of defining the Europe we all want to see, and the alliance to deliver it. With Andrea Leadsom and colleagues in the Fresh Start group, I am working on a Fresh Start Conference this autumn to do just this.
But we shouldn’t rely just on backbench campaign groups. Party leaders across Europe need to see the UK set a strong lead at Governmental and Party level. A senior Conservative Prime Ministerial Envoy to prepare the ground would send a strong signal and allow us to start to make real progress today. We need to be able to demonstrate to the British people, before the Referendum, in next year’s Euro elections and in 2015, that we have left no diplomatic stone unturned in our search for a new deal.
With optimism, conviction, a fast recovering economy and the Eurozone in crisis, we might be surprised what we can achieve.
Only by London taking the lead on what we want a reformed Europe to look like will we flush out support from other countries who want the same but won't say so. The referendum presents us with a huge political opportunity to cement our position as the only party who will give people a say. David Cameron has created a phenomenal political opportunity for our country and our Party. Let's seize it.