This article was published in the "Comment is Free" section of The Guardian.
There's little point in Britain staying in the EU now – Bill Cash has won
10 December 2011
The massive slump in imports into the UK announced on Friday is in many ways more important than Bill Cash's victory in Brussels. The voice we are hearing is that of David Cameron, but the script has been written by Bill Cash. His long (and initially lonely) campaign to reduce Britain's place and influence in Europe is now gathering speed. There is now little point in Britain being in the EU as all the key decisions will be taken by the 17 eurozone nations, plus the six which want to join the euro. Denmark keeps its currency but the Danish opt-out is purely nominal as the Danish crown follows the ECB policy in all regards and Danish exports are based on quality of goods, not a devalued currency.
Economic analysts are urging caution on the better trade figures announced today. The main news is the massive slump in imports as British demand shrinks thanks to the drop in consumption brought about by government policies. Britain is not spending and banks are not lending, so it is little wonder that fewer goods are coming into the UK. In that sense Britain is part of the generalised crisis of the EU economic zone. Tories and the rightwing press have sought to paint the EU as the source of the UK's economic troubles. It would be more accurate to report that weak, near-recession UK economic policy is doing serial damage to the rest of Europe, which no longer find buyers for their goods and services in Britain.
Bloomberg Business News has noted that manufacturing shrank "at the fastest pace in two and a half years in November". So much for rebalancing. And David Cameron, whose family wealth comes from the City, showed that in Brussels he would prefer to leave Britain isolated rather than negotiate a deal with the rest of Europe for a new treaty that began to move Europe away from the era of unchallenged, unregulated finance capitalism that brought about the crash of 2008, and provoked the subsequent recession.
George Osborne is currently taking the EU commission to the European court of justice over its decision that euro derivative trading should take place within the eurozone. Currently 75% of this trade happens in London, where hundreds of thousands of EU financial sector workers are located. The ECJ, like any court, smells the political coffee and Cameron's isolationist veto will reduce still further the UK's standing as a serious EU player. The loss to the UK of euro derivative trading may not matter in Rotherham, but it will hit the City and financial sector employment in London.
Cameron was within his rights to insist that any new EU treaty should not damage Britain. And, paradoxically, he may have saved the eurozone rescue package, as it is doubtful any new treaty would get through the sieve of an Irish or Danish referendum. But EU leaders knew that, and were happy to guarantee Irish low corporate tax rates and other sweeteners to ensure the treaty would be accepted.
Instead Cameron now finds himself without any friends. He has isolated Britain from the dominant centre-right political grouping where many EU decisions are discussed ahead of the main council meetings. Contrast this to Margaret Thatcher who was a robust, engaged European player. Yes, she won her (fully justified) rebate, but she did so by being in the room where decisions were made. She supported the Single European Act – the biggest sharing of sovereignty with other nations in UK history. She backed Jacques Delors for commission president. She increased the UK contribution to the EU from £656m in 1984 to £2.4bn in 1990. She lost her cool over the famous Delors TUC speech, but history will place her as a powerful influence wielding UK prime minister operating in Europe.
Cameron has now handed over power to France and Germany to decide Britain's fate. The iron law of five centuries of British statecraft – opposition to any continental hegemon – has been cast aside. The new rules will be shaped without UK input. They are not narrowly on sorting out EU debt problems, though it is remarkable that a Conservative prime minister is rejecting German demands for tough enforceable controls on public borrowing and spending.
Britain will have to comply with the new rules of face restrictions on access to the new market arrangements. John Major thought he had won "game, set and match" with his Maastricht treaty opt-outs in 1992, but his victory proved hollow – just as Cameron's veto will turn out to be.
On Tuesday, at a major business leaders conference, a top French business leader said Britain was "anti-European". I corrected him, pointing out that France had voted "non" to the EU constitutional treaty in 2005 and that 400,000 French citizens made a living working in the City – our country was that EU-friendly.
But I fear the Frenchman was right. Bill Cash has won and there is little point in Britain staying in the EU now. Will we prosper outside, or semi-withdrawn? Norway implements more EU directives than Britain and all of Swiss laws have to be EU compliant. Both nations pay billions to Brussels as a kind of fee to get market access.
But no one has made the case for Europe in British public life for several years now. The press is vehemently hostile. Tony Blair did make some pro-EU speeches but always in Europe, never in Britain. After 2007, the pro-EU cause was silent in government. The chief boast for some in the party is that Britain never entered the euro – something which was never on the cards, because of well-known economic difficulties. The once proudly pro-EU party of Paddy Ashdown, Charlie Kennedy and Ming Campbell is now silent. Britain has never been so marginalised and few MPs have won as big a victory as Bill Cash did in Brussels this morning.