It's not all Balls

The ploy by Ed Balls and Douglas Alexander to call for Dave Cameron to secure real cuts in the EU budget is a way of setting an elephant trap for the prime minister. They know if they were in office they would have great difficulty in securing such cuts given the stance of other member states. But it will give them another chance to score a few political points by portraying the Government as weak and incompetent, as well as increasing disarray on the Conservative benches.

So it's a smart tactical move. But once we get away from the partisan point scoring, they do have something interesting and important to say in their Times article. They point out that for all the fuss about Brussels bureaucrats, administration only takes up 6 per cent of the EU budget. £45 billion is sucked up by the CAP at a net cost to the UK of £1 billion a year (although we do get a budget rebate).

They argue, 'Although the butter mountains of the past are long gone, the need for reform is no less urgent. The CAP is an obstacle to international trade liberalisation, creates too few jobs and introduces distortions so that there is not a level playing field. The EU cannot afford this waste.'

They maintain. 'further reform of the CAP must not just be discussed but implemented.' If only. I think there will be some real cuts, but they will be mainly at expense of Pillar 2 expenditure which helps the environment and the rural economy. The blanket subsidies of Pillar 1 (the Single Farm Payment) will remain largely untouched.

There are a number of net beneficiaries of the CAP who will defend it to the last hedge row. But there is more to it than that. France gets less than it used to from the CAP, but for the French it is more than a question of the financial benefits, important though those are. It is also about a vision of Europe in which agriculture plays a central if often symbolic role. It is about a statist mode of government in which intervention in the market is seen as beneficial in the name of food security. Even though some are questioning whether France can continue to afford to allow 56 per cent of its GDP to be spent by the government, those attitudes are not going to change any time soon.

Interesting that Gisela Stuart, the Labour MP for Birmingham Edgbaston, thinks that Britain should contemplate leaving the EU: Stuart . Admittedly, she has been moving in a Eurosceptic direction for eight years or so and is now something of a maverick on the Labour benches. But she was born in Germany and is a particularly thoughtful MP. What she says needs to be taken seriously.

Where her argument is perhaps weakest is in relation to the possibility of a two-tier EU, although I think she is correct in her judgment that a negotiation would not deliver that much in terms of a repatriation of powers (certainly not an exit from the CAP). This is not one of the usual supspects and it may be an early indication of a real shift in the political climate.

Thinking about the unthinkable

Fifty years ago saw the start of the Cuban missile crisis. It was a frightening time if you were fifteen years old, as I was, and whatever else one says about Jack Kennedy, one has to admire the way he managed the crisis and resisted the calls of the hawks for early military action. Now it's all old history and it was announced today that two of the Cold War missile sites have been given listed status.

Nuclear war strategy was referred to then as 'thinking about the unthinkable'. Perhaps we also now need to start thinking about another kind of unthinkable, Britain leaving the European Union and what sort of domestic agricultural policy might replace the CAP. Whatever one thinks of British membership of the EU, few would mourn leaving the CAP, but British farmers would be worried about what would take its place. No doubt some contingency thinking is already being undertaken.

My hunch is that if there was a straight yes-no choice, the majority of British voters (although perhaps not in Scotland) would vote to leave. There is some evidence to support this. Peter Kellner of YouGov has written an interesting contribution on underlying attitudes for the LSE European Politics blog: Kellner

In essence the message is that there are three attitude clusters in the electorate in terms of attitudes to the outside world and only one of those could be largely relied on to vote in favour. Kellner thinks that fear would shape a lot of decisions. Of course, that could be fear of the consequences of staying in or fear of the consequences of leaving. Much would depend on the campaign.

Of course, we may never get to a yes-no vote. Dave Cameron does not like the EU, but he does not want to withdraw. His favoured scenario is to 'renegotiate' after the next election when the Conservatives might have an overall majority. He would then put the renegotiated deal to the electorate. Harold Wilson took the stance of 'no entry on Tory terms' before the 1975 referendum and got a few goodies out of the EU, but essentially we stayed in on the terms agreed by Ted Heath. Dave would probably get some concessions out of the EU, but they would fall short of what Eurosceptics wanted.

Hence some Eurosceptics are calling for a yes-no referendum at the time of the next election. Conservatives are worried about a UKIP victory in the 2014 European Parliament elections, a more than likely scenario, and then losing votes to them in the following general election.

How this will all play out depends on a wide range of different factors affecting Conservative Party politics. If Labour wins, there is a different scenario (although if they were dependent on Lib Dem support, there would be another one again). Ed Miliband always jumps on any bandwagon that comes along, although usually what he does is call for a public inquiry rather than a referendum. There wouldn't be any judges left to staff the courts if all his requests were granted. However, Miliband could promise some sort of referendum, although its timing and nature would probably be left vague.

Anyway, the point is that Britain leaving the EU is a sufficiently serious possibility to start thinking what we would do then and that is what I plan to do over the next few months, starting with the nature of agricultural policy betweeen the end of the Second World War and our accession to the EU.

France and Germany do their deal

Long-term observers of the CAP know that any agreement between France and Germany can often shape the direction of the reform process. Even with many more member states, this still remains true. Earlier this week the two countries issued a joint statement calling for a freeze at 2013 levels in nominal terms Agreement

Calls for a nominal freeze in the budget, which will still mean a decline in real terms, have been growing in recent months and around half of governments voiced their support for the Commission plan at a General Affairs Council late last month.

The country’s two agriculture ministers – France’s Stéphane Le Foll (rather superior and disdainful in a typical French mode) and German counterpart Ilse Aigner – came to the agreement after meeting in Berlin. They cited the 'importance of the CAP for growth, employment and the environment and innovation in rural areas along with Europe's role in ensuring food security worldwide', in their statement. In other words, the traditional rather general but fine sounding justifications of a dysfunctional policy.

Their rejection of any reduction in Pillar One allocations was also notable taking into consideration the fact that Germany is the biggest contributor to EU funds, while France is the biggest beneficiary of direct aid payments. Germany and France join the likes of Austria, Belgium, Finland, Greece, Ireland, Luxembourg, Malta, Portugal, Romania and Spain in opposing cuts, leaving member states such as the UK, Netherlands and Sweden seeking a more austere budget with a reduced prospect of success.

Of course, British prime minister Dave Cameron is under heavy pressure from within his own party to take a tough line in budget negotiations. Indeed, Dave is no fan of the EU and reflects the traditional British distaste for the CAP in particular. Vetoing the budget would go down well at home, but it would also mean that the EU would revert to annual budgets determined by qualified majority voting, reduced the influence of Britain and its allies.

Meanwhile for an authoritative account of tensions between member states and the European Parliament over the CAP, this blog post by Christilla Roderer-Rynning is recommended: Parliament

The big politics behind the CAP deal

Why was Dave Cameron willing to do a deal with France and Germany on CAP subsidies given that he is genuinely an Eurosceptic? This article (which was easy to miss as it came out on Boxing Day) explains the big politics behind the deal and opens with some amusing remarks about CAP subsidies: CAP deal