15 April 2004

BLAIR PREPARES FOR CONSTITUTION U-TURN?

According to a front page Times story, the Prime Minister is "seriously considering calling a referendum on the new European constitution." Ministers and advisers at No 10 are said to be discussing options to hold a referendum either on the Constitution or on the wider issue of whether Britain "should be in or out of Europe." The Sun reports that there are seven senior Government figures prepared to back a referendum - Jack Straw, David Blunkett, John Prescott, Margaret Beckett, Peter Hain and Helen Liddell. Chancellor Gordon Brown may also be prepared to have a referendum "if the constitution is amended to reinforce his 'red lines' - which bar the EU from setting tax rates." The article states that the Prime Minister would not necessarily be unhappy if he lost a referendum on Europe because, according to allies of Blair, he will be able to prove his pro-EU credentials.

The last poll on the EU showed 64% thought "the EU is failing" and Britain should take back powers from it, with only 20% agreeing that it is a "success" and should have more powers (ICM, 24-5 March). With Eurozone economies stagnant and mass unemployment in Germany, it will be impossible for Blair to succeed in persuading people that giving more power to the EU would be a good idea. Also, with the right campaign, the 'no' side would struggle to lose: "this is about not giving more power to an outdated and failing EU - it is not about abandoning trade with Europe whatever the discredited Government spin machine says - vote no to the Constitution". Blair will not be able to persuade people that it really is about "yes to the Constitution or out of the EU" without the Tories endorsing such an approach, and all indications internally are that the Tories will handle this issue the right way. This negates the hope of Blair / Mandelson from 1997 - 2003 that the Tories could be entrapped into adopting a disastrous strategy. NFF private market research (some of which will shortly be made public) suggests that Blair would lose badly. Consequently, Blair may well be over-ruled by Gordon Brown on holding a referendum - it would subsume Brown's control of the euro tests, and while a loss may be acceptable to a Blair who may feel he is nearing the end of his time (such is current gossip, though we don't buy it), such a loss would torpedo the Government and Brown's ambitions. Perhaps the most likely outcome (suggested to us by Labour insiders)would be a manifesto promise of some sort of referendum to try to blunt the Tory attack during the election, leaving open the possibility of a referendum in the event of a post-election window perhaps coinciding with another Tory leadership election.

There is no easy way out for Blair: he has lost the argument on Europe since 1999, he won't win the argument on the Constitution, he has no agenda for reform of the EU himself, he is desperate to escape the embarrassment of Iraq with France and Germany, he would lose a referendum, and Eurozone economies are the worst advert for his European dreams - meanwhile, his Republican allies become more Eurosceptic every day and cannot understand why somebody right on Iraq can be so wrong on the EU.