David Cameron’s Tricky Two-level EU Renegotiation and Referendum Game

Dr Jane O'Mahony

While discussions on the Greek crisis and migration in the Mediterranean will dominate the European Council summit on 25 and 26 June, it will also mark the opening salvo in the British renegotiation of EU membership. In Brussels Prime Minister David Cameron is due to present his package for EU reform and with this the key elements of his renegotiation strategy to his European partners. In so doing, he is juggling a complex two-level negotiation game at the European and the national levels fraught with myriad challenges and pitfalls.

At the European level Cameron’s aim is to achieve either all or a large part of the following: what he and his Conservative ministers term ‘fundamental reform of the EU’, a properly-defined relationship between Eurozone and non-Eurozone members within the single market, curbs on the free movement of workers within the EU and a new red-card system for national parliaments on any future EU regulation. All potentially require treaty change and thus the unanimous agreement between Britain and its 27 EU partners by the end of 2017 at the latest. In practical terms, the renegotiation and referendum need to be concluded well before this given the exigencies of French Presidential elections, German Federal elections and the UK’s Presidency of the EU all due to take place in 2017. At the national level Cameron and his Foreign Secretary, Philip Hammond are also currently steering the EU Referendum Bill 2015 through the British Parliament, setting out in detail how the UK’s EU referendum will be conducted once the renegotiation deal is reached. In the parliamentary debates on the Bill so far, some concern has been evident over the proposed modalities of the vote, not least within the Conservative Party.

EU Level

Since Cameron’s victory on May 7, the broad parameters of the British renegotiating position have been slowly emerging. On 10 June, Philip Hammond set out his four point package of EU reform. Top of his list was his call for further enhancement of the EU’s single market, particularly in services, the digital economy and energy. He also called for the completion of trade agreements such as TTIP and a more generic wish for a reduction in the EU’s regulatory burden on business, particularly on SMEs. This chimes well with the priorities of the Juncker Commission and Vice President Frans Timmermans’ Better Regulation agenda with the promise to reduce red tape for small businesses and remove outdated regulation. Equally the European Commission has been moving on proposals for a Digital Single Market, an Energy Union and British Commissioner Lord Jonathan Hill’s work to establish a Capital Markets Union by 2019. None of this requires treaty negotiation.

Second, he called for formal guarantees for non-Eurozone members that their interests within the Single Market will be protected when it comes to any future reform of the Eurozone. For the British this has previously included a desire for special recognition of the position of the City of London. In this Hammond also embraced the concept of ‘differentiated integration’ and a more explicitly defined two pillar Europe. For many this means a two-speed Europe, presumably with Britain in the outer tier.

Third, Hammond called for national parliaments to have a greater say in EU decision making by allowing groups of them to come together and have the power to block any future regulation. Such a reform would involve greater scrutiny of Commission proposals by the Houses of Parliament, a focus that has waned in recent years. While the House of Lords continues to stand as a model for the scrutiny of EU legislation, a recent report by the Centre for European Reform highlighted the patchy record of the House of Commons EU Scrutiny Committee, with low attendance and a lack of engagement in EU affairs among British MPs a major issue.

Fourth, while recognising that the principle of the free movement of workers is fundamental to the EU, Hammond called for a reduction in the incentives ‘that encourage highly-skilled workers to travel to the UK to do low-skilled jobs’. This has been taken to mean no access to tax credits, housing benefits and social housing for four years for EU citizens working in Britain. In a highly publicised speech during the Rochester-Strood by-election in November 2014 (when the Tories were under pressure with the defection of then incumbent Tory MP Mark Reckless to UKIP), Cameron also called for the removal of job seekers from the EU if they have not found a job within six months, the contradictory proposition that EU citizens have a job offer prior to entry, stronger measures to deport EU criminals, tougher and longer re-entry bans for those deemed to be abusing the principle of free movement, as well as the ending of entry of non-EU family members without restrictions and the non-payment of child benefit to children abroad.

In recent discussions Eurosceptic Tory members signalled they also want a repudiation of the concept of ‘ever closer union’. This concept is toxic amongst many Conservative politicians and they wish to have it either excised from the EU treaties or for Britain to be exempted from it.

It remains to be seen whether Cameron will present all of these demands to his EU partners at the European Council summit and how successful he will subsequently be in achieving these objectives with 27 other veto players each determined to defend their national interests. As he himself recognised, ‘it will require a lot of hard pounding, a lot of hard negotiation’.

UK level

While the domestic game is somewhat less problematic, it does have its own challenges. The EU Referendum Bill has begun its journey through Parliament and while it is expected to get through the House of Commons relatively comfortably, its passage through the House of Lords may be bumpy, as the Government does not command a majority in the Upper Chamber. A number of Peers have strongly advocated extending the franchise to include 16 and 17 year olds, as in the Scottish independence referendum. The debate on the 2nd Reading of Referendum Bill revealed growing concern amongst Tory Eurosceptics over plans not to adopt a so-called period of ‘purdah’ in the run up to the referendum vote. According to Owen Paterson, a key figure in the 110-strong new Conservatives for Britain group of Eurosceptic MPs, the referendum would be seen to be rigged and not legitimate without it. Government sources subsequently offered assurances that public funds would not be used to publicise a yes vote in the final four weeks of the campaign.

Until recently, the mood amongst many in Britain had been to hold the referendum in May 2016, the same time as elections to the Northern Irish, Scottish and Welsh Assemblies, the London Assembly and Mayor of London. The Electoral Commissionstrongly advised the UK Government against holding the referendum on the same day as these polls to ‘allow the full participation of voters and campaigners, uncomplicated by competing messages and activity’. Indeed, the Commission advocated a gap of at least six months between completion of the approval of the EU Referendum Bill and the referendum vote. During the committee stage of the Bill, faced with strong opposition from the SNP and Tory Rebels, Cameron climbed down on this.

Cameron also has to deal with pressure from Scotland as the SNP’s Nicola Sturgeonhas demanded a formal role at the UK negotiation on EU reforms ahead of the referendum, as well a ‘double majority lock’ meaning that any vote to leave the EU should have clear backing from UK’s four nations, each delivering a majority vote to make withdrawal legal.

And finally, once Cameron has achieved his renegotiation and takes it to the electorate, how will the parties organise in the campaign? Both the Tories and Labour will be split on the EU and the question for Cameron is then whether he will allow cabinet ministers to campaign against EU membership and participate in civil society groupings pushing for Brexit.

Dr Jane O’Mahony, Senior Lecturer in European Politics and Global Europe Centre Associate