Читать книгу All Out War: The Full Story of How Brexit Sank Britain’s Political Class - Tim Shipman, Tim Shipman - Страница 12

It says much about David Cameron’s relationship with George Osborne that they kept a lid on it. The decision to hold a referendum on Britain’s membership of the European Union was the most important Cameron made as prime minister – and his closest political ally, friend and adviser opposed it. Not just a little bit, but profoundly and wholeheartedly – and yet the disagreement did not leak.

It was late May 2012, and Cameron was just back from a NATO summit in Chicago. In a pizza restaurant at O’Hare Airport on the way home he had called a council of war with Ed Llewellyn and William Hague, his chief of staff and his foreign secretary, and decided he had no choice but to go into the 2015 general election with a pledge to hold a nationwide vote on the UK’s relationship with the EU by the middle of the next Parliament.1 Just before he became prime minister, Cameron had remarked, ‘I don’t want Europe to define my premiership.’2 He had already discovered that was a forlorn hope.

‘The biggest advocate of the referendum was William Hague,’ a senior Downing Street official said. The foreign secretary told Cameron, ‘You need to do this. I got killed by Europe. A Tory leader needs to nail this once and for all.’

George Osborne did not agree at all. The idea that the chancellor was concerned about the prospect of a referendum became known later, but few have appreciated quite how serious was his opposition. Osborne did not just think a referendum was a bad idea, he thought it was a disastrous idea. In successive meetings he was ‘pretty hostile’ to pressing ahead because he feared the vote would be lost. He warned Cameron he was taking a major risk that several uncontrollable forces would combine in a referendum campaign: ‘anti-government sentiment, opportunism, genuine concern – and then you lose’. The picture Osborne painted was stark and prescient.

Strategically, Osborne saw three problems. The first was that the in/out question was an all-or-nothing proposition. This was not a referendum on integration or membership of the euro – Britain’s membership was on the line. There was no way back if it was lost. The second, he told Cameron, was that the campaign would ‘split the Conservative Party down the middle’. A senior Downing Street source recalled, ‘George’s view was that there’s a good chance we’ll lose, and it will destroy the Tory Party.’ Thirdly, the chancellor had what now seems a more parochial political concern, that with Labour’s Ed Balls and Ed Miliband making overtures to business, Tory support for a referendum would undermine business backing for the Conservatives in the run-up to the 2015 general election. A cabinet colleague said, ‘George’s view was, “Don’t allow your entire premiership to be held hostage to this.”’

Osborne’s plan on Europe was to do what they had done for seven years since 2005, and avoid talking about it. When forced to give firm commitments they would say, ‘No more integration, no bailouts,’ and then hold out the idea of securing some extra powers for the UK as and when the eurozone needed a new treaty change. ‘It’s not perfect, but I reckon it’s better than the alternative,’ he argued.

Given the gravity of the decision and its implications, this was the most important political disagreement Cameron and Osborne had during their six years in power. It is a testament to the strength of their political partnership and their friendship that it never became front-page news, as even minor spats between Tony Blair and Gordon Brown did. Osborne told friends, ‘My partnership with David Cameron has always been predicated on two things: one, he is the boss and I am number two. Second, that where we disagree, we disagree in private – I don’t flounce off or resign or anything like that.’ In the end Osborne could see the way the wind was blowing, and swallowed his doubts. A Downing Street aide said, ‘George is essentially a real pragmatist, so he understood that that’s where we’d end up.’ But the decision would eventually send Osborne over the top in a fight that would define his career, but which he had opposed from the start.

Cameron was a pragmatist too. In opposition, the most prominent portrait on his wall was of Harold Macmillan, the one-nation Tory who had tried to take Britain into what was then the Common Market, until France’s President Charles de Gaulle – the first and most disputatious in a long line of Gallic protagonists – said ‘Non!’ Most Conservative leaders wanted to be Winston Churchill. Most Tory Eurosceptics wanted David Cameron to be Margaret Thatcher, whose best-known sentence on European integration was ‘No, no, no.’ But Cameron wanted to be Macmillan, a common-sense healer of divisions and manager of the nation’s interests. Famously, when asked what was most dangerous for a politician, Macmillan had replied, ‘Events, dear boy, events.’ In his approach to Europe, David Cameron was never more like his hero. Temperamental incrementalism, a propensity to tactically manage rather than strategically plan, and a tendency to be driven by events would all define his response to the issue that now bookends his premiership.

At around ten minutes past eight on 23 January 2013 David Cameron took to the stage at the London head office of Bloomberg, the financial news service, and said to the expectant audience, ‘This morning I want to talk about the future of Europe.’ What followed was the most significant speech given by a British prime minister since Tony Blair made the case for the Iraq War. In its consequences for Britain, it was more far-reaching than that.

In bald, spare words, Cameron sought to confront the issue which more than any other had derailed the careers of Conservative leaders in his adult lifetime. In 1975, when the British public had last been asked its opinion about Europe, Cameron had been too young to vote, and the Tory Party had been broadly united in supporting membership of what was then the Common Market. Yet now, Cameron looked down the lens of the television-pool camera and said, ‘The next Conservative Manifesto in 2015 will ask for a mandate from the British people for a Conservative government to negotiate a new settlement with our European partners … and when we have negotiated that new settlement, we will give the British people a referendum with a very simple in or out choice. To stay in the EU on these new terms; or come out altogether.’ Cameron made clear that he personally wanted an outcome ‘that keeps us in’. He concluded by saying, ‘It is time to settle this European question in British politics.’

The speech marked the end of a long, hard road for David Cameron which began with his speech to the 2006 party conference, less than a year after he won the Tory leadership, when he urged his parliamentary colleagues to stop ‘banging on about Europe’. Even at the time this was naïvely optimistic, since Cameron had already given ground to the Eurosceptics during the leadership election, matching a pledge from his Eurosceptic rival Liam Fox to take the Conservatives out of the European People’s Party (EPP), the main centre-right (but devoutly federalist) grouping in the European Parliament. The promise helped him beat both Fox and David Davis, the former Europe minister known to colleagues as ‘the Old Knuckleduster’. But in the capitals of Europe, leaving the EPP was Cameron’s ‘original sin’, proof that he was another British leader unwilling to play by the rules of the club. Eleven years later it would be a factor, albeit a minor one, in hampering his renegotiation of Britain’s relationship with Brussels. At home it was evidence for the Eurosceptics that, if they pushed him hard enough, he would retreat.

Cameron was no EU enthusiast. When seeking selection as the Tory candidate for Witney, the Oxfordshire seat he was to win in 2001, he characterised his views as ‘no to the single currency, no to further transfer of powers from Westminster to Brussels, and yes to renegotiation of areas like Fish where the EU has been a disaster for the UK’, before adding for good measure, ‘If that is being a Europhile, then I’m a banana.’3 But for the Eurosceptics his heart was not in it. To Cameron, Europe was ‘the E word’. In 2006 he described members of the UK Independence Party as ‘a bunch of fruitcakes and loonies and closet racists’. That not only made a mortal enemy of Ukip’s leader Nigel Farage, but contributed to a belief among the Palaeosceptic – a term I hope describes their longevity without implying that they were old-fashioned – old guard (not unfounded) that he viewed them the same way. Daniel Hannan, the Conservative MEP who was the intellectual godfather of what would become the Leave campaign, first met Cameron when he was running the Conservative Research Department in the early 1990s. ‘I think his view then was that Eurosceptics were like the ancient mariner,’ Hannan said. ‘They were disagreeable bores who would hold you with their skinny hand. I think he approached the European issue through the prism of party management. I don’t think he ever sat down and did a cost–benefit analysis of EU membership. He began from the position, probably true in the 1990s, that a lot of the Eurosceptics were quite difficult and obsessive people.’ Whatever concessions were extracted, the Palaeosceptics came back for more. This was the era when, as the columnist Danny Finkelstein so memorably put it, the Eurosceptics ‘wouldn’t take “Yes” for an answer’.

The issue that calcified Eurosceptic suspicion of Cameron was his ‘cast-iron guarantee’ in September 2007 that he would hold a referendum on the Lisbon Treaty, which greatly deepened EU integration. Once the treaty was ratified in every EU country, including by Gordon Brown’s Labour government, Cameron ditched the pledge, arguing that a referendum was pointless. He sought to placate the Eurosceptics with a speech in November 2009 announcing a ‘referendum lock’, ensuring a vote on any future European treaty ‘that transferred areas of power or competences’ from Britain to Brussels. It was a poor substitute for the in/out vote the sceptics craved. More importantly, as the then Tory MP Douglas Carswell observed, Cameron’s original promise, ‘although we reneged on it, established the legitimacy of a referendum’.

Even pro-Europeans look back on Cameron’s decision with regret, since it meant that if there was to be a referendum in future, it would be an all-or-nothing proposition. Tory MP Alistair Burt said, ‘I argued that the first chance the British people were going to get to vote on the EU they’d vote “No”, no matter what the question was. I would far rather have had a question on a constitutional issue than “In” or “Out”.’

With hindsight, the moment a referendum became inevitable occurred in October 2011. When more than 100,000 members of the public signed a petition demanding a nationwide vote, Conservative backbencher David Nuttall – whose name was regarded by Downing Street as eloquently descriptive – proposed a Commons motion calling for a referendum. Instead of letting the sceptics sound off in a vote that was not binding, Cameron unwisely turned the showdown into a trial of strength, ordering his backbenchers to vote it down. ‘We cannot lie down on this,’ he told his closest aides.4 It is understandable that he felt like imposing some order. By that point, seventeen months into the coalition government, Cameron had already endured twenty-two backbench rebellions on Europe, involving a total of sixty MPs.5 He ordered an ‘industrial-scale operation’ to rein in the sceptics.6 Word spread that anyone voting for the motion would be barred from ministerial office for four years, or even face deselection. Despite the threats, and to Cameron’s consternation, eighty-one Conservatives backed the motion, the biggest rebellion on Europe since the Second World War. At John Major’s worst moment during the passage of the Maastricht Bill in 1993 only forty-one Tory MPs had defied the whip. Without the heavy-handed whipping the rebel leaders could have mustered 150 votes against their own government. As young MPs, Cameron and Osborne had seen loyalty as the currency of promotion; now they were confronted by people who put principle first.

One of Cameron’s closest aides said, ‘For me the pivotal moment was the eighty-one rebellion. It was clear after that that the parliamentary party would not stand for anything but a referendum by the next election. I think the PM knew instinctively that was where he was going to end up.’ It would be another nine months before Cameron accepted that logic, and fifteen before he did anything about it.

Cameron may not have wished to focus on Europe, but the eurozone crisis ensured that he had no choice. The Greek economy plunged into chaos shortly after the ‘referendum lock’ speech, and attempts to prevent an ‘Acropolis Now’ collapse preoccupied the EU into 2012.

Two months after the Tories’ Commons rebellion, in December 2011, the nations in the eurozone demanded a Fiscal Compact Treaty to prop up their ailing currency. Cameron and Osborne sought protections for the City of London. In a strategy which he was to test to destruction, Cameron focused his negotiating efforts on Angela Merkel. They had a good relationship. The German chancellor had been to Chequers in 2010, when they kicked back watching episodes of Midsomer Murders. ‘Just think, all this could have been yours,’ Cameron had joked.7 After a lunch in Berlin, Cameron thought she was on-side, but she then went behind his back to do a deal with the French. A senior diplomat said, ‘We didn’t know what was happening, not even through covert channels. We were completely screwed over.’ Cameron, realising he had been ambushed, called to warn Merkel, ‘I’ll have to veto.’ She replied, ‘In that case I’ll have to do it without you.’8 On the evening of 8 December Cameron went alone into the summit room with twenty-six other leaders and found himself in a minority of one. At 4 a.m. he walked out.9

‘We renamed it a veto to claim it was a veto,’ one Downing Street aide recalled. Cameron’s refusal vetoed nothing. The other twenty-six nations simply signed a separate treaty outside the EU apparatus. But Cameron was lauded at home as a latterday Thatcher, standing magnificently alone against the tide of integration. A Number 10 source recalled, ‘Firstly, he never thought he was going to veto it. It was initially, “Oh fuck, what have we done?” Then the polls went up. It was a completely accidental triumph. The Foreign Office thought it was the end of the world.’ The veto affair showed all too clearly that, despite her warm words, Merkel would not deliver for Cameron if she thought Germany’s national interest and the good of the EU lay elsewhere. It was a lesson Cameron would have done well to learn there and then.

Cameron’s honeymoon with the sceptics was brief. In June 2012, with Downing Street on the back foot over George Osborne’s so-called ‘omnishambles’ budget, one hundred Tory MPs signed a letter, penned by Basildon MP John Baron, calling for legislation guaranteeing a referendum in the next Parliament. Two days later, at a summit in Brussels, Cameron rejected that plan. The Eurosceptics went into meltdown. ‘The PM and the chancellor looked like they were seriously losing authority over the party,’ a Downing Street source remembered.

In a bid to clean up the mess, Cameron wrote an article for the Daily Telegraph saying he was ‘not against referendums on Europe’, but that the time would not be right for an ‘in/out’ vote until Britain had ‘define[d] with more clarity where we would like to get to’.10 It was the first public expression of his desire for a new deal. Once again he had edged closer to a destination he did not desire, in order to placate people whose support he did not really want. Once again he had neither settled the issue to the satisfaction of his critics, nor properly confronted them. When Cameron told Nick Clegg about the article, the deputy prime minister told him he was ‘crazy’ to think he could buy off his critics. ‘I have to do this,’ Cameron insisted. ‘It is a party management issue.’11 Viewed after the political bloodbath that followed, the notion that holding a referendum might calm Tory divisions was farcically naïve.

It was the rise of the UK Independence Party (Ukip), and growing concern about immigration, that finally forced Cameron’s hand. The eurozone crisis sent unemployment soaring, inspiring hundreds of thousands of people to flock to Britain to find work. Cameron’s pledge to reduce net annual immigration to the ‘tens of thousands’ a year became untenable. The pressure this brought to bear on public services, coupled with the growing public view that yet another politician’s promise was worthless, was deftly exploited by the blokeish but charismatic Ukip leader Nigel Farage, whose ‘people’s army’ combined traditional EU constitutionalist pub bores with an anti-establishment grassroots movement that tapped into broader discontent with the Westminster elite. With the Liberal Democrats as partners in the coalition government, Farage was able to hoover up protest votes which traditionally went to the third party. By the autumn of 2012 Ukip were the third party, consistently above the Lib Dems in the polls. In November Ukip grabbed second place in two by-elections in Rotherham and Middlesbrough. Cameron decided he had to act. He would have to enter the 2015 general election campaign with a pledge to hold a referendum.

Andrew Cooper, the pollster who was a key figure in driving Tory modernisation, said, ‘Ukip, who nearly won the European elections in 2009, were very likely to win the European elections in 2014. We’d have been in meltdown and ended up being forced into a referendum commitment.’ He told Cameron, ‘Since it is a question of when, not if, let’s do it now, let’s do it calmly and set out a proper argument.’ The prime minister saw the logic in this. As another member of his inner circle put it, ‘There is an element where David thinks when the big judgement call needs to be made, “Put your balls on the line, let’s do it.”’

Once again, George Osborne was the most outspoken opponent of the idea. His father-in-law David Howell – a cabinet minister under Margaret Thatcher – told a Conservative activist that the chancellor ‘implored’ Cameron not to hold a referendum. Once again his objections were dismissed. In secret, Ed Llewellyn, the chief of staff in Downing Street, began work on the most important speech of Cameron’s career.

By now some of Cameron’s closest allies, including Steve Hilton and Oliver Letwin, were flirting with leaving the EU altogether. Most significantly, at the party conference in October, education secretary Michael Gove told journalists from the Mail on Sunday that on the current terms of membership he would vote to leave. Despite his resolute Euroscepticism, Gove, like Osborne, was a firm opponent of a referendum. He had two concerns. Even at this early stage he was worried that he ‘would have to stand on a different side to the prime minister’, which would be ‘painful’. He also felt that Cameron had not worked out what his strategy was, and what Britain wanted out of Europe. Gove saw a pattern where the prime minister sought confrontation with the sceptics, told them ‘You’re all lunatics,’ refused their demands, and then ‘caved in’. A source close to Gove said, ‘Throughout the time, Michael thought this whole thing was a recipe for disaster. What we’re not doing is thinking through what Britain will be outside the EU, we’re adopting a bunch of tactical strategies to stave off either Ukip’s growth or our backbench problems.’

Gove went so far as to put these concerns in writing, emailing Cameron before the speech to tell him, ‘You don’t need to do this, you don’t need to offer a referendum.’

‘Don’t worry, I know what I’m doing,’ came the breezy reply.

Angela Merkel’s views were assiduously sought before the big speech. A Downing Street aide recalled, ‘We were paranoid about this thing going off completely half-cocked, with Merkel and [French President François] Hollande going out the next day to say, “This is a pile of absolute shit, Britain is going to get nothing from this.” A lot of work was going into at least making sure they didn’t blow the idea of negotiations out of the water.’

The prime minister gave Merkel dinner in Downing Street on 7 November, at which he explained, ‘I’ve supported our membership of the EU all my political life, but I am worried that if I don’t get the reform objectives I’m setting out, I won’t be able to keep Britain in.’12 Merkel called Britain Europe’s ‘problem child’,13 and urged him to ‘couch the speech in an argument about Europe having to change’ – in other words, a better deal for everyone. A Number 10 official recalled, ‘The strategy was always: schmooze the pants off Merkel, get that locked down and then everyone else will fall in behind. It was damage limitation with the French. You got the sense that she was never wholeheartedly embracing it. The best you could hope for was that she could accept the political argument for him doing it and not stand in the way.’

After several delays, the speech finally went ahead on 23 January. Cameron actually struck a notably pro-European tone, praising the EU for helping to raise Europe from the grip of ‘war and tyranny’. But it was an argument couched in Macmillanite practicalities: ‘For us, the European Union is a means to an end – prosperity, stability, the anchor of freedom and democracy both within Europe and beyond her shores – not an end in itself.’ He warned, ‘democratic consent for the EU in Britain is now wafer-thin’.

Cameron spelt out his demands: more competitiveness and the completion of the single market, an end to ‘one size fits all’ integration. He said this would mean Britain abandoning the goal of ‘ever closer union’ written into the Treaty of Rome. He added, ‘Power must be able to flow back to member states, not just away from them,’ and called for ‘a bigger and more significant role for national parliaments’. Finally, he demanded new rules that ‘work fairly for those inside [the euro] and out’. Heeding Merkel’s advice on how to pitch his call for reform, he said, ‘I am not a British isolationist. I don’t just want a better deal for Britain, I want a better deal for Europe too.’

Largely forgotten afterwards, Cameron predicted that ‘in the next few years the EU will need to agree on Treaty change’, gifting him an occasion when Britain could get its new grand bargain. But when Germany cooled to that idea, his leverage was removed. Also forgotten, given how central it became to his deal, the speech included not one reference to immigration or migration.

Coming to the crux of the matter, he declared, ‘I am in favour of a referendum. I believe in confronting this issue – shaping it, leading the debate, not simply hoping a difficult situation will go away.’ Those looking back at the speech after the referendum would have been amused to find this entreaty: ‘It will be a decision we will have to take with cool heads. Proponents of both sides of the argument will need to avoid exaggerating their claims.’ Nevertheless, Cameron vowed that if he got the deal he wanted, ‘I will campaign for it with all my heart and soul’.

The speech was met with a rapturous reception at home, where the sceptics seized on one key phrase: ‘We need fundamental, far-reaching change.’ When he entered the Commons chamber for PMQs later that morning he was met with a barrage of cheers. The Eurosceptics had got what they wanted.

Speaking in 2016, a Cameron aide said his main error was to lay out ‘red lines’, but not to use the speech to level with voters and his MPs that it was a starting point for discussion with Brussels, rather than an inviolable text. ‘The problem was that we didn’t make arguments like “We’re going to have to compromise,”’ a senior figure in Number 10 said. ‘It was a huge error.’ The Palaeosceptics who rejoiced at the speech were like Biblical or Koranic literalists – they planned to hold Cameron to every word of it. Bernard Jenkin seized on the comment that national parliaments were ‘the true source of real democratic legitimacy and accountability in the EU’, and warned Cameron, ‘You’ve really got to deliver on this otherwise the Conservative Party will tear itself to pieces.’ Cameron’s response was to wave his hand dismissively and say, ‘When the referendum comes the party will split, and that’ll just have to be that.’ To Jenkin the prime minister had the air of a man who had made the promise of a referendum that he never thought he would actually have to deliver, since by now few thought the Conservatives could win an overall majority at the 2015 general election and govern without the Lib Dems, who may have sought to veto any referendum. Iain Duncan Smith, the work and pensions secretary, said, ‘I have no doubt that the thinking in Downing Street … was that the outcome was likely to be a coalition government and … that this referendum would be traded away.’14

For once, though, Cameron had gone far enough to satisfy the bulk of backbench opinion. He had adopted a position sufficiently robust to prevent the party disintegrating before the general election. For almost two years the Tory troublemakers, to adopt the classic dictum, would direct most of their piss outside the tent, and when they seemed in danger of misplacing the urinal – introducing a Private Member’s Bill to hold a referendum – Cameron ended up adopting the Bill. But he was soon to discover the accuracy of one minister’s theory of parliamentary urinators: ‘Westminster is not divided into people inside the tent pissing out and people outside the tent pissing in, it is divided into people who piss and people who don’t. It doesn’t matter where the pissers stand, the piss always gets into the tent eventually.’ As a description of what Cameron’s Bloomberg speech set in train, it was hard to top.

The key question from this period is: could the referendum have been avoided, and if it could not, did Cameron have to offer an in/out vote by the end of 2017? When the cabinet was informed of the decision it horrified the veteran Europhile Ken Clarke: ‘I was not consulted. I read about it in the newspaper. We had a row about it, but it was a done deal. I think it was the most reckless and irresponsible decision.’15 Yet even a dyed-in-the-wool Europhile like Alistair Burt gave Cameron the benefit of the doubt: ‘I don’t blame the prime minister for calling the referendum, because you can’t keep the people hostage, and it was important, not just for party management but important for the country, that the people had this vote.’ There were practical concerns too. David Lidington, Cameron’s Europe minister, said, ‘Had he not promised the referendum, I think it would have been hugely difficult to win the 2015 general election at all.’

Cameron’s aides believed failure to announce a referendum would have led to a leadership challenge when Ukip won the European elections in 2014. ‘The idea that the PM was going to survive and face down his party is for the birds. We would have had a new leader coming in saying “I’m going to call a referendum,” and probably saying they were going to back Brexit,’ one said. The pollster Andrew Cooper agreed: ‘If he’d taken the party on, I think he would have lost. Ukip was on the rise, the party was in revolt.’

Yet one of Cameron’s closest aides believed that he may have stepped back from the brink if the Bloomberg speech had come after the Scottish referendum in September 2014, which uncorked the uncontrollable passions about which George Osborne had warned: ‘After the Scottish referendum experience we realised you’re unleashing things you can’t control. That’s the one thing I’d say would have changed our mind.’ By the time Tory high command collectively came to recognise the risks, it was too late.

If Cameron had to offer a referendum, he did not have to offer an in/out referendum. A group of Eurosceptics – Bill Cash, Bernard Jenkin and John Redwood – went to see the prime minister before the Bloomberg speech to suggest he lance the boil by holding a ‘mandate referendum’ with the question ‘Do you agree that the United Kingdom should establish a new relationship with our European partners based on trade and cooperation?’ Cameron was at first interested in the idea, but later asked, ‘Who’s going to oppose that?’ Jenkin replied, ‘Exactly!’ But Cameron saw the plan as potentially dangerous. He did not believe Britain’s links to the EU should be confined to trade. Jenkin said, ‘That referendum question, if approved, would have been completely incompatible with our present terms of membership. So he shied away from that and went for the in/out referendum.’

There were other options. Cameron could have devised his own mandate referendum, giving him licence to secure a deal when a treaty was next agreed. He could have defied the Liberal Democrats and begun a process of renegotiation with Merkel over a number of years, blaming his coalition partners for the lack of an immediate vote. He certainly did not have to say that there would be a referendum before the end of 2017. He could even have attempted to face down his party and confront their arguments. But in truth he had set himself on the path of tactical retreat from the moment he agreed to pull the Tories out of the EPP during his leadership campaign.

In calling for ‘fundamental, far-reaching change’ of Britain’s relationship with the EU, the Bloomberg speech raised expectations that would be very difficult to meet. To get what he wanted from the other member states and keep Britain in Europe, Cameron had to persuade them that he was prepared to leave, a posture that was regarded as incredible by the sceptics at home, who demanded that he threaten to lead the UK out, while telling the world that he was only bluffing. As Tony Blair was to remark, ‘David Cameron’s strategy is a bit like the guy in Blazing Saddles who says, “Put your hands up or I’ll blow my brains out!”’16

Rising immigration, fuelling the rise of Ukip, had led to Cameron’s referendum pledge. By mid-2014 it was clear that measures to curb immigration would also have to be the centrepiece of his new deal with Brussels. According to the official statistics, net migration to the UK was 177,000 in 2012, rose to 209,000 in 2013, before soaring to 318,000 in 2014. Those figures would have been politically damaging in their own right, but juxtaposed with Cameron’s long-standing pledge to limit net migration to the ‘tens of thousands’ they were explosive. As the figures rose, so too did support for Ukip. ‘The thing which turbocharged Europe was the massive jump in EU migration,’ a Cameron confidant said. ‘That’s what turned it from a niche Tory issue into a massive popular issue. The biggest problem with renegotiation was that it was absolutely clear we needed to control migration.’

The prime minister recognised the dangers, and used his speech to the Conservative Party conference in October 2014 to deliver a bold pledge: ‘Britain, I know you want this sorted so I will go to Brussels, I will not take no for an answer and – when it comes to free movement – I will get what Britain needs.’ The pledge was more than ambitious; as expectation-management went it was reckless, as Cameron would discover. Will Straw, who was to end up running the Remain campaign, said, ‘He promised his grassroots more than he was ever able to achieve.’

The first effort to tackle the issue came a month later, in November 2014, when Cameron made a speech at JCB, the construction-vehicle manufacturer owned by his friend Anthony Bamford. The preparations for that speech led to another psychodrama with Merkel, serious clashes between Cameron’s political aides and the civil service, a showdown with two of his most senior ministers, and did more to shape the final renegotiation deal even than the Bloomberg speech.

At heart, Cameron had two options: limit the number of EU migrants coming to Britain, or reduce the pull factors by cutting the benefits to which they were entitled. Iain Duncan Smith, the work and pensions secretary, and Michael Gove, by now the chief whip, pushed for quotas on the number of EU arrivals. The problem was that this flew in the face of the fundamental EU principle of the free movement of people. On 19 October the Sunday Times revealed that Cameron was considering ‘an annual cap on the number of National Insurance numbers given to low-skilled immigrants from Europe’. Cameron blamed Gove for the leak. But at an EU summit later the same week, Merkel told the paper’s Brussels correspondent Bojan Pancevski, ‘Germany will not tamper with the fundamental principles of free movement in the EU,’ words that killed the idea stone dead when they were splashed on the front page.17 In a confrontation with Cameron in the British delegation’s room, Cameron explained that he needed a quota system or an emergency brake on numbers: ‘If I could deliver clear demonstration of grip with controls even if those were for a temporary period, I think I can crack this. But otherwise this is becoming an unsustainable position.’ But Merkel told the prime minister, ‘No, I’d never agree with that. No. No. No. No way. Never, David.’ A source present said, ‘She was being as unequivocal as I’d ever seen her, completely clear. And that’s what took us to the benefits route.’ Merkel had grown up under communism in East Germany. She was not prepared to compromise on the freedom to cross borders, which she had been denied for the first thirty-five years of her life.

The leak torpedoed a secret plan Oliver Letwin and a small number of Cameron’s political advisers had been working on since July without the knowledge of civil servants. A Cameron adviser said the civil servants ‘went nuts when they found out – but they never understood the view that we would struggle to win a referendum without a very serious immigration answer’. Cameron’s policy staff then devised a time-limited ‘emergency brake’ which Britain could pull in extreme circumstances to halt EU arrivals. But the plan sparked some of the most heated rows between the politicos and the career diplomats and civil servants led by Ivan Rogers, Britain’s ambassador to the EU, Cameron’s civil service EU adviser Tom Scholar, and William Hague’s special adviser Denzil Davidson. ‘There was opposition from the civil service,’ said a Downing Street aide. ‘The FCO’s approach was that this was completely unobtainable: “You’ll get outright rejection.”’

In Brussels, Rogers told senior Commission officials Martin Selmayr and Jonathan Faull, ‘Guys, if we’re going to solve this, we might have to do something that is risky and cavalier.’ But he was met with firm resistance, and bluntly told the politicos back home that an emergency brake was impossible. As a senior civil servant put it, ‘Ivan was the main bonfire pisser.’

Another political aide said, ‘The PM always wanted an emergency brake, he wanted to announce that in his immigration speech, but he couldn’t because EU law wouldn’t allow it. We’d go round endlessly in circles and come back to emergency brake. He’d go, “We must be able to do something about it!” We’d always come back to “It’s not possible, free movement is a fundamental part of the EU.” It was frustrating for the PM. He knew what he wanted to do, he knew what the British people wanted.’ For their part the officials felt they were being asked to approve ideas with little or no chance of success, and that their job was to advise caution.

Ed Llewellyn had kept lines of communication open with the Germans, who wanted to be helpful but consistently made clear that freedom of movement reform – and treaty change – were not doable. But Cameron believed that he might be successful if he said a brake on numbers was the price of Britain staying in the EU. One of those involved in the deliberations said, ‘A number of people in Number 10 – including the PM – suspected deep down that, when it came to it, in the early hours of a European Council meeting, the EU wouldn’t let the UK leave on the basis of a temporary emergency brake. It would be high-risk, so the trick would be to keep any announced plan high-level – one of the reasons why the Gove leak, with all its detail, was so damaging.’

Two days before the speech, the emergency brake was still in the text and the civil servants mutinied. ‘We asked them how it worked, because you can’t just stop people coming into the country. How do you enforce it?’ an official said. ‘It’s not something we can negotiate, and it doesn’t work in practice. Why the hell are we about to put this in the speech?’

At the last moment, Cameron decided to switch to a proposal that had been drawn up by the Eurosceptic think tank Open Europe to ban EU migrants from claiming in-work benefits such as tax credits and social housing until they had been working in Britain and paying into the system for several years. Ivan Rogers’ team in Brussels and Tom Scholar in London said that would not be tolerated by other EU nations either. Believing the Open Europe proposal would need treaty change, Rogers got his legal adviser, Ivan Smith, to examine the plan. He concluded it was illegal. Rogers told Cameron and his political advisers, ‘Clearly this does require treaty change because this will be deliberate discrimination on the grounds of nationality. I don’t think the other countries can go there. Even if they privately think you’ve got a point, I don’t think they can go there with their publics.’ But Cameron had to offer something on migration. A ban on migrants claiming child benefit for dependants living outside the UK and a pledge to remove those who had not found work after six months were also added. The changes happened so fast that Iain Duncan Smith, who had been sent drafts of the speech for his comments, had no idea the emergency brake had been removed until he turned on the television to watch Cameron speak. As man-management of one of the most influential Eurosceptics went, it left much to be desired. ‘Up until two days before the speech, the emergency brake was there in the speech,’ an aide involved in the deliberations said. ‘The removal was so last-minute that the argument for the brake was still essentially running through the speech he delivered.’

Afterwards, rumours abounded that Merkel and her staff had read the speech and excised the migration cap. But a Downing Street source said, ‘It wasn’t blocked by Merkel, it was blocked by us, because we knew we would never get it. She had not seen the speech.’ The Germans did have some input, however. ‘Ed [Llewellyn] got the message from Merkel’s chief of staff that she couldn’t support it,’ a Number 10 source said.

In fact the decisive intervention that killed off an emergency brake on migrant numbers, a policy which many Cameroons later believed might have been enough for them to win the referendum, was made by Theresa May, the home secretary, and Philip Hammond, the foreign secretary. Both were invited to see Cameron after the regular 8.30 a.m. meeting in Downing Street the day before the speech, along with a small number of officials. A week earlier, May had written Cameron a letter urging him to back an emergency brake. Cameron had made it clear that, despite Merkel’s opposition, he was considering demanding the emergency brake on numbers anyway. ‘The PM told them what the Germans had said, and asked for their view on whether we should go ahead and announce in any case,’ a Downing Street source said. ‘Hammond spoke first, and argued that we just couldn’t announce something that would receive an immediate raspberry in Europe. It wouldn’t be seen as credible domestically, and it would set us on the path towards Brexit. Theresa said very, very little, and simply said that we just couldn’t go against Merkel.’

An eyewitness said, ‘The PM was visibly deflated as they left.’ Cameron turned to one of his officials and said, ‘Look, we tried, but I can’t do it without their support. We’ll just have to go with the benefits plan. If it wasn’t for my lily-livered cabinet colleagues …’

This position might seem reasonable, but given that May and Hammond would later be responsible for negotiating Brexit, it was also instructive of their approach. May was to write a second letter to Cameron on 21 May 2015 urging him to adopt tough immigration measures, but the Cameron aide said, ‘It’s true she obviously wanted as good an immigration deal as she could get. It’s true that she wrote a letter. But when the crunch moment came – do we take a risk, do we go for something that is going to be tougher and that Merkel is not going to back, and that will be tougher to negotiate post the election? – her instinct was that if the Germans don’t support it, we can’t do it.’

A senior Downing Street source says, ‘David Cameron was going for the welfare brake, and he said, “I need an emergency brake. I need to sort this out, because I think that’s what will help.” Who were the two people who told him not to do that because it’s undeliverable? Your new prime minister and chancellor of the exchequer: Theresa May and Philip Hammond. So when Theresa talks about “I will not take no for an answer,” she was the one who folded then. Theresa May and Philip Hammond were the ones to say “You won’t get the emergency brake.”’

The benefits plan was toughened from a two-year ban on claims to three years, and then again to four years in the final draft. When Cameron finally gave the speech on 28 November, he said, ‘Immigration benefits Britain, but it needs to be controlled. It needs to be fair.’ He then used language that was to be adopted wholesale by the Leave campaign: ‘People want government to have control over the numbers of people coming here … they want control over who has the right to receive benefits.’

From that point onwards, David Cameron’s renegotiation hung primarily on the success of a deal on migrant benefits, which was a pale imitation of the one he really wanted. But without the support of Merkel, May or Hammond he did not feel able to proceed. One close aide thinks this was a ‘fundamental misjudgement’: ‘We genuinely thought at the time of that immigration speech we could get some significant movement on immigration. It evolved into controls on benefits because those are more achievable.’ One of the civil servants saw the episode as all too typical of Team Cameron’s general approach to Europe: ‘That was the moment he gave up on controlling numbers, and it was almost by accident.’

Others think he should have been prepared to ignore the officials, and was too quickly frightened off by Merkel. She had rejected quotas, but she was never put on the spot in the small hours of a summit about an emergency brake on numbers. Ultimately the renegotiation was a political, not a legal, enterprise, and Cameron could have challenged Merkel to help find a solution. ‘What I genuinely don’t know is whether Merkel in her comments about emergency brakes had really given it any thought as a separate issue,’ a senior minister said, ‘or whether she treated it as the same issue: “quotas and emergency brakes together”. The whole focus of the JCB speech was to shift the debate to benefits. I wonder up to this day whether, if we’d pushed the emergency brake – in terms of numbers, not on benefits – we could have got that. My gut instinct was that the emergency brake was the outer reaches of negotiability.’

After the general election, the Syrian civil war created a fresh migration crisis which put the issue back at the top of the political agenda. In September 2015 Merkel made the rashest decision of her time in power, announcing that refugees were welcome in Germany. The British reaction to Merkel’s extraordinary offer was ‘astonishment’, according to a source who was in touch with the Germans: ‘She would defend it by saying, “What do you expect us to do? We’re not going to shoot people.”’ The result was a vast human tide that prompted several EU countries to reinstate border controls, including Germany. The International Organisation of Migration estimated that one million migrants arrived in Europe in 2015, three to four times as many as the year before, while approaching 4,000 lost their lives while attempting to cross the Mediterranean. Throughout the summer there were almost daily reports from across the Channel in Calais, where migrants gathered seeking passage to Britain. Gradually, but detectably, support for Brexit rose. Andrew Cooper told Cameron the migrant crisis had cost Remain five percentage points.

Merkel was not the only strong woman giving Cameron grief that summer. On 30 August, a week after immigration figures were released showing net migration had hit 330,000, Theresa May wrote a newspaper article announcing that migrants should be banned from entering Britain unless they had a job to go to. She called for EU leaders to tear up the rules on freedom of movement, and even questioned the existence of the Schengen Agreement, saying it had led to the deaths of migrants and placed people at the mercy of people-traffickers. Going much further than Cameron’s renegotiation, she said, ‘When it was first enshrined, free movement meant the freedom to move to a job, not the freedom to cross borders to look for work or claim benefits.’ Five weeks later May put down another marker with an uncompromising speech at the Conservative Party conference which left parts of Downing Street aghast. The speech, written by Nick Timothy, said asylum seekers who entered Britain illegally would be barred from settling permanently in the UK. It led one MP to describe May as ‘Enoch Powell in a dress’.18

May’s intervention was unwelcome, because it was becoming clear that the four-year benefits ban was not going to fly with Britain’s allies (who wanted benefits phasing in much quicker). Europe minister David Lidington approached Llewellyn at the Conservative conference and said, ‘We’re not going to get four years.’ But he added, ‘I am starting to pick up that people are talking about emergency brakes again.’ The negotiators put out feelers. ‘The problem was, at that stage, because we’d spoken so much about migrant benefits, the emergency brake proposal we’d heard from the others and the European Commission was of an emergency brake on welfare, rather than on numbers,’ said Lidington. This new idea sounded good, but it meant watering down the plans outlined in the JCB speech, which were already a poor substitute for a proper limit on the number of new arrivals.

Just before party conference Sajid Javid, the business secretary, also floated an idea in conversation with George Osborne. He suggested free movement should be linked to a country’s GDP, so migrants from richer countries in the EU could travel freely, but those from poorer nations could not. Javid believed something more on immigration was needed, but he was told the idea was ‘not a flier’, and not to put anything in writing to Downing Street in case it leaked. Number 10 banned him from addressing a Eurosceptic fringe meeting at the conference.

The realisation that the offering at the referendum would do nothing meaningful to limit immigrant numbers led to another bout of infighting over the scale of Cameron’s demands. His younger aides – Mats Persson, Ameet Gill, Daniel Korski and Max Chambers – all wanted a bolder gesture than Ivan Rogers and Tom Scholar were prepared to endorse. ‘I can promise you the PM kept coming back to the idea of an emergency brake. That’s what he wanted all the way through,’ one aide said.

Another member of the inner circle said Cameron and Llewellyn later regretted their caution: ‘I know certainly Ed and indeed the PM do look back and think, “We should have probably gone hard and more publicly on the migration.”’ Cameron’s opponents agreed. Daniel Hannan said, ‘I think the huge mistake that he made, tactically and strategically, was to put all his eggs in the baskets of migration and benefits.’

Andrew Cooper, who was constantly polling and focus-grouping each iteration of the migrant plan, warned Cameron, as he was drawing up his formal proposals at the start of November 2015, that the benefits brake would not be enough to neutralise immigration as a referendum issue: ‘It became clear very early on that it was obviously going to be a massive problem. We tested multiple different versions. The conclusion was: all the things that look achievable don’t remotely pass the credibility test with the electorate.’

As Cameron began to finalise his renegotiation demands towards the end of 2015, he was preparing for a referendum that his closest ally George Osborne did not want, by working on a plan to reduce migrant benefits that his chief pollster thought was inadequate because a tougher plan had been rejected as unworkable by Angela Merkel and consequently by Theresa May. And all the while the migration crisis filled television screens, demonstrating the impact of Macmillan’s ‘events’ on politics.

A member of Cameron’s team said, ‘Perhaps the biggest regret of David’s premiership will be not going for the brake back in that speech. In the end, we actually got far-reaching changes to benefits to the surprise of many, even though it contravened every facet of EU law on non-discrimination. The Commission just found a way to bend the rules. But Tom [Scholar] had advised us that any substantial reform on free movement was simply not achievable and that free movement was a holy, inviolable principle. I regret that we trusted Tom too much. Who knows – if we’d gone with our gut, the boss could still be in Number 10 today.’

David Cameron had not yet lost the referendum, but his failure to demand a cap or an emergency brake on migrant numbers left him with a mountain to climb before he had even started. It was a situation the Eurosceptics were straining at the leash to exploit.