Deal or no deal? Cameron bid to reform EU hits fresh obstacles

The moment of truth has arrived, and tonight the serious talking will begin.

When David Cameron and Donald Tusk, president of the European Council, sit down for a three-course dinner and fine wine at Downing Street this evening both men will have one overarching objective. They may come from different political traditions and have views about Europe that are, in many respects, profoundly at odds. Cameron leads a trenchantly Eurosceptic party, much of which is deeply hostile to Brussels. Tusk, on the other hand, is a bearer of the European torch, a true believer who boasts a string of medals for his contribution to European integration, including one awarded by Jean-Claude Juncker in 2013 for his role in facing down Eurosceptics in his native Poland. Yet the prize they both crave over the next few weeks is precisely the same: to find common ground and a deal that will keep the UK in a reformed EU, averting a “Brexit” that would constitute the biggest blow to the European project in its history.

Around the table there will be “six a side”, as one insider put it. Cameron and Tusk, plus five close advisers each. Neither team will be under any illusions about what is at stake or how difficult the talks will be. One senior government minister close to the negotiations on the UK’s demands said last week that, for all Cameron’s months of shuttle diplomacy between European capitals, no one yet knew precisely what would be on offer from Tusk on the most important issue of all – the prime minister’s demand for a four-year ban on EU migrants claiming in-work benefits. Next week Tusk will send out a legal text to all 28 EU leaders, and then some clarity might emerge. “But we really genuinely don’t know what will be offered or how it will all work.” He admitted that, with many opinion polls showing the “ins” only narrowly ahead of the “outs”, it was also difficult to predict with any certainty at all whether the UK would be a member of the EU in six months’ time or not. These are tense times at the top of government.

Cameron wants, ideally, to hold his promised in/out referendum as early as June but, for that to happen, a deal must be struck at a Brussels summit in less than three weeks. It is a race against time. A large band of Tory MPs who want out of the EU are ready to pour scorn on anything that is put on the table. Last week former cabinet minister John Redwood described leaked plans aimed at addressing the UK’s demands on immigration as a “sick joke”. To trump such inevitable derision, Cameron must deliver something convincing, but he is not there yet. After talks over lunch with Juncker on Friday, a travel-weary prime minister admitted as much, saying there was a long way to go in a short time. “It is going to be hard work,” he said.

In several areas Cameron has secured what he wants, largely because these demands were always going to be relatively easy to meet and fairly uncontentious. Despite objections from federalist countries, led by Belgium, he will secure an opt-out for the UK from the EU commitment to “ever closer union”. The powers of national parliaments to block or delay EU legislative proposals will be increased as he wants, and there will be safeguards for non-euro countries who fear that decisions of single-currency members will adversely affect their economies. Yet these achievements, while significant, are already largely factored in. The “in” side promote them as hugely significant and the “outs” as utterly trivial. However, the debate that really matters on immigration and welfare has hardly begun.

Since the moment Cameron set out his demands for a four-year benefits ban more than a year ago, there has been intense resistance. Eastern European countries, led by Tusk’s Poland, have strongly opposed such a move, saying it would discriminate against their citizens, because Polish workers arriving in the UK would receive less than UK workers. It would be a breach of EU rules on freedom of movement.

Last week, however – to the obvious irritation of the UK government – sketchy details were leaked in Brussels of what seemed like a compromise offer. Plans could be developed for an “emergency brake” under which the UK or any other member state would be able to impose a ban for up to four years on migrant workers claiming benefits if the country applying to pull it could show that EU migration was placing excessive pressure on its welfare and social systems and its public services. A majority of member states would need to agree. Nevertheless the plan begged more questions than it answered. Charles Grant, director of the Centre for European Reform, says the emergency brake is fraught with difficulties.

“British officials want to be able to use the brake immediately. Yet the mechanism could well require EU legislation, which often takes more than a year. Second, according to what criteria would use of the brake be permissible? The British will want the criteria to be vague enough for them to be able to pull it easily; the commission and other member states will try to make the criteria objective and hard to satisfy.

“Most difficult of all, who decides whether a government can pull the brake? Initially, the commission insisted on that power for itself, which was unacceptable to Cameron. The current idea of a vote in the council of ministers may be more palatable.”

There is another potential problem. How will ministers be able to say there is intolerable pressure on services, including schools and hospitals, when their current line is that both are coping very well? Jonathan Portes, director of the National Institute of Economic and Social Research, said: “There simply is no remotely credible evidence that current levels of migration, from inside or outside the EU, are an ‘emergency’ for UK public services. In fact, schools in London, where the pressures are greatest, have outperformed the rest of the country by a considerable margin, as ministers have rightly highlighted. Pressures on the NHS are very real, but are overwhelmingly due to older Britons, not migrants – who are mostly young and healthy. Waiting times are no higher in areas with most immigrants.”

Cameron knows he cannot sell the deal as outlined so far, as it is full of holes and lacks detail. Over dinner, he will tell Tusk that an emergency brake would have to apply “immediately”, meaning it could be triggered the day after the referendum result in UK (assuming the vote is to stay in). Brussels will struggle to agree to that. He will also say it should apply to current levels of immigration and should be in place for long enough to resolve the underlying problem. And, crucially, a senior government source said he would also demand that it only be a temporary measure on the road to a more permanent solution. But what the permanent solution might be is not clear at all.

A government insider said: “The prime minister will tell Tusk that the ‘brake’ proposal sketched out so far does not go far enough and will need to be significantly strengthened if it is to be as powerful as the prime minister’s four-year proposal.”

In the face of vague and seemingly ill-thought-out offers, Cameron needs to talk tough, to avoid the idea taking hold that he is being sold a duff agreement by Brussels. In recent days, around 15,000 Labour activists have received a letter from the former cabinet minister Alan Johnson – who is heading the party’s “in” campaign – containing orders for the EU campaign.

“Winning that referendum and keeping Britain in Europe will be key to our country’s future,” Johnson tells them. The problem is that, without knowing what the meat of the deal on immigration is, they are hamstrung. Writing in the Observer today, shadow home secretary Andy Burnham expresses fears about the deal and about how the case for staying in is being made. The spirits of the “in” campaigners are only partly lifted by the fact that the Brexit supporters are arguably in even worse shape, with claims circulating of an attempted coup against Dominic Cummings, the chief executive of the Vote Leave campaign, following rows over strategy.

In the next three weeks Cameron will hold further discussions with Germany’s chancellor, Angela Merkel, and the French president, François Hollande, as well as other EU leaders. He would like a deal in February at a summit in order to prepare for a June referendum.

But the substance is more important than the timing. Cameron does not want to be remembered as the British prime minister who took the UK out of Europe after securing a reform deal that he could not sell. If that were to happen, he knows that the SNP could call a second independence referendum and the UK could lose Scotland too.

Last week one senior government official was gloomy about the prospects of a breakthrough soon, complaining that many in the EU don’t understand British politics, and the real risk of a Brexit. But many in the EU would say that the UK does not understand the EU, and that is the heart of the problem.

Powered by article was written by Daniel Boffey and Toby Helm, for The Observer on Saturday 30th January 2016 21.33 Europe/London © Guardian News and Media Limited 2010