How the Tories can still win in Europe

A week after David Cameron ruled out a referendum on the Lisbon Treaty, hardly a squeak of protest has been heard from Eurosceptics in his party. It’s not because they have accepted defeat, says Fraser Nelson, but because they are deadly serious about victory

Anyone who believed last week’s talk of the death of Tory Euroscepticism should have booked a table at Bellamy’s restaurant in Mayfair on Monday. There, the No Turning Back group of Tories had gathered to discuss tactics, and how to continue the fight after the ratification of the Lisbon Treaty. They had also come to discuss what to make of David Cameron’s new European agenda. Was it sincere, or a decoy? Should they press for a referendum? And at what stage should they start rocking the boat of the Tory leadership?

The dinner table was divided. Half suspected that Mr Cameron’s new European policy had such a long deadline — negotiate opt-outs in five years’ time — that it intended to bury the agenda altogether. But the other half of the table scented victory. Mr Cameron had given considerable concessions, they said, and had promised a referendum if the EU took another step towards federalism — as well it might. Surely they could look forward to the most robustly Eurosceptic manifesto in the Conservatives’ history? Surely this was a night for champagne?

By the end of dinner, it had been agreed that it was time to rethink Euroscepticism and switch tactics. The methods of the last few years — pressing for a referendum on the Lisbon Treaty — had failed. To have a referendum anyway would be like throwing pebbles against the advancing battleship of European federalism. The real aim must be to repel the vessel — or sink it outright. And one needs torpedoes, rather than stones, to do that. So the Eurosceptics’ silence is a declaration of intent, not despair. To adopt William Hague’s now famous phrase, they will not let matters rest.

Nor need they. As Mr Cameron knows, there are far more tools at the disposal of a Conservative government than just those which he described last week. His talk of renegotiation to bring back powers from Brussels over employment law and criminal justice, for example, would be great if all 27 member states agreed to it. But given that everyone knows this is highly unlikely, other tactics can be used. There is much the Eurosceptics believe can be done without recourse to the largely ineffective diplomatic route. A practical Euroscepticism can be deployed not as a strategy for summits, but as a day-to-day policy for dealing with Brussels. It is time, in other words, to go rogue.

The Tories are looking to an unlikely role model here: Jacques Chirac. As President of France he took a robustly chauvinistic approach to the EU. In the 1990s, for example, he refused to import British beef during the BSE scare even though this violated EU law. He dared Britain to take him to the European Court of Justice — which, after three years, told the French to lift the ban. A year after that, they reluctantly agreed. The exercise was petulant, but it bought time. It was an example of the French using flexibility — and sheer bloody-mindedness — to the full.

Britain could soon find itself with a similar opportunity. The EU plans to regulate the hedge fund and equity industry and many — including Boris Johnson, the Mayor of London — regard the move as a raid on the City of London. Some Conservatives estimate that the fee for refusing to implement the hedge fund directive would be about £200 million — which would be a price worth paying to avoid the flight of the industry (and its tax revenues) to Singapore and New York. George Osborne has as yet no intention of making such an act of defiance, but he may find himself under internal pressure to do so. And, perhaps, under explicit pressure from the Mayor himself.

Then there is the option of a ‘go-slow’ in enforcing EU regulations — an option being actively considered by William Hague, the shadow foreign secretary. He believes the British civil service ought to stop giving such weight to what comes from Brussels. Take pigs, for example. Mick Slogan, who runs a pork industry association named BPEX, puts it thus: ‘The directive from Brussels was three or four pages, which was bad enough. But the notes from Defra explaining it ran to 20 pages. And the guidance they gave the industry ran to 50 pages. In France, they don’t bother interpreting — they just let the directive stand.’ This is the bureaucratic multiplier in operation: and one the Conservatives hope to dismantle. Step one in Practical Euroscepticism is to stop making the situation worse.

The largest and easiest Tory victory could be one for English justice — and this means breaking free not of the European Union but of the European Court of Human Rights in Strasbourg. Mr Cameron has mentioned justice in the wish list of powers he would like to negotiate away from the European Union — but very few, even among his advisers, believe there is much chance of an opt-out. He need not wait. Independence can be declared in a British Bill of Rights, mainly intended to supplant the Human Rights Act, which since 1998 has played havoc with all manner of English laws.

Worded properly, the Bill of Rights could end Strasbourg’s authority in England. Anonymous witnesses could again be used in murder trials and prisoners could not demand the right to pornography. But this is another area where the Eurosceptics may have to wage war, for it is not at all clear that the Tory architects of the Bill of Rights (mainly lawyers) wish such a clean break. Dominic Grieve, the shadow justice secretary, is an admirer of the European Convention of Human Rights (ECHR) and has twice threatened to resign if its writ is removed entirely.

On defence, Liam Fox — one of the most robustly Eurosceptic members of the shadow Cabinet — plans to pull out of the European Defence Agency. Ostensibly set up to make savings on defence research and development, the EDA is regarded by the Conservatives as the precursor to a European defence force of which they want no part. As Mr Fox (a No Turning Back member, but absent from the dinner) puts it: ‘We don’t like the destination, so we’re not getting on the bus. We can never allow defence procurement to be a supra-national issue.’

And if Brussels were to come down hard on Britain over its general recalcitrance on EU directives, then the Conservatives can threaten, as Thatcher implicitly did, to stop paying them the £20-million-a-day cost of membership. In the highly likely event that Brussels grows hungry for more powers, Mr Cameron has promised that Britain would have a referendum whose only logical destination would be associate membership: the free trade, without the laws, presidents, foreign ministers and incandescent lightbulb bans. And this is, of course, what Britain voted for last time it was asked in 1975.

Mr Cameron needs no reminder of the power of Euroscepticism within the party, as he owes his parliamentary career and his leadership of the party to it. During the leadership, his pledge to leave the EPP gained him crucial support. He was selected for Witney over Andrew Mitchell, who was still resented by party activists for his role as a whip in John Major’s government over the Maastricht votes. Letters were stuffed in doors denouncing the now shadow international development secretary as an unpatriotic sell-out. And this, of course, was almost a decade after the event. Eurosceptics have long memories and believe revenge is a dish best served after about eight years.

This will be particularly relevant when considering Mr Cameron’s plan to cut the number of MPs by 10 per cent. It is not about saving money, as he pretends, but a device to redefine parliamentary boundaries, which the Tories reckon would be worth about 20 seats. But this would als o mean every MP being reselected: a rash of reselections that would hand masses of power to the grassroot members who may well work to ensure a triumph of the Eurosceptics.

This is why Mr Cameron will regard Europe as a test of party discipline. He has seen its destructive power. So have the others. One senior Eurosceptic in the shadow Cabinet, when asked about the refusal to hold a referendum on the Lisbon Treaty, responded by saying, ‘We want to win the election.’ And so do the men gathered in the No Turning Back group: without power they cannot fight back against Europe, and in order to achieve power the Conservatives need to present a united face to the electorate.

This is why everyone — Mr Cameron, Kenneth Clarke, Daniel Hannan — is behaving so well. Even when resigning in protest after Mr Cameron’s refusal to hold a referendum on the Lisbon Treaty, Mr Hannan did his best to be polite.

Team Cameron know that the uneasy truce will last not just to polling day, but perhaps for six months, and that it will be 2011 before the Eurosceptics start to grow restive. The deadlines being discussed internally have 2013 down as the date where Mr Cameron would have to deliver solid progress wresting back power from Europe — or face the consequences. The European parliament elections the year afterwards will be a form of judgment day.

Mr Cameron knows it is a high-risk strategy. His advisers long ago accepted that the days of party loyalty are over. Activists have become more aggressive, less reverential, forming a stronger bond with the constituency groups and a weaker one with Tory HQ. Crucially, Mr Cameron knows just how deep this issue runs for many of his present and future MPs. This is not about Europe, but about big government and the duty to resist it. Fighting for Britain, fighting for public opinion and fighting against the unelected officials of the European Union is what a lot of them genuinely believe they have been sent to parliament to do.

These trends will only harden over time. The new breed of MPs is resolutely Eurosceptic: it is Kenneth Clarke’s generation of soft paternalists that is dying out — as he knows. If the trend in politics is towards a transfer of power from government to communities, then the EU project is 50 years out of date. And if politicians lose heart, the public do not. Opinion polls routinely show that Britain is the most defiantly sceptical member of the EU. This gives the Eurosceptics heart: they believe, and with reason, that they speak for the mainstream.

On Tuesday, Mr Clarke rightly described the Tory position on Europe as offering ‘largely reassurance’. And it has largely worked. Mr Cameron has reasonable Eurosceptic credentials — and, as prime minister, he would have many levers to pull if he chose. For the time being, those lethal Eurosceptics who gather in Bellamy’s on a Monday night are going to trust Mr Cameron to deliver the goods, whatever form they may come in. It is a very British stand-off. Everyone has agreed to fight, but another day, in another way. And no one is in any doubt just how high the stakes still are.