Unwillingly and unhappily, Cameron is being slowly hauled towards a referendum on EU exit

By Paul Goodman
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Leave aside the row about the EU budget and swoop on a sentence in a speech that William Hague will give in Berlin later today.  The Daily Telegraph reports that the Foreign Secretary will say: "If we cannot show that decision-making can flow back to national parliaments then the system will become democratically unsustainable".  Mr Hague is an intelligent man, and knows well that the movement of power in the EU doesn't work this way, and that none of the major member states - perhaps none at all - are pushing for the reverse to be the case in any respect.  The flow of decision-making has always been from the member states to the EU institutions: that is what ever-closer Union is all about.

There is only one way of making sense of the Foreign Secretary's remarks, in which he declares that "public disillusionment with the EU in Britain is the deepest it has ever been" - namely, as part of the preparation for a big proposal for the repatriation of powers in the Conservative manifesto, perhaps accompanied by a plan for a reversal of occupied field: members of the Fresh Start Group are taking an interest in both.  It may be that David Cameron gets lucky and that, at some point before the next election or shortly after it, fiscal union takes place, the Eurozone solidifies into a German-led bloc, and the rest of the EU breaks up, allowing opportunities for him and his Foreign Secretary to push for a new, more loose, non-federal arrangement (or group of arrangements) along the lines they want.

But if this doesn't happen, they will be left with their manifesto, which will contain repatriation proposals, and perhaps a referendum pledge too.  If Mr Cameron then wins a majority at the polls and flies off with his repatriation package, the overwhelming likelihood is that the Franco-Geman axis, if not the vast majority of EU countries, will simply tell him to get stuffed.  Anyone keeping even half an eye on developments abroad will have seen rising impatience in Germany and elsewhere with the Prime Minister and his Government.  UKIP may view Mr Cameron as the EU's puppet, but the Germans see him as a British muppet.  Der Spiegel has referred to "a Europe in which the British are at best spectators in the gallery, like Statler and Waldorf, the two old men on The Muppet Show".

When the Maastricht Treaty was negotiated, Helmut Kohl helped out John Major, as he saw it, by agreeing to the social chapter opt-out, and enough concessions to satisfy the Conservative Party - just.  In the 20 years that have passed since, the party has turned almost entirely Euro-sceptic and Germany's patience with Britain is badly frayed.  Mr Cameron is unlikely to be offered even a fig-leaf by other EU countries if he pushes the repatriation of powers post-election.  Their most likely response to such an initiative is: "Look, if you want to leave, then leave.  Afterwards, we can discuss Britain's new relationship with the EU.  But please don't try to blackmail us into changing the EU into something it's never been and we don't want it to be.  If you want powers back, you will have to go."

What will the Prime Minister do in that event?  After all, he is adamant that he wants Britain to remain within the E.U.  There are two possibilities.  The first is that he sticks to his view.  The second is that he shrugs his shoulders and recommends that Britain pull out.  Extraordinary as it may seem, the latter course is now possible.  I am not sure that the significance of the Gove intervention - the Education Secretary's admission that he would vote to pull out of the EU were there an In-Out referendum today - has been fully grasped.  It marked the moment when a view held by roughly half of party activists and a significant percentage of Tory MPs was backed without reproof at Cabinet level - and by the Government's most successful senior Minister at that, and one who may yet be, for all his protestations to the contrary, a future party leader.

In other words, Mr Cameron may not want to leave the EU, but his party may leave him no choice.  He is doing what Conservative leaders have been doing ever since John Major took office - namely, being dragged along, however unwillingly, however protestingly, however gradually - by the strength and power of the Euro-sceptic tide within their party.  It has closed the door to joining the Euro.  Its MEPs have left the EPP.  The remaining party believers in the ideal of the European project are a tiny rump.  The balance of opinion among MPs lies between a big return of powers and leaving altogether. There are two flaws for Euro-sceptics with this prospect.  The first is that the voice of business, not politicians or journalists, will be decisive in any In-Out referendum, and there is no strong business voice for pulling out.

The second is that Mr Cameron is most unlikely to have a majority after the next election: the collapse of the boundary review and the way first past the post currently works are seeing to that.  Any move to fiscal union is likely to happen on Ed Miliband's watch.  But if Mr Cameron is returned with a majority, he is going to have to ask himself which alternative is more likely to split his party irrevocably in the event of other EU countries giving a repatriation of powers package the thumbs-down - staying in the EU as it is and is likely to stay, or leaving altogether. Whatever might happen, the debate within the party is moving on from weighing the merits of an In-Out referendum against those of one on a repatriation of powers package (for which, as I say, Britain would be very unlikely to gain the consent of other EU countries).

Increasingly, it is fixed not on the principle of an In-Out referendum, but on timing and tactics. There are those who would have a poll now, believing that the British people would vote to pull out.  And there are those who, like David Davis and Liam Fox, seem to believe that the electorate would vote to stay in - but that this verdict would change were it hammered home to voters that the EU they want, the free trade arrangement for which some of them voted in 1975, is not on offer.  The means of driving that message home that they appear to foresee is the rejection of a repatriation of powers package by those other EU countries.  This, they seem to think, would swing a referendum from a yes vote to no.  They may be right.  They may be wrong.  Their view can be praised as shrewd or dammed as being too clever by half, and an attempted evasion of the right and inevitable.  But whatever one thinks, one conclusion is clear: slowly but unmistakably, Mr Cameron is being hauled nearer to a poll on EU exit.