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- Herausgeber: Biteback Publishing
- Kategorie: Fachliteratur
- Sprache: Englisch
- Veröffentlichungsjahr: 2019
When a senior Cabinet minister dismissed corporate fears over a hard Brexit with a curt 'F**k business,' it seemed emblematic of a growing distance between the country's politicians and its wealth creators. Recounted by the founder and chairman of the UK's largest independent lobbying business, Iain Anderson – who has had a ringside seat at the interactions between business and politics since the 2016 referendum – this is the definitive and shocking story of how and why politics and business have become utterly disconnected in the last decade; culminating in the rancour, mistrust and confusion of Brexit. Featuring exclusive and candid interviews with those at the heart of No. 10, the Cabinet and Parliament, and with the foremost business leaders of this Brexit generation, F**K Business portrays the exhaustion felt by all major companies over politics. With unparalleled access to the key players, the book describes how business sought to prepare for Brexit only to be frustrated by the inability of Parliament to set out a clear pathway ahead. But it also points the way ahead for a new relationship and a brighter future. This is essential, often shocking, reading for anyone interested in how Brexit unfolded for Britain's most important economic movers and shakers.
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To my family – this is actually what I do
To Mark – thank you for being my rock
To my Cicero Group colleagues – this is your story
CONTENTS
PREFACE
In late June 2018 I was attempting to enjoy a peaceful weekend away from Brexit and the business of lobbying – which is my business – but instead I awoke to blaring headlines about the latest zesty soundbite from the then Foreign Secretary. He had been reported by the Daily Telegraph as railing against business and its lobbying efforts to secure a good deal with the EU. He was said to have snorted: ‘Fuck business,’ in an off-the-cuff remark to a diplomat who decided to ring up the papers and decry the comment.1
I don’t like expletives at the best of times, I don’t like using them myself and I especially don’t like Cabinet ministers using them to depict their attitude towards business and wealth creators – but I felt the title of this book wrote itself! Expletives appear to be the noms du jour – they cut through the imagination and serve up headlines in the current age of populism where ‘plaster may fall off the ceiling’ on to the lexicon of politics. I agonised about putting them on the front cover of this book. But I want them to arrest the senses. Something has gone badly wrong in our discourse.
Those two words summed up the disconnect between our political leaders and our leading businessmen and women, which has been growing for years. It wasn’t just the sentiments of our new Prime Minister but an attitude which is widely held.
I waited to hear a retraction or denial from his entourage, but I waited in vain. So, I emailed the chairman of one of the UK’s biggest FTSE 100 companies and also one of the leading business trade bodies and said I thought a clear response was needed. They agreed.
I then got in touch with Henry Zeffman at The Times. He asked for a Red Box daily briefing comment as soon as possible. ‘If it’s punchy enough, it will make a news story,’ said Henry. I told him: ‘Don’t worry – it will be.’
But the outburst provoked wider thoughts. What had gone wrong in the relationship between business and politics? As someone who is a passionate advocate of the need for policymakers and businesspeople to work together for a common good, I believe we have been living through the worst of times. The financial crisis over a decade ago eroded trust between our politicians and business folk, and events since have only served to make things a lot worse.
Of course, it’s true that not every business leader opposed Brexit. Far from it. Many have been strong proponents of the idea. In this book I will talk to both sides of the argument. I backed Remain but have been on record many times to say our country needs to move on and make the best of the result of the 2016 referendum. We can’t keep going around in circles. Far from being a ‘Remoaner’, I have worked constantly in the past three years to try to improve the dialogue between business and politicians.
Since the referendum, most business leaders have become resigned to it and want to break into a new economic and political cycle. They have not signed up to endless referendums. But everyone – leaders of both large and small entities, and including myself – wanted a positive ‘deal’ with the EU to secure a transition towards the ‘new world’ outside the union. When the blog site BrexitCentral launched in September 2016, I was one of its first contributors and found myself compelled to indicate that, while I had backed Remain, I was also a democrat and that we needed to leave the EU in a way that created economic opportunity not damage.
Three years after the referendum, it has been very difficult to review those words today. Opportunities have been lost and the country appears more divided than ever.
As head of the UK’s biggest independent lobbying company, Cicero Group, it’s my job to translate politics for businesspeople, as well as the other way around. It has given me a ringside seat on our politics, sitting alongside many of the most important businesses in our country. Often those businesses are foreign-owned, by people who view our politics from afar while investing billions in jobs and infrastructure in the UK and who need more translation than most. Many of them remain utterly dumbfounded by the disconnect between politics and business.
Recently I spent an entire day with a Swiss national who has become a leading CEO of a major UK business charting the breakdown in relations. He was perplexed by the UK political situation and knew just how tough negotiations with the EU had been for Switzerland in recent times. My history lesson to the Swiss CEO began in the late 1960s, when I was born, when Enoch Powell started his fight against globalising trends with his ‘Rivers of Blood’ intervention in 1968, which was to poison Tory thinking for years to come. It set in train two clearly distinct schools of thought within the governing Conservative Party: one open to markets and internationalism; the other deeply sceptical of change and global influences.
I will admit that this book has been cathartic for me. Through the maelstrom of events in the past few years it aims to unpack what’s gone wrong by analysing the critical events leading up to the Brexit referendum and its aftermath. Unashamedly, it looks at the relationship in particular between the City and our politicians, for it is the City where I have spent most of my time during my career, firstly as a financial journalist and later as lobbyist. The discussions I have had during my career – the meetings between finance and politics that I have sat in; the understanding that I gained – have all shaped my thinking.
This book also draws on my thirty-five years as a member of the Conservative Party and looks at the relationship between the Tories (which have always been viewed as the ‘natural party of business’) and commerce – an alliance which became eroded through the thirteen years of Labour government under Blair and Brown.
The book takes us through the coalition to the ‘dry run’ for Brexit in the Scottish independence poll in 2014 and goes on to look in some depth at the EU referendum and its aftermath, including the travails of the May administration and its wary relations with business. I recall personal stories of friendships on all sides of politics and enterprise, and of the view from my ringside seat with business leaders, the UK’s main regulators and the political decision makers and their advisers. It ends just at the time when Boris Johnson – the man whose quote gave the book its name – has been revealed as the man who will be attempting to steer us through the next stages in the Brexit saga.
I come to the conclusion that so much has been ‘lost in translation’ between the political class and our wealth creators that many on both sides don’t really understand each other any more – and perhaps don’t want to. However, a new chapter has opened in British politics with a new Prime Minister. I have a genuine hope that things can only get better. Perhaps the relationship with business and politics can be rebooted – or, even better, remade.
From a semi-autobiographical perspective, this book offers a peek into the world of business engagement with the political class. It is built upon my direct experiences over the past decade and more, alongside new and exclusive interviews for this book carried out with some of the country’s leading economic and political players as the high drama of the Brexit endgame unfolded in the spring and summer of 2019.
This book is not intended to be an academic ‘tome’ or a political philosophy textbook but an easily readable account of the period which lifts the lid on the relationship between business and politics right now. It does not attempt to offer a political treatise or make policy conclusions, but I hope to tell the story of how business and politics have grown apart.
Our wonderful team at Cicero Group has been an inspiration during this period, attempting to halve the divide between the political class and our major economic players. We have had many successes along the way, but I stop writing this book at a time when it has never been more important to try to rekindle the relationships once again.
I never thought I would write a book, but I felt compelled to do so. All the mistakes in this effort are entirely mine, but I could not have completed this project without my brilliant researcher and Cicero colleague Omar Rana and my long-standing support and personal assistant Kerensa Grant. To them, I offer my enduring thanks. The team at my publisher Biteback, led by James Stephens and my fantastic editor Olivia Beattie, and her colleagues Ellen Heaney and Suzanne Sangster, have made this project a personal joy – and helped make the words better than I ever could myself.
None of my work would be possible without the love, support and guidance of my husband Mark Twigg and my parents, to whom this book is partly dedicated.
From all these thoughts and experiences, I just hope there are lessons to be learned for both sides. This book attempts to draw the history of the business of Brexit.
1 James Crisp, Peter Foster and Gordon Rayner, ‘EU diplomats shocked by Boris’s “four-letter reply” to business concerns about Brexit’, Daily Telegraph, 23 June 2018.
1
PARTY GAMES
For most of my adult life – certainly until the past decade – the Tory Party prided itself on being the party of business. For large and small business, and domestic and international firms, you could always depend on the centre right in Britain to be better disposed to the wealth creators, whoever they were. However, over the course of the past few years the stable relationship between the Conservative Party and business has steadily broken down, with the EU referendum of 2016 unleashing an even faster decline in those relations for many business leaders.
The Thatcher government told an intensely pro-enterprise story. Most business leaders warmed to Maggie’s desire to unleash capitalism, seen in everything from her major reforms to the City to opening up the UK economy towards competitive forces. The door of No. 10 was open to business, and unashamedly so; business felt it had a place at the table. Of course, some history books of the 1980s would suggest that those same competitive forces unleashed economic effects that led to social division, creating the long-term conditions necessary for the ‘howl’ against traditional politics that the Brexit referendum represented.
During John Major’s administration, his Chancellor Ken Clarke’s concern was to bring the economy back from the brink of the ERM crisis in 1992. At that time, you could always find a friendly face leaning in towards businesspeople in the form of the Tory Party, who would remain in power until their crushing defeat in 1997 to Blair.
Let’s be honest, that friendly smile was often predicated on the need for the Conservatives to bankroll themselves by contributions from captains of industry while Labour looked to their union barons – although that may be a little unfair. Those captains were motivated by pro-enterprise policies that – most of the time – Labour could not (or would not) meet.
But our more recent history has upended all that. Probably the most striking impact on this landscape was the arrival of Tony Blair as Labour leader in 1994. His repudiation of the long-standing Clause IV mantra of state ownership as one of the earliest acts of his leadership in April 1995, combined with the Tories’ deep unpopularity among the broader electorate in the late 1990s, changed the zeitgeist.
Tony Blair, Gordon Brown, Peter Mandelson and Alistair Darling bounced around a ‘rubber chicken’ circuit of corporate events to woo business suitors. It worked. Businesses sensed that the Tories were going out of power. They were tired and their reputation for economic competence – in my view, still the primary driver of politics – was shot. From Richard Branson to the private equity magnate Ronald Cohen, many wealth creators supported Blair and Brown in their droves and partied till dawn at New Labour’s triumphant victory celebration at Royal Festival Hall in May 1997, ushering in the longest period of Labour government ever. Of course, everyone likes a winner, and with its most pro-business agenda ever New Labour scooped up support that was to abandon the Tories for two more electoral ‘waves’.
Years later, on the night of 23 June 2016, I was to be at the Royal Festival Hall myself for the Remain ‘victory’ celebrations. By 1 a.m., however, when the voters of Sunderland opined on our destiny, there was not much to celebrate. New Labour types mingled with the Cameroon class. Of course, that was precisely the problem for the ‘elites’, and the Brexit referendum showed it up. A new zeitgeist had emerged in our politics. Margaret Thatcher’s blue-collar Tory vote, which economically and politically had morphed into New Labour’s ‘Mondeo man’, was now exemplified by the workers of Nissan in Sunderland. Despite being told by all the ‘expert’ economic analysis that leaving the EU might put jobs at risk, they had voted Out. ‘Take back control’ – unsupported by any of the mainstream parties and major business leaders – had done its job. Identity trumped economics.
For most of the ten years from 1997 until the financial crash, New Labour continued to court business. Mandelson boasted that he had no problem with businesspeople becoming ‘filthy rich’. New Labour pursued a pro-enterprise ethos and, in the end, tax-lowering policies for business. London became a magnet for global finance and Labour Chancellor Gordon Brown didn’t even blush when he opened the new European headquarters of Goldman Sachs in the heart of the City of London. With some strange irony, Goldman’s took over the former Daily Telegraph building in Fleet Street; what a metaphor for the change in sentiment. There was no doubting that it gave Brown a spring in his step and a glint in his eye.
For the Tories, over the long years while Labour kept winning elections with massive majorities, the sense that a ‘global corporate elite’ had abandoned them continued to grow, festering even among many Tory activists. On top of this, big business had started to abandon direct engagement with the Conservatives themselves. I remember attending the Conservative conference in my day job as a lobbyist in 2003. OK, I admit I have been attending Tory conferences since the infamous 1984 Brighton bombing, when I was barely sixteen, but the 2003 event was perhaps the nadir of Tory fortunes, with Iain Duncan Smith receiving around eighteen rather manically organised standing ovations to show to the watching nation how the faithful loved the ‘dear leader’. The conference had the look of a small sect who had gathered to fanatically applaud a most ill-suited political leader. It was fantasyland for most businesses; it was a fantasy for people in the hall, too. Within weeks, IDS was gone.
While the ‘quiet man’ declared he was ‘turning up the volume’, most businesspeople had not bothered to turn on their TVs to watch. The usual highly expensive, party coffer-filling trade exhibition stands from Britain’s major firms were nowhere to be seen. You could buy a fetching silk tie from a very nice chap running a small stand, or talk to the Conservative Trade Unionists at their stand – but where were the FTSE 100s queuing up to pay £35,000 for four days with the Tories? Nowhere to be seen.
Of course, as a lobbyist, I know that business always wants to flirt with power. Convincing the corporate elite to turn up at a party conference with a party that was – at that time – almost seven years away from being back in power may not be a good use of resources and time.
But the Tories noticed. The thousands of Tory members who did turn up found themselves in a new kind of bubble – one that was further and further removed from that corporate elite.
Like a divorce in which both sides have stopped talking to each other and are only communicating through third parties, the mistrust and lack of understanding simply grew. It would take another general election and a global financial crisis to change things.
Many Tories were and remain brilliant entrepreneurs, lots of whom run small and medium-sized enterprises (SMEs). It’s what makes them Conservatives. However, a sense of ‘them and us’ grew: the Tory entrepreneurs versus the New Labour corporatists, you might call it. At just that time – and I saw this as a lobbyist – the ‘corporates’ started to engage with and lobby directly with the EU on a truly massive scale. It was where the really big decisions were being taken for many of our major economic players, especially the City. Until even the early 2000s, when I launched my own entrepreneurial venture (a lobbying business working mainly with those corporates), most UK firms, unlike their French, German or Italian counterparts, had not really taken the idea of talking to the European Parliament or Commission seriously. While the UK had been part of the European Community since 1973, UK businesses, like our political class, had been reluctant Europeans.
The EU’s Lisbon Agenda in 2000 changed all that. Here was a plan to create a deep, integrated single market. At once the banks, pharmaceutical companies, insurers, tech firms, logistics business, food manufacturers and car makers embraced the feeling. They could see an opportunity to tap the EU market in a more seamless way and expand their reach. For many international firms who had located in the UK, being able to ‘passport’ their products and services into the EU was set to be a major growth opportunity.
By the first decade of the twenty-first century, Britain’s major businesses – and those who had located in the UK to passport into the EU – had exploited the ‘just-in-time’ nature of complicated pan-European supply chains. The City of London was becoming deeply interlinked with European business as the leading capital market of the EU. For example, Lufthansa and BMW chose London above other EU locations to raise capital.
The leaders of commerce felt more European than ever. And they also welcomed the Blair–Brown government’s embrace of open EU migration to drive forward their corporate ambitions and their bottom line. Europe was proving to be a major economic opportunity. For US business in particular, locating their EU hub in the UK made sense, as language and cultural kinship was a great starting point. London boomed as a result, but the gap between the capital and the rest of the country became a chasm.
Back in 2001, I had worked hard to get Ken Clarke elected as Conservative leader. It was Ken’s second attempt. Against all expectations and without a background in economics, he had been widely acknowledged as a brilliant Chancellor under Major, picking up the reins in 1993 following the disastrous ERM crisis the following year, and had gifted the spoils of a positive economic trajectory to his successor, Gordon Brown. Brown kept to Clarke’s fiscal targets for much of his own first term as Chancellor before opening up the spending taps.
The following story encapsulates the distance the Tory Party had travelled on Europe since the days of Ted Heath having a majority of Tory MPs and members enthusiastically in favour of European Community membership, or its applauding when Margaret Thatcher championed the Single European Act 1986, which laid the foundation for the single market. Ken’s problem in the party was his overt and unspinnable enthusiasm for the EU. I often reflect that in the 1970s and early 1980s, with his charisma, intellect and ability to connect with most people, he would probably have walked a leadership contest. But times were very different in Toryland. In some ways, Ken is like Boris. He speaks without spin, has the ability to connect with people outside politics and is known best by his first name. Of course, the similarity ends there. Boris better caught the mood of his party on the major issue of our times.
At his first attempt, during the 1997 Tory leadership election – the last one to be undertaken only by Conservative MPs, without a ballot of the membership at large – Ken Clarke gained 45 per cent of the vote to William Hague’s 55 per cent. When thinking back about Hague, you can’t help but feel he won the Tory leadership at precisely the wrong time. In 1997, Ken’s candidacy was about closing the gap with Labour. I believed that he could best Blair as a heavyweight at Prime Minister’s Questions and, of course, he would have roundly opposed the decision to go to war in Iraq. He would have given the Tories a clearer point of difference.
By 2001, when Hague was spent as leader after an election campaign trying to ‘save the pound’, the Tories were thrust into a fresh leadership election. I was at Ken’s side for much of the campaign, ferrying him to speak to Tory members across the country. By this time, Conservatives were redefining themselves from ‘members’ into ‘activists’. This definition was fundamental, as it signified a different kind of political engagement with the party, where the individual’s voice in politics becomes just as important as the viewpoint offered from the leadership. ‘Members’ had grown frustrated for decades, sat in their constituency associations, that the Westminster elite were not listening to them. Hague’s decision to change the Tory leadership rules meant that all party members would get a vote on their new leader for the first time. They were ‘activated’ in every sense. The party was transformed from the one I had known, with its deferential acquiescence to the leadership.
The 2001 leadership campaign was very hard work and it was to provide further understanding of the increasing EU scepticism within the party. Ken’s decision to share a pro-EU platform with the ‘hated’ Blair in October 1999 was continually brought up as a ‘traitorous’ event by members in meeting after meeting. But rather than keep quiet about his pro-EU views, Ken couldn’t be tempted away from his enthusiasm. It was the most infuriating yet joyous thing about him – his unspinnable qualities! He was and remains a politician that the media love because of exactly that approach.
In the middle of the 2001 leadership campaign, Newsnight organised the first ever TV debate between two contenders to become a party leader, to be chaired by Jeremy Vine. It seems amazing to think now that was the first ever televised leadership debate. I – along with Ken’s campaign manager, the forensic future Treasury Select Committee chair Andrew Tyrie MP (a self-described EU sceptic of the time), and communications chief Richard Chalk – prepared Ken for the debate in his enormous corner offices at Portcullis House above Westminster Tube, which had, given his seniority in the House, one of the best views of the river Thames in all of Westminster.
Ken didn’t keep the most orderly of offices, but he could lay his hands on everything with the help of his longstanding assistant Debbie Sugg. Sitting amid deep mounds of parliamentary papers piled up across his office on every spare flat surface, we told Ken to move the debate away from Europe; we would never, ever, beat Iain Duncan Smith with the Tory faithful in the country on that subject. We told Ken: ‘Talk about transport, health, education, the police or housing. Anything but Europe. You won’t win.’ He nodded and said: ‘Don’t worry – I’ve got it.’
So Richard, Ken and I got into the car and drove off to the former BBC TV Centre in Shepherd’s Bush, west London. Ken was greeted by the producer, and Richard and I were ushered into the Newsnight green room, which had been prepared for us as Ken’s team. IDS’s entourage had another room to use.
Like the teams behind prizefighters in this newest of political dramas, we were to remain in our own corners. The BBC had supplied a bottle of red wine for the guests, but the runner (the person who gets guests to the right place) indicated it might not be of the best quality. Richard and I waved Ken off to make-up and we both resolved not to touch a drop. We had endured a long week of campaigning, and another early start beckoned the next day, so we opted for the hot drinks on offer. Brewing a cup of tea, we sat back to watch the debate. The familiar Newsnight titles and music rolled. Jeremy Vine introduced the contenders. Ken looked to be in sparkling form with his trademark ‘twinkle’ in his eye. IDS – as ever – looked ill-suited to being on the telly.
After the initial verbal blows at each other, I could see Ken gesturing to Jeremy Vine. ‘Yes, Ken?’ said Jeremy, slightly unsure of the new format the BBC had unleashed on him. Ken smiled broadly. ‘I don’t think there’s anybody more Eurosceptic in the Conservative Party than Iain.’ Richard Chalk and I looked at each other and just knew the rest of the debate would be dominated by the issue of Europe. Richard and I shrugged and opened the screw-top bottle of BBC red. By the end of the 45-minute debate there was none left.
Ken lost the Tory leadership poll in 2001 under the new voting system by 39 per cent to IDS’s 61 per cent. By 2005, when Ken – the standard bearer for the pro-Europeans in the party – stood for a third time, he didn’t even make it to the final two. The gravitational pull of Euroscepticism had done its work.
In fact, in order to get elected as leader against his run-off opponent, the much more Eurosceptic David Davis, in 2005, David Cameron had to promise to take the Tories out of the centre-right grouping in the EU Parliament, the European People’s Party (EPP). It was that decision – a commitment made in 2005 that no one remembered by 2009 – that cut the Conservatives fully adrift from their own place at the heart of the European centre-right conversation. Of course, inside the Conservative Party, the argument was continually made that the EPP was fully in line with the ‘federalist’ project of the EU to achieve deeper economic and social integration. But that was never completely the case inside the EPP, and the desertion of the UK Conservatives served only to intensify that tendency. One Tory MP told me: ‘All we did was to cut ourselves off even more from the decision making of the EU’s biggest political grouping just as it was calling all the shots in the EU. It was crazy.’
Many businesses looked on mystified and bewildered that, just as they had begun playing an even greater part in Europe, the Conservatives continued to drift further away from it. By the late 2000s, some of the business folk who had abandoned the Tories in 1997 had started to drift back. They could see that Labour was tiring and in Cameron the Tories had a young, energetic leader. Early supporters, like City veteran Michael Spencer, also brought backers to the table again. Business scented that the Conservatives were coming back into power and wanted to get close again. But when they did re-engage, they found a very different grassroots party to the one which had left power in 1997. As a result, a very different and far more Eurosceptic group of candidates was set to get elected to Parliament in 2010.
The financial crash, which started with the unravelling of the sub-prime mortgage crisis, hastened more business back. Cameron’s easy style and his embrace of a social liberalism appealed to many of them. When Brown ‘bottled it’ and failed to call a general election in autumn 2007 before the financial crisis really hit home for most voters, Cameron and Osborne saw their chance. At the Tory conference that same year, Osborne unveiled a package of reforms slashing inheritance tax and capital gains which, by its very design, appealed to ordinary homeowners who had seen the value of their homes mushroom in the Brown ‘boom’ only to trap many of them and their older relatives in high taxation. At the same time, business owners could see a new pro-enterprise agenda set against a tiring Labour Party.
Watching the BBC Ten O’Clock News on Monday 1 October 2007 from my Blackpool hotel room (the best way to enjoy any conference and do some work at the same time), I saw the Tories’ new policies lead the bulletin, with a report from political editor Nick Robinson focusing on shadow Chancellor George Osborne’s conference speech for a full ten minutes. The Conservatives had not dominated the news agenda in this way since leaving power a decade earlier.
This was to be the last time one of the major parties was to go to Blackpool for its conference. Cameron had seized the Tory crown in Blackpool two years earlier with his electrifying ‘no-notes’ hustings speech. Unlike for IDS back in 2003, Blackpool had proved to be better for Cameron and Osborne’s fortunes – and their relationships with business. The Tories were back in earnest. The money followed. The lobbying of the Tory front bench intensified. Business flocked back to their annual conferences. It looked like Cameron would be in Downing Street by May 2010.
Business knew the Tories had moved into a deeply Eurosceptic place over the previous decade, but Cameron had promised them that his party would stop ‘banging on about Europe’. When in power, commerce thought he would be able to curtail the anti-EU sentiments. For a time, that was true. Following the 2010 election, when Cameron had to enter a coalition agreement with Nick Clegg – leader of the UK’s most EU-friendly party – most businesses thought the problem had gone away. Clegg would be the brake on the Tory Euroscepticism. And he was – but not for long.
2
THE ROAD TO BLOOMBERG
After the Blair and Brown years ended with the financial crash, business was very happy to see a Tory-led government back in power. The ‘natural party of government’ and of business seemed to have found its stride once again. The so-called socially liberal ‘corporate elite’ was also pretty pleased to see David Cameron enter into a deal with Nick Clegg’s Liberal Democrats. Clegg would provide a buffer against the Euroscepticism around the Cabinet table and on the green benches in Parliament.
Centrist politics is where most modern business leaders – many of them with their MBAs and business school gongs – had been. Maybe that’s where business always is; with one eye on its own ‘liberal’ education and life experience, and another on its customers, whom it doesn’t want to ‘offend’ in any way, it takes a middle-of-the-road approach. So the deal between Cameron and Clegg did not disappoint. The coalition agreement looked to focus on fiscal recovery from the crash alongside a series of policies which would drive social integration. It ruled out a massive upheaval in our relationship with the EU by barely mentioning it. On the issue of EU membership, there wasn’t even a debate at the top of British business. The consensus was clearly: ‘It’s a good thing,’ and most firms exploited the opportunities of the single market and open EU immigration to the max.
The modus operandi of the Cameron government was to open the door to business. The massive outreach that had taken place in opposition by Cameron and Osborne continued into government. Both knew that the Tories banging on about Europe for the previous decade had been one of the main reasons for business leaders to support New Labour. So, they set out to change the tune – and they used Nick Clegg as the perfect excuse to say to their own party and, privately, to business leaders: ‘Our coalition partners just won’t wear a referendum.’ This line was repeated again and again to business leaders. When, in May 2013, one of Cameron’s inner circle referred to UKIP supporters and the most Eurosceptic members of his own party as ‘swivel-eyed loons’, his reference was met with quiet nods from business. Of course – as I have already argued – most of the business elite didn’t spend time with the ‘loons’ to find out why they thought what they did about the EU. Business chiefs spent time with other business chiefs or with those at the very top of the political machine. Not with Tory constituency activists, nor with UKIP either.
On top of that, a whole bunch of new Tory MPs had been elected in 2010 who had moved the parliamentary party much further towards Euroscepticism. The previous decade had seen a hardening of attitudes against the EU among the ‘selectorate’ of Tory constituency associations that pick the candidates to run with a blue rosette. Candidly, this is the reason I never put myself forward as a candidate myself, despite my long association with Conservative politics. I just didn’t think my brand of Conservatism would pass the test of the selectorate.
In early 2010, before the election, the influential ConservativeHome website ran a conference in Westminster specifically designed to appeal to corporate lobbyists. The room was packed. The website’s creator, Tim Montgomerie, and his team provided an incisive ‘insider’ analysis of the likely make-up of the new Conservative parliamentary party, but I think most people in the room believed that Cameron as Prime Minister would push back against the Eurosceptics. As Montgomerie commented later, in 2011, when discussing the Eurosceptic members of the new intake of Tory MPs: ‘By sheer volume – accounting for half of the parliamentary party and two thirds of Tory backbenchers – they will pull Cameron towards more Thatcherite positions.’2
Despite the coalition promising to get on with reducing the deficit as its core priority, there was growing sentiment building for a vote on Britain’s membership of the EU. In 2011, the House of Commons rejected an EU referendum motion by a vote of 483 to 111. The vote had been provoked after a public petition received more than 100,000 votes. However, showing the growing tide of opinion in Conservative politics, the vote was the worst Conservative rebellion on Europe ever seen, with eighty-one backbench MPs voting against the government. John Major’s troubles with his Maastricht ‘bastards’ were as nothing compared to this outbreak. Most of them were indeed Eurosceptics, but there were one or two (likely the newly elected Robin Walker, who in the end campaigned for Remain in 2016 and also became the longest-standing DExEU minister under May) who just wanted to see the issue finally put to bed in a people’s vote.
To placate his Eurosceptic MPs, Prime Minister Cameron said that he supported the aims of fundamentally changing the UK’s relationship with the EU.
Like you, I want to see fundamental reform. Like you, I want to re-fashion our membership of the EU so that it better serves our nation’s interests. The time for reform is coming. That is the prize. Let us not be distracted from seizing it. I commend this statement to the House.3
Many in business shuddered. They had thought that Cameron had meant what he said about closing down the subject under his premiership. Despite his party’s EU obsession, he had promised this would not be an issue. They thought the civil service would help close the matter and fill ministers’ red boxes with other things to do. But from that point on Eurosceptic Conservative MPs’ approach to the Europe question would be to demand ever more reform in UK–EU relations, responding not just to their constituency associations but also to the growing drumbeat of Eurosceptic politics led by UKIP, which was eating away at Tory support. This challenge set an unfeasibly high bar for the Prime Minister to reach – one he would ultimately fail to achieve.
The day before the vote on the referendum motion, the Tory grassroots blog site ConservativeHome – now read as much by the lobby media and lobbyists as Tory Party members themselves – published polling figures which suggested that 72 per cent of Conservative members favoured a second referendum. Fired up with that level of support, former Cabinet minister John Redwood MP, the long-standing Eurosceptic, opined:
The heart of the Conservative Party is Eurosceptic. Last night more showed their heart. Many of the remaining Conservatives who voted No did so whilst … saying they wanted less EU government and wanted a referendum at some other time. The drum beat of the Conservative party is to renegotiate. It is to get a new relationship with Euroland. The party is united in this. It speaks for the overwhelming majority of the UK electorate.4
Foreseeing the debate in the Tory Party some five years later, when Cameron would return from Brussels with his EU referendum ‘deal’, James Forsyth, The Spectator’s political editor and perhaps the Cameron No. 10 machine’s closest confidant among the lobby, wrote:
This should be a wake-up call to David Cameron. He needs to develop a proper policy for repatriating powers from Brussels, change his style of party management, and reform the Whips office. This rebellion will encourage the hard-line Euro-sceptics to try again and again. They will reckon, rightly, that as the parliament goes on the number of potential rebels will grow. If they can get this number of rebels in year two of the parliament, imagine how many they’ll attract in 2014 when a whole bunch more MPs have been passed over for promotion. The idea that this vote has lanced the boil or dealt with the issue of Europe for the parliament is for the birds.5
Later that year, Cameron anticipated that he needed to show his Eurosceptic party he was serious about confronting the EU. In a high-stakes late-night drama in Brussels, he vetoed an EU-wide treaty amendment which was intended to provide a solution to the eurozone crisis. The change had been designed to keep the EU project on the road. Concocted in Brussels, it was portrayed as a way of showing EU-wide ‘solidarity’ – a much-used phrase which may have resonance in the corridors of power in Paris and Berlin but falls flat when conveyed to readers of the Daily Telegraph and the Daily Mail. The proposed amendment to the Lisbon Treaty would have enacted the following:
A cap of 0.5 per cent of GDP on countries’ annual structural deficits.‘Automatic consequences’ for countries in which the public deficit exceeds 3 per cent of GDP.Tighter fiscal rules to be enshrined in countries’ constitutions.A European Stability Mechanism (ESM) to be accelerated and brought into force in July 2012.A reassessment of the adequacy of the €500 billion limit for the ESM.The eurozone and other EU countries would be required to provide up to €200 billion to the IMF to help debt-stricken eurozone members.Cameron said:
We want the eurozone countries to come together and solve their problems. But we should only allow that to happen within the EU treaties if there are proper protections for the single market, for other key British interests. Without those safeguards it is better not to have a treaty within a treaty, but have those countries make their arrangements separately.6
The main reason for David Cameron’s veto was that it contained insufficient protections for the UK’s financial services industry. In public, the City was pleased that Cameron had gone in to bat for them, but in private, even my friends in the financial services sector could see that he had weakened the UK’s standing across the EU. This treaty change was an attempt to create more fiscal rectitude in the EU’s approach, and Cameron had blown it up. Right-of-centre EU leaders like Merkel were dumbfounded.
Speaking to me for this book, the chair of one of the UK’s biggest banks said:
