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The EU and what the Conservatives should be doing about it Fraser Nelson  Stuart Wheeler  STUART WHEELER Businessman and political philanthropist Click here to read the speech by Stuart Wheeler & FRASER NELSON Political Editor of The Spectator and columnist for the News of the World Click here to read the speech by Fraser Nelson THE CONSERVATIVE PARTY AND THE EU Click here to listen online to Stuart Wheeler and Fraser Nelson STUART WHEELER Stuart Wheeler is a retired businessman and Founder of the spread betting company IG Group, he sold his remaining shares in 2003. After completing his National Service in the Welsh Guards, he practiced for three years as a Barrister and then spent ten years in merchant banking, starting IG Index in 1974; which enabled spread betting on the price of gold. IG Index was soon expanded to include commodity and financial futures. In 2001 he donated £5 million to the Conservative Party, and has since made other donations but recently announced that he would be donating money to UKIP and supporting them in the Euro elections, whilst supporting the Conservatives in the local elections. Stuart Wheeler is a campaigner for a referendum on the Lisbon Treaty and took the Government to Court for breaching their manifesto commitment to hold a referendum on the EU Constitution. Stuart Wheeler will say at the Bruges Group meeting; "Will Ken Clarke vote against the Lisbon Treaty if there is a referendum on it? William Hague says that he expects,expects, mark you, that he will. What kind of language is that? Why doesn’t William Hague know how Clarke will vote? Did he and David Cameron not ask him that simple question before they appointed him to the shadow cabinet? Ken Clarke himself was quite specific on the subject as a backbencher; he said that “calls for a referendum were absurd”. “William Hague indicated that the Conservatives were likely to attempt to scrap the treaty – possibly by calling a retrospective referendum. Heavens above! What the voters want is categorical commitments, not a cowardly selection of weasel words”. FRASER NELSON Fraser Nelson is a journalist and political commentator who is regularly seen on television discussing political issues. He is the Political Editor of The Spectator magazine and political columnist for the News of the World. Previously, he was political editor of The Scotsman newspaper and The Business magazine. He is an economic libertarian, sceptical of the reaction to global warming and is a supporter of traditional conservative policies and the Conservative Party, yet he is independent and not uncritical. Speech by Stuart Wheeler Perhaps I should point out that I am not a member of any political party! I shall start by saying a bit about why our current relationship with the EU is most unsatisfactory, but I am going to say rather more about what we need to do about it.  The UK needs to trade with the whole of the rest of the world. Even if the EU were a flourishing organisation it would be a mistake to allow it to get in the way of our ability to trade elsewhere. In fact, however, it is far from a flourishing organisation. Its share of world output in 1980 was 26%. Its forecast share in 2015 is 17% - an amazing drop. Partly this is not its own fault: the number of workers available to meet the needs of those who no longer can work, because of age, goes down and down and down, whereas in the United States, India and perhaps China it is the other way round. Partly, however, it is very much the EU’s fault. Its interminable regulations and restrictions on what businesses can do, and its rules, intended to protect the employment of individuals, but in fact having the opposite effect, because employees hesitate to employ those they cannot sack. lead to high unemployment, contribute very much to the EU’s decline.  Then there is the Common Fisheries Policy, which the Norwegians were sensible enough to reject, even though their rejection prevented them joining what we then, in 1973, thought of as the Common Market. That policy has virtually wrecked this country’s once great fishing industry. The Common Agricultural Policy which makes our food much much more expensive, protects mainly French farmers at the expense of our taxpayers, and often makes it impossible for developing countries to sell their food to us.  We are threatened with the danger that a European army will be created. Whatever one thinks of the rights and wrongs of the invasion of Iraq, one thing became very clear at that time: there is no way we shall ever get all the countries of Europe to agree on military action.  We are losing more and more of our vetoes and, taking energy as an example, we can very easily find ourselves obliged to share the oil we produce with our neighbours in Europe.  The most crucial thing, however, is the appalling cost of our membership. We are all, I think, rightly, concerned that the UK is going to have to borrow £175 billion this year and virtually the same next year. But that borrowing will not go on forever. What will, unless we do something about it, go on forever, is the inexorable and gigantic cost of our membership. If we accept the figures of the TaxPayers’ Alliance the cost is around £120 billion a year i.e. about two-thirds of that horrifying figure that we have to borrow. So the idea that Europe is boring and irrelevant, and that the recession is so important that we should forget about Europe, is just ridiculous. It is to a large extent the cost of being in Europe that is putting this country in the difficulties it is in, although I certainly do not exclude from blame the bankers or the Labour Party.  Let us look at that £120 billion figure in another way. What it amounts to is £2,000 per person per year. Think of a family of four with perhaps only one breadwinner. Such a family has on average an income after tax of about £17,000 and, with four people in it, at £2000 each, it’s being made worse off by £8,000 by our membership of the EU. And indeed on the EU’s own figures the advantages we get from the internal market are only about 40% of what we pay in order to get them.  I hope I have said enough, though I might have said quite a lot more, to make the case that things needs to change. The crucial question for this country is what is to be done about the EU and, since the Tories are likely to be the next government – and indeed I hope they will be – the question becomes what can be done to get the Tories to do the right thing? Normally, as they have made very clear, they do not like “banging on” about Europe. They have, however, noticed that we are to have euro-elections on the 4th of June. So, on 11th April, the Daily Telegraph carried an interview with William Hague. Nothing, nothing could have illustrated better why I shall vote UKIP in the euro-elections. There was in that interview absolutely no commitment to anything. Let’s look at it: If there is a referendum on the Lisbon Treaty will Ken Clarke vote against it? William Hague says that he expects – expects, mark you – that he will. What kind of language is that? Why doesn’t William Hague know how Clarke will vote? Did he and David Cameron not ask him that simple question before they appointed him to the shadow cabinet? Ken Clarke himself was quite specific on the subject as a backbencher. Calls for a referendum were “absurd”.  Take another point. The Conservatives should make it absolutely clear that if elected they will immediately call a referendum on Lisbon. But what did we find in that interview? I know it is different now and I shall come back to that, but William Hague indicated that the Conservatives were likely to attempt to scrap the treaty possibly by calling a retrospective referendum. Heavens above, these are weasel words gone mad.  The Tories want to sound tough on Europe without making any commitment they think they can avoid. The leadership is terrified that a tough stance will split the party. But who will be on the europhile side of that split? Just two big beasts: Clarke and Heseltine, and one or two smaller beasts. The party has shown quite rightly that it is not afraid of big donors, by expelling me! It should not be afraid of big beasts either.  By the way, it is only the leadership that is so timid. A backbench Tory MP came up to me and begged me to go on doing what I was doing: “80% of our members are behind you” he said. And the polls are perfectly clear about the voters as well as the MPs. The voters were recently asked by the pollsters YouGov which of ten things they would most like to see done. Top: reduce immigration. Second: reduce the powers of the EU and increase the powers of Britain’s parliament. Way down below: reduce taxes, deal with climate change, scrap ID cards, etc.  Fortunately it has become clear to David and William at long last that the voters do care about Europe a lot and that they want clear commitments, not a cowardly collection of weasel words.  As we have all been told: a week is a long time in politics - and that Telegraph interview was nearly three weeks ago. Yesterday it was the turn of The Times to have interviewed William Hague and, low and behold, we read that he promised immediate legislation to reject the treaty if it had not yet been ratified by the whole of the EU. It is not hard to work out what caused this wonderful conversion. The 4th of June was looming, the campaign for the euro-elections was just about to begin, the lessons from the polls were sinking in. Alas, however, it is hard to get rid of bad habits. The commitment to a referendum if Lisbon was not law was fine. But what about the more likely situation that Lisbon is already law when they get in? Back we go, I am sad to tell you, to the weasel words. William Hague left open the door to the possibility of the Tories promising a referendum in their general election manifesto, even if the treaty had been ratified by all. Well, leaving open a possibility is not reassuring. And, given the fact that it is 3½ years since David Cameron promised to leave the EPP, a pledge he restated immediately after his election as leader, one wonders how long that possibility to which the door has been left open, would come to be considered.  Let’s face it: the Tories have not the slightest intention of calling a retrospective referendum on Lisbon. They simply hope that the weasel words they have used will sound tough, so that they may not lose too many votes on June the 4th. Those who think, like I believe most of us here this evening think, must strive mightily to get such a big UKIP vote that the Tories realise that they have to guarantee us that referendum, irrespective of whether Lisbon is law or not when (and if) they get in.  People have asked me, since my donation to UKIP, why I did not stay within the Conservative Party and use, as they put it, my influence. At one time I did have some sort of influence. I might almost say I was subject to a charm offensive: Would I like to have lunch with shadow minister X?..... Would I pop in for a discussion with shadow minister Y?..... Would I like to see William Hague to discuss Europe? The reason of course was nothing to do with the merits of my views. It was to make me unlikely to say something awkward for the Conservatives or, God forbid, to support UKIP.  I cannot resist one final point about that Daily Telegraph interview. William Hague asked for a protest vote. Well, voting Tory would not be a protest: they are miles ahead in the polls. He must have meant “Vote UKIP”! Obviously he too will soon be expelled. Welcome to the club, William!  Well, I have had a bit of a go at the Tories. So let me make it quite clear, first that I am not at all bitter about their decision to expel me, which was very understandable, and secondly that I definitely do hope that they win the general election. It is, however, entirely in their hands whether they get the support of people like me. All they have to do, to benefit both the country and themselves, is to give that guarantee of a referendum on at least the Lisbon Treaty, and they will, in my confident opinion, win the general election in a trot. Speech by Fraser Nelson Thanks very much and thank you Stuart, its great listening to you. The great thing about the News of the Worldcolumn is that its readers are the sort of people who decide British elections. And from the letters I’ve had, they are more Eurosceptic than us in this room! There is a strange mismatch in British politics between British public opinion and the Westminster consensus. And the public opinion is brought to the door of Westminster by – well, I would say mavericks like Stuart Wheeler but he is not a maverick, he is straight from the mainstream of what they think in the real world. When he backed UKIP he placed at the back of the minds of the Conservative Leadership a reminder not to be complacent: that if they don’t watch it, we’ll lose votes to UKIP. So it is possible to be a loyal Conservative and to wish UKIP well because as James Goldsmith absolutely worked out, they play a part aligning Westminster consensus with real world opinion, by making clear there is an electoral price to pay if you ignore the Eurosceptic majority. I’d like to speak to you tonight about the Conservatives and Europe: what the thinking is and how it’s changing and how it’s likely to end up. David Cameron’s main wish for Europe I suspect is for it to just go away and for nobody to ever mention it again. We have to remember that Cameron is, of course, a victor in the Tory modernising project and the modernisers are primarily defined against their enemy in the rival parts of the party. Cameron always likes to say that he moved the Conservatives into the mainstream, at which point I’d remind him that the Conservatives got more votes than Labour in England at the last election. So of all those voters were marginal, what does that make the rest of society? So we don’t hear much about Europe now. While it is hugely a matter of national importance, the Conservatives are still in therapy about this as a party. They’re still scarred by the internal battles.  But we don’t need to fight as many battle because the last ten years have really proved the Europsceptic’s point. It’s a brave man who argues that Britain will be better prepared for the recession if we didn’t have a floating currency that could collapse so spectacularly. Our exports have fallen only 10%, devastating of course, but it’s not the 20/30% fall in exports that Germany is suffering, its not what Ireland is suffering, its not what Spain is suffering. The only good thing about this recession is that we have a floating currency making our good cheaper.  But the Euro, of course, did not lower retail prices as they said. It didn’t promote trade it wasn’t good for jobs. All the arguments the sceptics were at one point hypothetical before the introduction of the Euro have been truned out to be true. So you would think there shouldn’t be that much of an argument within the Conservative Party either. As Stuart says, where is this pro-Euro wing of the Tories?  I can understand for people of Ken Clarke’s generation. When he was young there was this idea that a united Europe might end the prospect of war between the nations. It was of course a huge issue for guys of a certain generation, but not younger ones. If you meet the Conservative, the new MPs, I’ve met quite a lot of them, and they’re really Eurosceptic. They have a picture of Thatcher on the wall with Jack Delors on the dartboard really. These guys are as Eurosceptical as you can get, they are as pro-Thatcher as you can get and when we get 140 new Tory MPs into Parliament then you really will struggle to be able to fit the pro-Euro wing of the party into a London black cab. The idea of monetary union has flopped.  So the new MPs will substantially change the shift of outlook of the party. But not now. Now we have Conservatives who still gets flashbacks of William Hague’s “save the pound” campaign in 2001. Too many Tory MPs don’t think about Europe rationally, in terms of what the public want. They think about it in terms of positioning the party so its not seen to be banging on about Europe.  Now the EPP. Of course, the Conservatives will withdraw from the EPP. This was a pledge David Cameron made to steal Liam Fox’s thunder in the Leadership Campaign and William Hague is saying he is confident that he will get enough members to form a group. But there is no doubt it’s a headache for them, they probably would get the numbers, well they might do but its going to look embarrassing but who really cares. I mean News of the Worldreaders really could not care less about what group the Conservative MEP sitting in the European Parliament. What they are more concerned about is why their bins aren’t being emptied once a week like they used to be and the answer to that is the EU Landfill Directive. Its strange how so many of the arguments that really genuinely irritates my News of the World readers day-to-day have their roots back in Brussels.  The Lisbon Treaty is, right enough, fading from the memory. There was a polling presentation recently that Cameron gave to his party where you ask people what their number one concern is. Not many say the European Union because the competition is quite stark. You’ve got crime, you’ve got immigration, you’ve got the economy, you really have to get down to a small number of probably people in this room – and their blood relatives - before you get to people saying that Europe is actually a bigger problem than all of these other things. But crucially this doesn’t mean they’re not concerned about Europe, it just means its not their number one concern and these pools of priorities are very, very deceptive because they don’t show... of course when you ask the British public what they think about Europe as the European Commission does regularly, we are the most resolutely and defiantly Eurosceptic member in the Union.  Opinion polls haven’t shifted on that and when you put to the public, to my News of the World readers, what they think about the Lisbon Treaty or anything that sounds vaguely European they don’t like it and they don’t trust it. It’s their country and they don’t want to see anymore sovereignty signed away. But this isn’t always apparent from the polls which the Conservatives see internally, so again this leads to a mismatch between what rocks the public’s boat and what rocks the boat in Westminster.  But we are approaching European elections and the rhetoric is shifting. Take Lisbon. Britain’s yes, let’s not forget, was pushed through by a Labour majority, it was signed by the Queen and literally lying in a vault in Rome now. I love that detail, they have to fly it over to Rome so you know we can’t tear it up here.  It’s difficult for the Conservatives because what do you do? There are some Eurosceptics who believe the Lisbon Treaty would basically take our relation to Europe to such an intolerable degree that it would force renegotiation because everything that would stem from it would be so palpably unacceptable to the public. But there is no doubt that it post-ratification, Lisbon is a very difficult question for the Tories. We all depend on our Irish brethren really to say to their Government: “what part of no don’t you understand?”.  I’ve actually got quite a lot of confidence in the Irish, I mean sure they are in recession now but they will be thinking to themselves well if we had a floating currency maybe our exports might be lifted, maybe things wouldn’t be quite so bad for us. And they’re right. I don’t really think that the Irish are going to be bullied into voting it a second time, although it has to be said a lot depends upon it. All we can do is pray and hope that, seeing as we gave Ireland their independence, they might return the favour and vote no a second time.  But there is no doubt that the Tory language is shifting and they want to hint that they’re squaring up to Europe again. And let there be no doubt they are doing so in large part because the threat of UKIP. Yet it’s not the same threat, not now. Five years ago we had Robert Kilroy-Silk who was a kind of strange phenomenon, a populist. There is such discontent with all of our political parties and again the main political affiliation of my News of the World readers – I do talk about them a lot because you know they represent the public far more than, I hate to say, my dear Spectatorreaders who are pretty much sold on all of this. But my News of the World readers would probably vote for UKIP because it is a protest vote. They don’t believe that the man with the blue rosette is going to serve them any better than a man with a red rosette. In fact their problem is the man with the rosette of any colour, they dislike politicians as a class and you can see this in the reaction to the expenses. The stature of which politicians generally has fallen so much they can’t see why they should fork out for an 88p bath plug, let alone anything that Jackie Smith’s husband might be getting up to.  But there is an anti-politics vibe our there which UKIP could harness if it catches the wind. But this time, without a populist figure like Robert Kilroy-Silk UKIP will struggle to push one of the mainstream parties into fourth place. It is Labour’s nightmare that Labour finishes fourth in the EU Elections, it may well do, we’ll see but personally I doubt it. Of course there is Libertas as well with Lynton Crosby behind them who might split the UKIP vote. So I think UKIP’s show in this election will to a large extent inform the Conservatives as to how Eurosceptic they have to be. If UKIP don’t do very well, I don’t think Cameron will turn up the anti-Euro rhetoric. So this is why what Stuart is doing is important: arguing the majoritarian Eurosceptic side of the corner and holding their feet to the fire.  There are solid Conservative Party policies on Europe. They will probably pull out of the EU Army. This is something which Liam Fox wants to do, and the money saved can be spent treating mentally traumatised servicemen instead. This makes a great deal of sense. But the EU Army isn’t the problem Cameron will face in office. It is a very different problem he’ll face in office.  I’ll give you an example. One of David Cameron’s policies is to reduce the rate of VAT on small businesses and give them a VAT holiday. Now its strange that they don’t instinctively know - as politicians of another generation might know - that VAT is an EU tax imposed to us by Brussels under very strict regulations laid down by a directive which was renewed only two or three years ago. It is not ours to change, we don’t have the power to do this and yet the Conservatives genuinely don’t seem to realise. I mean Nigel Lawson stood up in the House of Lords and said to them, don’t you realise you can’t play about with this, there is no methods, it’s not our tax. There are many advantages to having a Conservative Party led by younger dynamic men - but the problem is if you don’t remember the battles of the 1970s you’re condemned to repeat the errors.  Another example. Cameron wants to abolish school expulsion tribunals. I mean it’s a great idea. If a school wants to expel a chap and the parents can argue in a tribunal and reverse the decision of the school, its not really satisfactory. But if you talk to any of the many European lawyers around this country, they will tell you that any attempt to abolish the school tribunal would be kicked out by Strasbourg immediately because it violates the human right to a fair trial. So Strasbourg has tentacles in our law. This Labour Government has done such a fantastic job of concealing it, of disguising as British regulation, regulation that’s hoisted on us by Brussels. So it’s not just the public but many of the guys who are about to govern this country don’t realise what is within their power and what isn’t.  Now if David Cameron doesn’t confront Europe he will very quickly find the limit of his power, the extent to which the hands of a British Prime Minister are now tied by Brussels. Take giving anonymous evidence in a murder trial, I mean Jack Straw says he wants a review of this - not realising again that this is a Strasbourg thing. Europe has done very, very well in keeping up the illusion that we are far more self-governing than we are. Opposite the Houses of Parliament there is this big building called the Supreme Court of the United Kingdom, but the Supreme Court of the United Kingdom isn’t in London its in Strasbourg and the Conservatives will find that very, very quickly when they get into government and try to do everything from VAT changes to school expulsion tribunals. They’ll find that they can’t because we signed away that aspect to our sovereignty some time ago.  So what tools are there available to the Conservatives to deal with Europe? They will have the Treaty referendum, if Ireland hasn’t signed up to it. If Ireland has then we’ll see. I mean there are people in this room far more qualified than me to explain our options, given that the Queen’s ‘yes’ is locked up in the sacred Roman room.  One option is to take a kind of muscular approach to Brussels - basically telling it to go to hell, as De Gaulle did. We have got a kind of common law approach here in England, unlike the Roman law in most of Europe. We tend to gold plate rather than to confront EU regulations where as laws are seen as advisory in much of Europe as anyone who has drive in Italy or France can tell you. Take the age discrimination legislation directive brought in a couple of years ago. Ireland didn’t apply this to its pensions industry because of course it would create merry hell. I mean you charge somebody a pension depending on how quickly they’re likely to die, its basic. But we did apply it to our pensions industry and it caused havoc. We had the option not to, but our civil service is programmed to take everything that came out of Brussels and to make it even stronger than it already is.  It is tempting for the Conservatives to think: well we’re basically going to say as Chirac did, we’re going to defy you and if you don’t like it we’ll see you in court in five or six year’s time. But it’s very difficult to do that in Britain because it’s not just the guys in the Government who decide the gold plating, it’s the whole system which is geared up towards giving Brussels that little bit of extra power. I mean we for a while had a whole department committed to deregulation that couldn’t deregulate because 80% of the regulations come from Brussels. And there are so many things that you just can’t do. I believe there will be a crunch point. But for many reasons, for the same reason that Cameron doesn’t want to fight the 50p tax, he doesn’t want to lead his fight on Britain’s position Europe because of the key messages have changed.  You can’t blame the guy for wanting to win an election. Now if I was his pollster I would probably tell him this was the great way to maximise the results, to assuage those wavering LibDem voters. But the Conservatives are at a junction now. Our economy needs saving not just managing as we saw from that historically tragic budget two weeks ago. So the choice they face now is this: do you want a large majority or do you want a large mandate? Because to rescue this country in the way that Thatcher did in 1979, it is not enough to go with the flow in Europe, it is necessary, as it was necessary with Thatcher, to fight, to fight hard and to fight every way you can because we will need every tool at our disposal to recover the economy from the almighty mess which Labour has left it.  And its not just the tax rates, we need to deregulate as well and the re-regulation of our economy in the last 12 years, most of it coming from Brussels, is one of the great tragedies. If Brussels can, it will absolutely get its claws into the City of London. And Gordon Brown, for all his boundless mischief, was quite good at fighting Brussels off when they wanted to regulate. Brown realised the City - while it lasted - was a great milch cow for him, it was his great paymaster and the more Brussels regulated, the less money Gordon Brown would get. He fought a pretty good fight - on the City at least - but it was an exhausting one and you need to do it at every single level. If the Conservatives choose not to fight then Brussels then they’ll move instantly into this area.  So I’m hoping that the Irish will save us and pretty optimistic that they do, but if they don’t then Cameron will have to face some bitter truths. Truth number one is that the Bill of Rights is not worth the paper it’s written on as long as it is inferior to Strasbourg. It can be declared senior in a few sentences. As we saw in the ‘Metric Martyr’ case, Parliament is sovereign. The Bill of Rights can be defined as the most senior document in the English legal system - all you’ve got to do is pass a law saying so. But Dominic Grieve disagrees, I mean he is like a lawyer as is his wife. He is one of these Conservatives who thinks that it would send a terrible sign to other aspiring EU entrants if Britain were to scrap the ECHR on the grounds that its playing havoc with our English law. Maybe so, but who is more important? The aspiring EU countries, or the 70% of the British public who want the ECHR gone? Is it more important to encourage aspiring nations to join the EU or to do what the overwhelming majority of British public opinion wants you to? There are hard choices, you can’t duck them. Or, if a government does, it will end up with fewer of the tools which it needs to govern.  Churchill once said to the Americans, they will do the right thing in the end after exhausting all other available options. I suspect the same can be said about the Conservatives on Europe. You can’t avoid this fight, just delay it. Only four days ago we had some EU Health Commissioner instructing us not to fly to America because of the flu jabs, I mean given how much more vaccine they’ve got over there, you’re far safer in America than you would be in Europe. But the encroachment is happening very quickly. It will have to be faced down at some point.  I can imagine Cameron wants to do have this fight now. But he will have to have it later. So, Stuart, good luck to you in pursuing the fight and making these arguments on the EU because it has never been more important that the voice of the overwhelming majority is heard in that small, tiny village called Westminster.