EU Referendum

The British vote on EU membership is long overdue

The Prime Minister’s failure to seize the chance to vigorously renegotiate Britain’s relationship with Brussels could lose him the referendum, says Liam Halligan, sending the UK out of the EU

David Cameron under pressure over EU budget ahead of Commons vote

David Cameron may have been too soft in his EU renegotiations Photo: Sebastien Pirlet/REUTERS

 Liam Halligan

Another Europe vote is needed because the last one, some 40 years ago, is now entirely obsolete. The ballot paper in June 1975 asked: “Do you think the United Kingdom should stay in the European Community (The Common Market)?” Faced with that question, we opted to stay in by a margin of 2 to 1.

Since then, though, “Europe” has come to mean far more than “the Common Market”. That is why many older British voters feel duped, having agreed 40 years ago to a trade association, rather than what “Europe” has become.

The nine nation states in the mid-1970s European Community have become 28 members of the European Union – which is very different. Treaties such as those signed in Maastricht and Lisbon have radically altered our relationship with the EU, considerably diluting British sovereignty, with institutions such as the European Parliament and the European Court of Justice now powerful entities in our national life. Because of them, the UK is subject to numerous EU directives and treaty obligations, not least “the free movement of people”. That is the objective truth.

Thousands of migrants marched across the border between Croatia into Slovenia as authorities intensify their efforts to attempt to cope with Europe's largest migration of people since World War II

The migrant crisis has major political ramifications for the EU and for the UK’s vote on membership of the Union  Photo: Jeff J Mitchell/Getty Images

I am often asked if Brexit, the United Kingdom leaving the European Union, could really happen. Of course it could, which makes the upcoming referendum of the utmost importance to Europe’s business community. Opinion polls show Brexit is certainly possible, with the “Leave” camp lately coming from behind and the argument now roughly balanced. Some recent polls, which the “Remain” side insists are unreliable, have even put the Leavers ahead.

Around a third of the electorate wants to stay in the EU come what may, while another third definitely wants to leave, regardless of the outcome of David Cameron’s ongoing renegotiation of the UK’s relationship with Europe.

Vital, then, are the middle third of “maybe yes, maybe no” and “don’t know” voters.

It is also clear that, while general elections are won or lost in 150 or so marginal constituencies, in a nationwide referendum every voter counts, regardless of where they live. So the upcoming campaign, which could start in just a few months, will be extremely hotly contested. That is partly because Europe, on both sides of the debate, often gets emotional. It is also because, in a tight referendum, the support of any one of the UK’s 46 million voters could prove ultimately decisive.

So what could swing it? The most important factor, in my view, is what actually happens in the eurozone between now and the referendum, whether that referendum is this coming June, in October or sometime in 2017.

Over the past year, a major crisis has erupted within the EU’s borders, of course, as refugees and economic migrants have streamed into Europe from North Africa and the Middle East, causing deep alarm in the UK, not least over the sprawling migrant camps at Calais, filled with people desperate to reach our shores.

The subsequent linking of Europe’s open borders to the terrorist atrocities in Paris, rightly or wrongly, has brought “free movement of people” into sharp focus, not only here, but even in countries such as Germany and Sweden.

Several EU member states, inundated with migrants, and trying to suppress public outrage, have temporarily suspended the Schengen open-border agreement, among the EU’s most cherished principles.

One theory is that Cameron wants a June referendum precisely to get it out of the way before the height of the summer, when further waves of migrants are expected to flow into Southern Europe.

Even if that happens, there is no denying, aside from this summer’s crisis, that record net migration into Britain, not least from new East European EU members, has been met with record levels of immigration-related public concern.

Among many of those sure to vote to leave the EU, and among some of the middle-third waverers too, immigration will play a pivotal role in the referendum, and it is naïve to think it will not.

Michael Fallon has warned that some communities are now “swamped” from workers from the European Union

Defence secretary Michael Fallon has described all cabinet ministers as “Eurosceptics”  Photo: Christopher Pledger/Telegraph

Then there is the single currency. We are often told that the eurozone crisis, which has caused turmoil on global markets in recent years, particularly in the summers of 2011 and 2012, is now over.

That is not true. The euro remains an economic powder keg, an incoherent fiscal and monetary nonsense that, in the absence of a significant deepening of political union, including the pooling of a sizeable share of government spending across member states, will ultimately implode.

This view, a heresy when some of us ventured it as the euro was launched in the late 1990s, is now widely accepted.

The single currency, for all the personal abuse thrown at those who opposed UK membership, has been an unmitigated disaster. By binding Southern European members of the EU into a high-currency straitjacket, it has condemned tens of millions of people to live in economic stagnation. Youth unemployment in Portugal and Spain, as well as Greece, remains way over 40pc, a human tragedy. Even Italy, one of the world’s leading economies, has barely grown since the euro was launched.

Far from promoting “unity” or “cohesion”, as the eurocrats told us it would, this elitist monetary experiment has stoked the kind of cross-border division and nationalism we thought Europe had consigned to history.

Quite possibly, there is much worse to come. If the eurozone does endure further market squalls over the coming months, if the European Central Bank’s ongoing solution of spraying virtually-printed money across the region goes wrong, if rising US interest rates cause a panic, and the euro spasms badly, with bond yields spiking anew, then the broader European project will take yet another hit, encouraging more UK voters to plump to leave the EU.

Along with migration and the euro, campaign finance will also obviously play an important role in this referendum.

In 1975, the Yes camp vastly outspent the No side, by around 8 to 1. That was partly because, back then, the UK economy was seen as “the sick man of Europe”, and as a result British business almost unanimously backed continued European Community membership.

This time it’s different. Millions of pounds have already been raised by both sides, largely from big corporate donors, leading the Electoral Reform Society to warn last week of what it called a “spending free-for-all” that could “damage the chances of the referendum being conducted in a fair and democratic manner”. Before the vote is formally called, permitted donations remain unlimited and anonymous, hence the current battle to raise cash now, before the limits kick in.

Another important ingredient influencing voters, whether the referendum is next year or 2017, will be who publicly supports each camp. Both sides are racking up various political heavyweights, and there will, no doubt, be a slew of tit-for-tat celebrity endorsements.

Then there is Cameron’s “renegotiation”, of course, with many voters, myself included, waiting to see what the Prime Minister achieves before deciding which way to mark their ballot papers.

So far, the Prime Minister seems to have blundered. Why commit yourself – and Britain– to staying in the EU at the outset, before the negotiation? Any deal will go badly, unless you are genuinely prepared to walk away. An establishment man to his fingertips, Cameron appears to view his role as avoiding, as far as is humanly possible, doing anything that might rock the EU boat.

Such an insipid strategy could lose him this referendum. It is also squandering a precious opportunity to force the fundamental reform the EU so desperately needs.

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