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Daniel Hamilton: Cameron’s referendum pledge has already strengthened the Conservatives’ hand in Europe

Hamilton Dan 2013Daniel Hamilton is a Partner at Bell Pottinger LLP.  He writes in a personal capacity. 

Over the past two decades, it has become de rigueur for British Prime Ministers to deliver speeches about the importance of European reform. Such speeches have been packed with buzzwords such as “flexibility”, “accountability” and “subsidiary”, yet utterly devoid of specific policies or proposals.

John Major's government made much of their defence of the British national interest in securing an opt-out from the Social Chapter of the Maastricht Treaty, yet ultimately threw Britain's weight behind the creation of the Euro and a pathway to the introduction of the very cross-border justice policies which the Home Secretary is now seeking Britain’s withdrawal from.

Many market-oriented Eurosceptics were delighted by Tony Blair’s speech to the European Parliament in 2005 when he called for an EU designed to “enhance our ability to compete, to help our people cope with globalisation, to let them embrace its opportunities and avoid its dangers”. Of course, as was so often with Tony Blair, his rhetoric did not match the reality of his deeds.

Finally, while he should be commended for resisting Mandelsonian demands for Britain to join the Euro, it is Gordon Brown’s signature that brought the wretched Lisbon Treaty into force – and with it the surrender of the British veto in more than forty policy areas.

Talk, however, is cheap.  Actions are what matter.

The crucial difference between the Prime Minister’s speech in January and the mealy-mouthed declarations of his predecessors was that it offered not simply a restatement of the vague aspiration of “renegotiation” but an explicit warning to the rest of Europe that Britain was no longer willing to accept European Union membership at any cost.  Finally, European leaders have been forced to listen to British leaders as opposed to ignoring them.

For the first time, a British Conservative Prime Minister outlined in realistic terms the possibility of Britain leaving the EU if renegotiation and reforms were not secured.  The Prime Minister has put EU governments on notice that Britain is no longer willing to accept a settlement with the European Union.

It’s now six months since the Prime Minister’s “big speech” and, while not all Eurosceptics will be satisfied with the progress that has been made, evidence already exists that it has made a demonstrable and beneficial difference to the UK’s bargaining position in Europe.  This is particularly noticeable in relation to budget negotiations.

Three weeks after the "big speech", an agreement was reached at the European Council to cut the European Union's operational budget for the period from 2014 to 2020 – the first time in EU history that a real terms budget cut had been secured.  While the French Government and European Parliament had sought increases to the budget, it was noticeable that Angela Merkel rowed in behind the British position, partly in an attempt to demonstrate concessions to the UK.

From next year, spending will be cut from €144.5 billion to €135.9 billion next year, a cut of 5.8 per cent.  For the full seven year period, savings will amount to roughly €60 billion.  This amounts to a saving for British taxpayers of roughly £500 a year. This is an unquestionably solid start, even with vast amounts of waste remaining - particularly in relation to the bloated Common Agricultural Policy.  Trimming this fat must be the Conservative Government’s top priority in the coming years.

When it comes to the negotiation of the EU-US Transatlantic Trade and Investment Partnership (read: Free Trade Agreement), French demands for talks on the proposal to be suspended in light of Edward Snowden’s PRISM allegations has met with deaf ears. The previous, knee-jerk Franco-German axis has, at least temporarily, given way to a more pragmatic, trade and deregulation-focused approach led by London.

The process of securing desperately-needed reforms to the European Union is only just beginning.  It still remains far from clear that it is in Britain’s interests to remain a member of the organisation. What is clear, however, is that David Cameron’s referendum pledge has put Britain on the front foot – and sent a warning to Europe that the UK is no longer willing to be steamrollered, side-lined and sneered at.


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