PM ‘fully aware’ strategy needs EU to believe UK might quit

I’m told the PM was inclined to get the long-promised Europe speech out of the way before Christmas so it didn’t obscure the childcare, social care and other mid-term policy announcements scheduled for January.

He also didn’t want it crashing into a key European summit negotiation – those prove harder to avoid as they are almost monthly. But the window proved tight – only Tuesday week was available because of other commitments – and that’s given another good reason to delay to 2013.

The biggest reason though which has kept this speech in wraps for very nearly one year is caution. We were originally promised a speech outlining where UK policy was going on Europe in the immediate aftermath of the UK veto at the December 2011 summit – that summit, we were told, was a product of a changed Europe and the UK deserved/needed a new strategy to deal with the new reality. But voices in David Cameron’s ear, often from within the Whitehall machine, have urged caution and have gulped at the proposals in play. Various combinations of referendum/consent have been looked at, but the PM seems to have settled on a manifesto commitment to renegotiate British terms of membership early in the next Parliament and then put the redesigned membership to a popular vote: are we in or out?

One Cabinet minister associated with the more outspoken end of the Eurosceptic market told me the PM is “fully aware” that the EU would have to believe the UK was willing to quit if the UK was to have any chance of getting a proper repatriation of powers and the sort of slimmed down membership people like Boris Johnson have been demanding. But, the Cabinet minister told me, David Cameron feels he can’t himself say it. He repeatedly says he wants Britain to stay in – to say the opposite would frighten businesses and maybe even some voters too.

Then there’s the alienation of other EU leaders we desperately need as allies in negotiations – one No. 10 aide complains that the UK it is constantly on its guard these days to avoid being cast as the scapegoat for Eurozone failure to agree at any summit. The threat to leave is the obvious strategic underpinning of the entire strategy but as far as the PM is concerned it is the threat that’s best not heard from him.

The PM’s aides, meanwhile, continue their search for plausible allies in the repatriation battle. The Dutch PM, Mark Rutte, spoke last week of the need for some powers to come back from Europe – the UK is trying to find out what he meant and whether it’s compatible with the social/employment/fisheries repatriation that gets talked about in No. 10 and elsewhere. No. 10 aides point at how the European Commission has acknowledged it can’t do everything and might have to slim down in some areas. The same aides point out how there has been some repatriation of fisheries powers already.

But there’s another conversation in government that goes well beyond that pretty ambitious menu: Cabinet ministers (not to mention countless other Tories elsewhere in the ranks) who talk about resenting just about every single rule of the single market, the product stipulations etc that Brussels sees as central to a fair and level table in trade. Those same Cabinet ministers speak for a school of Euro-scepticism that David Cameron would find hard to satisfy even if his own renegotiation went dreamily and without a hitch.

This school of Euro-scepticism isn’t going to roll over, will be fired up by the months of EU-chat ahead and in the second half of 2014, when the EU could be absorbed in Eurozone intensification, you have a potential perfect storm of mis-matched expectations and EU anxiety in the run-up to a 2015 general election. All that and businesses jumping about complaining about uncertainty over the UK’s position in Europe. David Cameron worries about unleashing forces he cannot control with the much-delayed speech, and you can’t blame him. But it was his idea.

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