Matthew Elliott: Barroso's EU plans will enable Britain to change our relationship with Brussels

Matthew Elliott is Chief Executive of Business for Britain – over 750 business leaders calling for a new deal from the European Union. Follow Matthew on Twitter.

Today the eleventh President of the European Commission, José Manuel Barroso, will deliver his fourth and final State of the Union address to Brussels before he steps down after the European elections next year.

We know already that he will say that the EU needs further economic and political integration. It is likely that he will start to expand on his vision of banking and fiscal union, welding the countries of the Eurozone ever closer together into a new highly-integrated economic bloc.

This should come as no surprise to anyone. The President of the European Council, Herman van Rompuy, set out proposals for deepening integration in his ‘Towards a genuine Economic and Monetary Union’ paper in 2012, and President Barroso floated the idea in his State of the Union address last year.

In fact, anyone who witnessed the debate about the single currency at the turn of this century would have seen commentators warning that the euro would not survive without a strong coordination of fiscal policy underpinned by a single pan-European banking system.

Then, as often happens now, these sage people were shouted down - decried as xenophobes clinging to outdated notions of sovereignty. As has happened throughout the chequered history of the European Union, nations were told not to worry about the next steps, with EU officials saying that joining the euro didn’t necessarily mean further political and economic union.

It has taken one financial crisis for that promise to be broken. Now the EU institutions are laying the groundwork for further control over the tax and spend policies of Eurozone countries – arguably stripping governments of their most fundamental function.

Fortunately, Britain is inching towards economic growth safely outside the single currency. There is a debate to be had over whether the Eurozone should be making moves towards closer union or breaking up altogether, but these developments do bring with them the high likelihood of treaty change and with it the opportunity to reshape our relationship with Brussels.

We should not be afraid to start imagining what this new deal will look like. When David Cameron first mooted the prospect of negotiating a new deal with the EU, some business people and retired Eurocrats warned the Prime Minister against making "premature" and "opportunistic" demands. Others said that treaty change was impossible and that in going alone Britain was "threatening" the economic recovery.

But it’s clear that we are no longer going alone. The EU is beginning its own period of change and we can use this opening to get a better deal from Brussels. The very same fair-weather friends who warned David Cameron of dire consequences in January have now conceded that the EU does need to reform, and even the German Chancellor has spoken positively about the repatriation of powers from Brussels to national governments, with talks ready to begin after the elections.

On Monday night, Business Secretary Vince Cable said that the planned return of powers had “little hope”, seemingly ignoring these developments. It now seems likely that the whole process of negotiating a better deal for Britain will begin far sooner than many had originally thought and – thankfully – it won’t have to take place on a unilateral basis.  

Business for Britain will be holding a debate on this topic at Conservative Party Conference on Tuesday 1^st October, 12-1pm in the ConHome tent. Panellists to include Matthew Elliott, Dr Liam Fox MP and Ruth Lea, with the event chaired by ConHome Editor Paul Goodman.