The UK's EU Referendum - DeHavilland

This third briefing in DeHavilland's UK/EU referendum series looks at what exactly David Cameron is seeking to achieve in his European 'renegotiation'. Ahead of the referendum, he has pledged to win reforms in four key areas: sovereignty, competitiveness, fairness, and welfare. As well as asking how realistic the British PM's goals are, this briefing surveys the different UK pressure groups that aim to affect the process.

Background Ahead of the UK's referendum on EU membership, Prime Minister David Cameron has promised to renegotiate the country's relationship with the bloc. The idea is that he will be able to campaign to stay in, having won reforms that make this a more attractive prospect.

There is inevitably something of a gap between what Mr Cameron says at home and what he and his team communicate to other national leaders. He has been intentionally vague in his public statements, trying to avoid any concrete promises which could come back to haunt him.

A lot of the early debate focused on the possibility of changing the EU's treaties – a process that would be complex, with various national referenda required. Others are therefore keen to avoid this, and, given the tight timescale, Mr Cameron has accepted that it will not be feasible before the date of the vote. Instead, he will aim for measures to be agreed which can then be inserted, backdated, into the treaties at a later date.

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Mr Cameron has broken down his goals into four broad categories: sovereignty, competitiveness, fairness, and welfare. These are explored in turn below.

1. Sovereignty

Very little in concrete terms. It is the concept of "ever closer union", mentioned in the preamble to the Treaty of Rome, which Mr Cameron finds particularly objectionable. There is a major question mark over just how much this means in practice, but it would be a symbolic victory for the British PM if he could secure some kind of exemption from this principle. Some British MPs want the UK Parliament to have a veto over any proposed EU legislation, but Foreign Secretary Philip Hammond quickly stated that this would not be

achievable, and that a "unilateral red card veto" for the UK would "effectively be the end" of the EU.

President of the European Parliament Martin Schulz is more doubtful, saying: "I see no chance of changing the ever closer union".

2. Competitiveness The chances of rewriting the EU's founding treaty are extremely slim, at least in the shortterm, as Mr Cameron appears to have recognised. Following June's European Council summit, he stated that the principle was not one the UK subscribed to.

"Ever closer union may be for others, but it will never be for Britain, and it is time to recognise that specifically"

Improving EU competitiveness is an obvious addition to Mr Cameron's wishlist, but is also naturally something that Brussels is working towards as well. In practice, the Prime Minister and his allies have said that this could mean faster progress on free trade agreements (notably with the US), revising the Working Time Directive, and liberalising trade in services.

In other words, some kind of explicit opt-out for the UK is what is being sought here. What form this will take, and whether it will have any legal force, is unclear, but if the British PM is careful, then he should at least be able to claim results here.

While some national leaders may be a little bemused that Mr Cameron is making such a fuss over one phrase in the preamble to a 60 year-old treaty, it is doubtful whether many are ideologically attached to it. It is likely that the British PM may be able to claim a victory here, although it will be more spin than substance. He will have allies too – the Dutch Government in particular has backed away from centralisation of EU powers in recent years. Then-Foreign Minister Frans Timmermans wrote in 2013 that "the Cabinet is convinced that the time of an ‘ever closer union’ in every possible policy area is behind us". He is now First Vice-President of the European Commission, and the man tasked with leading negotiations with the UK.


The new European Commission has already set out its 'Better Regulation' agenda, which aims to produce fewer, better laws, reduce bureaucracy, and fully consider the impact of any new legislation. A lot of this is strikingly similar to what Mr Cameron has been calling for, and with Commission Vice-President Timmermans leading on both the initiative and the negotiations, it seems that everyone is already singing from the same hymn sheet. This should therefore be an easy win. There is however no real way that Mr Cameron can affect the timetable of trade negotiations.

Italian Prime Minister Matteo Renzi said in 2014 that the EU he seeks "can be possible only if we invest in a different idea of growth, a different idea of institutional levels and for this reason the alliance with David is absolute".

He speaks for many other leaders, almost all of whom are roughly in agreement that a more competitive, less bureaucratic EU can only be a good thing.

3. Fairness

Fairness is a highly subjective concept, but in this case it mostly refers to avoiding UK entanglement in Eurozone issues, and protecting London's financial services industry from over-regulation.

As it is the most technical of Mr Cameron's points, 'fairness' is where most work might need to be done.

There is some sympathy for a two-speed Europe as outlined above, and other nonEurozone Member States would back safeguards against further economic integration. When it comes to protecting the City of London, however, it will be a harder fight. The UK recently managed to achieve a de facto derogation in the proposed EU bank structural reform proposal – a significant victory. The French Banking Federation declared, however, that a total exemption would have been “one of the most shocking financial scandals in European history” – a warning that Mr Cameron will not have it all his way.

The European Commission has already indicated some willingness to accommodate British concerns, altering the rules of the EU's bailout fund, the European Financial Stabilisation Facility (EFSF), to ensure that non-Eurozone states would not be liable in the case of a Eurozone country's default. With the Greek crisis moving the Eurozone in the direction of greater integration, and the UK referendum pulling the non-Eurozone Member States away, a shift towards a more 'two-speed Europe' may solve a lot of problems, particularly as the other nonEurozone countries are equally invested in securing legal safeguards. There is also plenty of evidence that the UK is able to defend its financial services industry, winning an important court case on euro clearing houses this year, and securing the post of Financial Services Commissioner for the former Leader of the House of Lords, Lord Hill of Oareford.

4. Welfare

Welfare is undoubtedly the most contentious and emotive issue on the table, and could be where British negotiations hit the rocks. There is little that a Member State can do about immigration from within Europe, but Mr Cameron wants to restrict benefits, in particular to prevent EU citizens living in the UK from receiving tax credits for at least four years.

"Changes to welfare - to cut EU migration will be an absolute requirement in the negotiation that I'm going to undertake."


View from the UK Free movement of labour is one of the basic principles of the EU's single market, and any effort to change this is viewed with deep suspicion. Tightening up the rules on benefits to a certain extent is a more realistic goal. Two recent cases at the European Court of Justice, both involving migrants to Germany, have seen the court supporting the state's right to curb benefits. Last year it said that national legislators have the "competence to define the extent of the social cover" offered in the form of certain non-contributory benefits. More recently a senior official said that EU immigrants can be blocked from claiming social benefits for the first three months of their stay. However to go as far as Mr Cameron wants is likely to be seen as discriminatory, and so the four-year residency test for benefits may also apply to UK citizens.

Several leaders have already warned that they will not tolerate any threat to freedom of movement. Poland in particularly has made this clear, with a spokesperson for PM Ewa Kopacz saying that she is "strongly opposed measures that may lead to discrimination against Poles and other EU citizens seeking legal employment in the UK". The new Danish PM Lars Løkke Rasmussen, however, said following his election that "We will stand behind Great Britain and likeminded nations’ efforts to ensure that the EU doesn’t turn into a social union". Other leaders of rich northern Member States feel similarly, and so there is almost certainly a compromise to be found. The trick will be channelling other countries' discontent with migration towards a specific, achievable goal.


David Cameron cannot pursue his EU reform without domestic input. Whilst the official “Yes” and “No” campaigns are just beginning to coalesce, there are a myriad of pressure groups each with their own agenda. The groups listed below are just some of the many that will seek to influence the public over whether or not the British public judges the renegotiation outcome a success.

Describing itself as an “independent, nonparty grassroots campaign”, Get Britain Out defines its aim as taking back Britain from “unaccountable bureaucrats in Brussels”. It believes in a trading relationship with the EU and cooperation with European neighbours on important cross-border issues. Crucially, it believes this aim can only be achieved by withdrawal.

“Our liberty and sovereignty are disappearing. Help us to stop Brussels sprouting”: The Better Off Out campaign bills itself as a cross-party campaign for putting a positive case for the UK leaving the EU. Among its supporters are notable eurosceptics including UKIP MP Douglas Carswell and Conservative MPs such as Philip Davies and Philip Hollobone. Its claims to policy success include helping to secure the promise by David Cameron to hold an EU referendum.

Labour peer Lord Mandelson, Conservative MP Ken Clarke and former Liberal Democrat Chief Treasury Secretary Danny Alexander act as Presidents of British Influence. The group claims that membership of the European Union is essential for the UK’s

prosperity, security and wider development. BI Director Peter Wilding has recently criticised Business for Britain for “moaning about ‘red tape’ on behalf of a few disgruntled hedge fund managers”, and urged it to “reflect and address the concerns of the people who are creating the jobs, attracting the investments and innovating the industries that made Britain great”. In August 2015, it was reported that Lord Mandelson would be acting as a communications adviser to the European Commission on preventing a British exit from the EU.

Avoiding an outright claim that Britain should leave the EU, Business for Britain set out its stall as “campaigning on behalf of business for a renegotiated deal with the EU reinforced by an In/Out referendum”. Despite efforts to differentiate itself from “No” groups, it is nevertheless perceived as being highly Eurosceptic: Business for Britain argues strongly that the UK’s current relationship with the EU is flawed, leaving Brexit the only option without a radical change to the status quo. Led by Matthew Elliot of the TaxPayers’ Alliance, and the NOtoAV Campaign, it can count upon the published support of 1,000 business leaders across the UK - including the founders of retail heavyweights Phones4u, Littlewoods and Monsoon - to provide ammunition for the contention that the economic facts do not support remaining in the EU in its current form.

Set up by Roland Rudd, Chair of international strategic communications firm Finsbury, Business for New Europe (BNE) is a proEuropean coalition of business leaders. It campaigns for Britain to remain in the European Union whilst simultaneously


advocating reform. BNE’s advisory council is made up of business heavyweights from the likes of BAE Systems, Goldman Sachs, RBS, and Amazon UK, and therefore unsurprisingly campaigns primarily from an economic perspective. Its campaign draws on the testimony of both big business and SMEs to make the argument that EU membership is good for British jobs and competitiveness. By the same token, it advocates engaging with decision makers from within the Union as the best way to secure business-friendly improvements in regulation, global free trade, and the connectivity of the single market.

Avowedly pro-EU, the European Movement consists of a number of cross-party political figures led by former Conservative MP Laura Sandys. As a result, it is willing to broaden the debate beyond the purely economic perspective provided by business-backed campaign groups. Through its membership of the European Movement International, it works closely with similar organisations in other countries to argue that Britain’s economy, security and society are significantly enhanced by its membership of the EU. The European Movement is also willing to confront issues such as immigration, contending that although it is a problem which should be taken seriously, leaving the EU will not provide the answer.

One of the most venerable bastions of Eurosceptic thought in the British political landscape, the Bruges Group is an independent think-tank that claims to spearhead the intellectual battle against the notion of ever-closer union. The organisation’s mission statement states its objective: to promote discussion on the

European Union and to advance the public’s education in European affairs. A regular holder of public meetings, seminars, debates and conference and with connections to highprofile politicians such as former Chancellor of the Exchequer Lord Lamont of Lerwick and Conservative MP John Redwood, the Bruges Group is sure to offer one of the most thorough intellectual assessments of David Cameron’s reform offer.

A number of former UKIP donors have established a new campaign, the TheKnow.eu, to persuade the British public to vote to leave the EU in 2017. Businessmen Arron Banks has set-up the group, which will launch in the autumn. The group will use ten ambassadors drawn from different walks of life to reach the public. It has described itself as “non-political” and it is committed to making a “relentlessly positive” case for the UK being out of the EU.

A cross-party group of British parliamentarians, Steve Baker (Con), Douglas Carswell (UKIP), Kate Hoey (Lab), Kelvin Hopkins (Lab), Bernard Jenkin (Con), Owen Paterson (Con) and Graham Stringer (Lab), have formed the Exploratory Committee for the EU Referendum. The group argues that the Government’s renegotiation strategy has not shown any sign of addressing what they claim is the supremacy of EU law over UK law on everwider matters, or sought to define the relationship between the Eurozone and nonEurozone states. While it is not an official “Out” campaign, the group is intended to provide resources for critical thinking and promote cooperation


among those who might contribute to any withdrawal effort.

Kate Hoey and Graham Stringer, alongside fellow Labour MP Kelvin Hopkins and leading Labour donor John Mills, have formed the “Labour for Britain” pressure group. In contrast to the Exploratory Committee, Mr Mills has cast the organisation’s agenda as being one of “change or go”, and suggested that the group could campaign for an exit if Mr Cameron fails to secure meaningful change.

Former Home Secretary Alan Johnson has been appointed to lead the pro-European Union group within the Labour Party. Mr Johnson has adopted a reformist tone in his initial remarks and emphasised the wider stabilising influence of the UK remaining part of the EU. The other leading figures within the “Labour Yes” group are its co-chairs, MPs Pat Glass and Phil Wilson.

Timeline For details of all key dates in the run-up to the referendum, see DeHavilland's timeline, which will be continuously updated as the situation evolves. Bookmark this link to stay on top of events.

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