David Davis's Partly Out/Wholly Out EU referendum

By Paul Goodman
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First we had the In/Out referendum. Then the In/In referendum. And now David Davis would like to introduce...the Partly Out/Wholly Out referendum.

That's the main point of his speech on EU policy delivered to ConservativeHome earlier this afternoon. His plan is as follows.

An Act of Parliament would be passed in this Parliament which would set two referendums in motion.

• First, a "Mandate referendum" would take place, to give a Conservative Prime Minister a mandate "to get as close as possible to the trading alliance, the common market we all voted for in 1975". If passed, voters would have made it clear that they want to leave the EU as it presently stands.

• Next, if the people had voted "Yes", there would be a renegotiation with the aim of getting as close as possible to that trading alliance.

• And finally, there would be a second referendum - a "Decision Referendum" - which would give voters the option of accepting the renegotiation terms. Mr Davis wants the Mandate Referendum as well as the Act to take place in this Parliament.

In short, he believes that only action, not words, can now see off UKIP (which fits in with his declaration on Marr yesterday that another referendum pledge by Mr Cameron wouldn't now be trusted).  Mr Davis referred to his strategy as a "UKIP killer".

Here are some quotes from the speech:

• On why an In/Out referendum is mistaken:  "I am squarely in favour of...a referendum – but it must be done properly. Some of you here may be old enough to remember the last Europe referendum – the 1975 vote on Britain’s membership of the Common Market. You may also remember that a year before that referendum, polls showed most people were planning to vote “No”. But in the intervening twelve months the European Commission, the TUC, the CBI and the government of the day used every scare tactic in the book to secure a “Yes” vote.  They claimed leaving the Common Market would mean permanent decline for Britain – less international influence, less work, less trade and less money.  As a tactic it was shameless, but it worked.  On the day, two thirds of voters backed Britain’s membership of the Common Market. “Those who cannot learn from history are doomed to repeat it”. We were taught a lesson in 1975. If we were to have a simple In/Out referendum and voters were scared into voting “In”, that would be the worst case scenario for Britain."

• On why Ken Clarke is "antiquated" and "wrong": "Why was Britain’s relationship with Europe treated as a third rail for so long? The answer is simple – fear. First, fear of splitting the Conservative Party. This is no longer a real threat. The Conservative Party is now over 90% Eurosceptic. Second, fear of the consequences of leaving the EU.  Many greet any such suggestion with warnings of disaster. I was never convinced about this, and today such histrionic scaremongering looks simply antiquated and self-serving. This slide shows the trend in UK exports to the EU, which are declining, and outside the EU, which are growing.  They crossed 4 years ago. And these trends will continue because world markets are now growing much faster than the EU. Third, governments are disinclined to enter into negotiations when they appear doomed from the start. This fatalistic line was taken by the Labour spokesman yesterday. Even amongst those who want to take powers back from the EU, there is a fear that other Member States would not play nice and that the negotiation would fail. I don’t believe this either."

• On why Mr Cameron's veto didn't stop anything and why vetoing the EU budget won't stop anything either: "The point of giving member states a veto is to allow them to stop something happening....The veto didn’t stop anything – it has ended up as a sort of pre-emptive opt-out.

 The same will happen with the EU Budget when it is discussed in three days’ time. The Prime Minister has threatened to veto the Commission’s demand for an inflation-busting 5% rise.

Of course he must veto such an extravagant proposal. But it will not achieve any cuts in the budget.  EU rules mean that if agreement is not reached, the budget will be approved annually by Qualified Majority Voting. This morning’s Financial Times reports that the EU leadership are trying to bypass us yet again. This will allow the EU to increase its budget in line with inflation, shielding it from the austerity the taxpayers who fund it must face. This threatens Britain’s national interests. A more integrated Eurozone will vote as a united bloc within the EU. With Germany and France at its heart, it will be a powerful force for further integration and the transfer of powers from national governments to EU institutions."

• On what powers we should take back and halting the acquis communautaire: "We should seek the repatriation of a whole range of powers to create a new relationship between Britain and the EU.  We should take back all of our justice and home affairs powers. We should take back immigration powers. We should take back control of social and employment legislation. We should give our government the final say on health and safety legislation.  And we should protect Britain from financial regulation designed to punish the UK’s success.  We should take back all of these things and more, and take them back permanently... But this of itself is not enough. It is no good simply negotiating away the things we do not like about Europe only to face a future in which EU institutions, backed up by ever more prevalent qualified majority voting, continues to erode our national interest. We need a permanent, universal opt-out that allows us to escape the damaging effects of costly and unnecessary EU laws. If we do not like a new law, Parliament should be able to reject it. Some will say this is impossible. I categorically disagree." 

• The benefit of the strategy abroad: "There is little doubt that the initial response of the European elite will be to resist the idea of creating a whole new class of membership that takes head on the acquis communitaire. One of the characteristics of the EU is that it never backs down in the face of national demands - except for one circumstance, namely when they are backed up by a referendum. When Ireland put the Nice Treaty to a referendum, and it was rejected because it threatened their military neutrality, the EU gave formal undertakings that they would not be forced into a common EU defence policy.  When French and Dutch voters rejected the Constitutional Treaty in a referendum, it was dropped and rewritten. Only a referendum forces the EU to rethink. So the Mandate referendum would both stiffen the spines of our negotiators, and undermine the legitimacy of the European resistance to change...The legal certainty of a decision referendum would also signal to the EU that we are serious – that this negotiation was not sabre rattling, and that a failure to conclude an agreement that recognised Britain’s democratic right to make its own decisions in areas of critical national importance would lead to a parting of the ways."

• The benefit of the strategy at home: "But there is a domestic political side effect. The optimal timing for this is to decide the policy in 12 months and hold the mandate referendum in late 2013 or very early 2014. Before the European Parliamentary elections.
  That timing would mean that all political parties would have to face up to the problem and decide their European strategy in real time. One of my colleagues described this idea to me as a UKIP killer. That is not the purpose of the strategy, but it will give the Conservative Party a proper platform to fight that European Election. To make this work we have also to be clear what our position would be if the European Union did not deliver a package that appealed to the British people....We have a range of options, from European Economic Area and European Free Trade Agreement membership like Norway, or the series of bilateral arrangements that Switzerland has, to a World Trade Organisation-based minimalist relationship. My preference would be that we should remain within the Customs Union of the EU."

3.45pm: Download a PDF of the full speech --- David Davis --- It Is Time To Decide