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The Prime Minister Must Offer the Lib Dems an Ultimatum on Europe

13/05/2013 09:52 BST | Updated 12/07/2013 10:12 BST
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The big political event at Westminster last week was not the State Opening of Parliament and the Queen's Speech. It was Lord Lawson's article setting out why he has decided that the UK should exit the European Union. It increases the pressure on the Prime Minister to bring forward a government bill for an EU referendum to take place before the next general election.

The message from the both the county elections, from the by-election at Eastleigh, and even from South Shields is that voters are fed up with words, pledges, gestures and speeches. What they will respect is action, and continued failure even to attempt to act will not recover their respect for us.

Lord Lawson has changed the terms of the debate. There is now no room for ambiguity. He did not qualify or set conditions. His position sets a new standard of clarity and honesty in the EU debate. From now on, any MP or candidate facing the voters at the next election will have to answer the question straight. Are you for "in" or "out"? Anything less than a straight answer will be seen as dishonest evasion. Lord Lawson can hardly be blamed for opening this up. After all, it was David Cameron who proposed an "in-out" referendum. David Cameron has all the authority and ability to communicate necessary to advance the debate, but the longer he takes to give a clear answer to his own question, the less voters are likely to trust his position.

He is right when he says he wants the UK to have a "new relationship" with our EU partners. He is right to reiterate in his Bloomburg speech that "It is national parliaments, which are, and will remain, the true source of real democratic legitimacy and accountability in the EU." The problem is that the sovereignty of national parliaments is anathema to the EU, and there is no intention in the EU of changing that. Most people in the UK would vote for a new relationship based on trade and political cooperation, and if that means leaving the existing treaties, then so be it. The Bloomburg speech proposed "a new settlement with our European partners .....with the Single Market at its heart" but other member states see the present treaties and the Single Market as indivisible. The difficulty is that there is simply no concrete possibility of the UK obtaining "pick-and-choose" terms of membership while the UK remains signed up to the Lisbon Treaty.

This is where Lord Lawson's article is most deadly. He deployed one word more powerful than any other. He said any changes that the Prime Minister is able to secure in a renegotiation will be "inconsequential". That strips away any spurious credibility in an EU policy of "negotiate and decide" (an echo of John Major's hopeless position on the single currency which he abandoned immediately after he lost the 1997 election). At Bloomburg , David Cameron declared that, "A vote today between the status quo and leaving would be an entirely false choice", but Lord Lawson believes that the opposite is the truth; there will be no "new relationship" on the basis full membership of the EU and of the Single Market. The only choice is for more of the same, or out altogether.

This week, MPs will vote on an amendment to the motion on the Queen's Speech, "respectfully" to regret that it does not contain any EU referendum bill. The response from Downing Street has been confused and unprecedented. It appears that Conservative ministers will abstain on this vote. The Lib Dems remain determined to paralyse the coalition. The tail is wagging the dog. Ukip is now a more popular party than the Lib Dems and the difficulty for us is that Conservative voters overwhelmingly agree with them.

Ukip are wreckers not winners. Their success at the polls would defeat their own purpose, but unless Ukip supporters vote Conservative, there will not be a Conservative majority so there will simply be no referendum at all after the election. It is no good us just saying this and promising a referendum if we win in 2015. Unless Ukip supporters can trust that we Conservatives are prepared to legislate for a referendum to take place in this parliament, we Conservatives will continue to be deserted by our activists, donors and supporters. Such a bill might well be defeated, but then there could be no doubt where we Conservatives stand. And would Labour and the LibDems really want to frustrate what so many in the country believe in? It could get through. Win or lose the bill, this would be David Cameron's finest hour.

For the Prime Minister to insist that "we would require the agreement of our coalition partners" could be seen as placing politics above principle - an advertisement for self-imposed weakness. The opportunity for David Cameron is visibly to put the country before the coalition. The Prime Minister should offer them an ultimatum. Either the LibDems accept the majority view in Cabinet, namely that the government should bring forward a referendum bill, or they can leave the government. Acting sooner rather than later is both in the interests of the Conservative party and the nation. The British Chambers of Commerce have said that a delayed referendum is creating uncertainty and undermining business confidence.

This year is the 20th anniversary of the ratification of the Maastricht Treaty, which itself followed the 1986 Single European Act. Both gave the EU institutions huge new areas of competence and powers of decision over EU law. Since then, there have been three more treaties - Nice, Amsterdam and Lisbon - each continuing the process of political and constitutional integration. Even leaving aside the disastrous introduction of the Euro, the EU is now unrecognisable from the "common market" which the British people voted for in the 1975 referendum.

One of the original architects of the EU, Jean Monnet once said, "Europe's nations should be led towards a superstate, without their people understanding what is happening." The three main parties have remained in denial about the consequences of this, but the voters have noticed and they are hitting back by voting UKIP. Our relationship with the EU has become increasingly dysfunctional and damaging. They do not like politicians saying that nothing can be done about immigration, or 'benefit tourism' because of EU laws. They expect their national Parliament to make the laws. Our parliamentary democracy and system of democratic accountability is incompatible with the undemocratic and bureaucratic system established in the EU treaties. Moreover, business can see that the EU is now retarding UK economic growth. Our gross payment to the EU is rising to £19 billion by 2015 (far more than spending on overseas aid), while we are cutting defence, the police, local government, child benefit and support for disabled people. Businesses constantly complain about regulations which inhibit their competitiveness. Instead of making it easier to grow the economy and to reduce the deficit, the EU is mounting a regulatory attack on the City of London, which currently pays 16 per cent of all UK tax revenues. If we stay in the EU, we will have a slower economic recovery and end up with more debt and more cuts than if we leave.

What the UK wants is a new relationship with the EU based on trade and political cooperation. If David Cameron were to make it clear that he personally stands or falls on this principle, the people would back him.