An open letter to David Cameron

Dear David,

The day after the Czech Republic became the last country to ratify the Lisbon treaty, you abandoned your pledge to hold a referendum on it and you unveiled a new EU strategy that is skilfully balanced. You threw enough red meat to eurosceptics to convince at least some of them that you are serious about stopping the flow of sovereignty to the EU. But your measured and non-confrontational tone left Britain’s European partners hopeful that they will be able to do business with a Cameron government.

If you win a clear majority in the next general election, you will be able to push through the three acts of Parliament you have promised: one requiring a referendum to approve any future treaty change; another insisting on a parliamentary vote before Britain gives up any more vetoes; and a third limiting future transfers of sovereignty to the EU.

But your plans to opt out of the Lisbon treaty’s Charter of Fundamental Rights as well as treaty articles on judicial co-operation and social policy require the consent of every other member-state. You seem to think it will be quite easy to negotiate opt-outs in the form of protocols, but I am not so sure. The Lisbon treaty already gives Britain opt-outs from EU justice policy, as well as a protocol clarifying that the Charter does not create new social rights in Britain. Your EU partners may agree to strengthen these UK-specific provisions.

Opting out of treaty articles on social policy, however, will be very difficult. Many EU governments believe that Britain’s lax labour market rules allow it to attract an ‘unfair’ share of foreign investment. They have no intention of allowing Britain to cast off the few rules that the EU has adopted on employment and social policy. Moreover, they know that if Britain won an opt-out, the Central Europeans would insist on the same privilege.

When John Major negotiated an optout from the Maastricht treaty’s social chapter (later revoked by Tony Blair), he had leverage: he was prepared to veto the treaty. When the Irish and Czech governments asked for clarifications to the Lisbon treaty this year, they threatened not to ratify it unless satisfied. You will have no such leverage, for the Lisbon treaty is now in force throughout the EU.

Wisely, you say you will move slowly and take your time to negotiate opt-outs, while you build friendships with other leaders. Newly-elected prime ministers are generally treated with good will. But that will be tempered by the ill will stemming from your decision to leave the European Peoples Party, the main centre-right group in the European Parliament. As you know, that upset Chancellor Merkel and President Sarkozy, the two most powerful figures in the EU. Their annoyance will diminish over time. But if your ministers resort to the kind of inflammatory eurosceptic rhetoric used by some members of the Major government, other leaders will be less willing to help you out. Hopefully you will make a better job of controlling your ministers than John Major did with his.

My advice would be to take what you can get in opt-outs, but don’t ask for too much, lest you fail. The good news for Conservatives is that there are no new significant directives on social policy in the pipeline; you can dress up this legislative inaction as a victory. Save some gunpowder for battles in two areas unconnected to treaty change where British interests may be threatened.

One is the EU budget. Don’t forget that in 2012 the Commission will unveil proposals for the next seven-year budget cycle. Ask for a cut in the proportion of the budget that is spent on farming, and for more to be spent on useful objectives like carbon capture and storage or pan-European energy grids. Demand that the budget rebate won by Margaret Thatcher in 1984 be retained.

The other is the City, which hosts the biggest financial services industry in Europe. Since rules on financial markets are set by majority vote, other governments may be tempted to push for laws that harm the City. Insist on a political agreement giving Britain a de facto veto on directives affecting this vital national interest.

Whatever you do, you will fail to satisfy hard-line eurosceptics in your rank-and-file. One day you will have to confront them and explain how the EU has changed since your party was last in power. When you were a special adviser in Major’s government, the European story was about France and Germany setting the – sometimes anti- American – agenda, new treaties giving the EU more power, and the question of British participation in the euro.

But a quarter century of treaty change has come to an end, and the EU is now focusing on external challenges like climate change, energy security, transnational crime, the impact of the China’s economic rise and the revival of Russian power. With the Nordics and Central Europeans in the Union, France and Germany, though still influential, no longer decide what happens. The EU’s centre of gravity is Atlanticist, broadly pro-market and opposed to the harmonisation of employment law. The euro exists but Britain is under no pressure to join. Federalism is a spent force, confined to the political elites in Belgium and Luxembourg, a few Italian and German politicians and people in EU institutions. Most European leaders are pragmatic about the Union, viewing it as a vehicle through which they can pursue national interests. In that they are not so different from Conservatives.

But Britain’s European debate is largely stuck in the past and often one-sided. Some other governments worry that in the long run Britain could quit the EU altogether. You don’t want that. But if you allow the hard-line sceptics in your party and the populist media to set the tone of the debate, that outcome may not be so far-fetched. At the very least, a Britain that was locked into a confrontational relationship with the EU would be marginalised and deprived of influence. If you become prime minister, at some point you will have to stick your neck out and tell the British people that constructive engagement in Europe serves their interests.

Yours sincerely, Charles Grant