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Reference ID Created Released Classification Origin
09LONDON2509 2009-11-05 18:06 2011-02-04 21:09 CONFIDENTIAL//NOFORN Embassy London
INFO  LOG-00   AID-00   A-00     CIAE-00  INL-00   DODE-00  PDI-00   
      DS-00    EAP-00   DHSE-00  FBIE-00  VCI-00   OBO-00   H-00     
      TEDE-00  INR-00   IO-00    LAB-01   MOFM-00  MOF-00   VCIE-00  
      NSAE-00  OMB-00   NIMA-00  PM-00    DOHS-00  FMPC-00  SP-00    
      IRM-00   SSO-00   SS-00    NCTC-00  SCRS-00  PMB-00   DSCC-00  
      PRM-00   DRL-00   SAS-00   FA-00    SWCI-00  SNKP-00  SECC-00  
O 051805Z NOV 09
C O N F I D E N T I A L LONDON 002509 
E.O. 12958: DECL: 09/22/2019 
REF: A. LONDON 2341      B. LONDON DAILY 11/3/2009      C. LONDON DAILY 11/4/2009      D. LONDON DAILY 11/5/09   Classified By: Deputy Chief of Mission Richard LeBaron, reasons 1.4 (b,d).   

1. (C/NF) Summary.  Conservative leader David Cameron abandoned his party's plans for a UK referendum on the European Union's Lisbon Treaty as the treaty becomes law on December 1.  In a November 4 speech, Cameron lamented that the country, under Labour governments, was denied the chance for a referendum, but urged voters to see the Conservatives as future guarantors of British sovereignty in the face of encroachments from Brussels as he announced a new Tory EU policy.  Cameron pledged to introduce amendments to the European Communities Act 1972; to introduce a UK Sovereignty Bill; to re-negotiate Britain's existing opt-outs on social and employment legislation, the EU's Charter of Fundamental Rights, and EU criminal justice powers; and to require an Act of Parliament to allow the EU's "ratchet clauses" that increase EU power and authority without a new treaty.  The proposed changes all aim to claw back sovereign rights granted to the EU over the years.  Cameron promised that "never again" would Britons be forced to accept changes to sovereign UK law in favor of the EU without a referendum. Shadow Foreign Secretary William Hague has been tasked with overseeing a review and recommendation process on the proposed changes, which the Tories hope to implement over the next four to five years.  Cameron's speech did not address controversy over possible UK candidates for the new positions of EU President and Foreign Minister.  Reaction from Euroskeptics and at least one French minister was swift and critical.  Walking a fine line between the principles of the Euroskeptic wing of his party and the possibility of a politically-damaging Tory split on Europe, Cameron's remarks aimed to manage expectations and fears among the party faithful, European partners, and UK voters.  Cameron conceded the battle on the Lisbon referendum while preparing for the "long war" against incursion into British sovereignty.  His remarks will likely have the desired effect: deflating criticism of his party for "waffling" on Europe while deferring the difficult decisions on this divisive issue until after the UK election.  Commenting on the speech, a senior aide to David Cameron told the DCM that he hoped it would be clear to Washington that the Tory policy was to be "a full and cooperative member of the European Union."  He noted that the coverage of Cameron,s speech in the November 5 Financial Times had got it right in noting the Conservative interest in maintaining a cooperative relationship in the EU, and added that any changes a Tory government might seek would only emerge gradually during a four- to five-year-period. (End summary).   

2. (C/NF)  In the wake of the Czech Republic and Ireland's approval of the European Union's Lisbon Treaty, Conservative Party leader David Cameron was forced to concede that his party's long-standing campaign for a referendum on the treaty was over.  In a November 4 speech, Cameron said that any referendum, now that the treaty was to become EU law, would be futile -- then laid out the party's new policy approach to the EU should the Tories come into government.  In a tone that was at once conciliatory and combative, Cameron explained the shift in Conservative Party policy on the EU from 2005, when Cameron promised a referendum on Lisbon to British voters.  The time for a referendum was past, and it was time to look forward.  Under the rallying cry of "never again," Cameron laid out a plan for new guarantees to protect British sovereignty against encroachments from Brussels. Beside a portrait of a glowering Winston Churchill, Cameron attempted to draw a line under the issue that has threatened to expose a significant division in his party's rank-and-file as the UK moves toward its next general election (expected before June 2010).  To the Euroskeptic wing of the Conservative Party, Cameron promised that the issue of Europe would be tackled in time, but that the first priority of a new Tory government must be the economy and depleted public finances.   

Protecting British Sovereignty; Referendum Lock; Ratchet Clauses --------------------------------  

3. (SBU/NF)  Cameron laid out proposals that he said would protect British sovereignty and ensure that the UK Government could never again transfer sovereign authority to the EU without a referendum, thereby ensuring an "Irish-style referendum lock."  The Conservatives plan to amend the European Communities Act 1972, the primary instrument through which the UK acceded to the EU and which provided for the incorporation of European Community law into UK domestic law; the Conservative amendment would guarantee a referendum by the British people in instances where sovereign authority was being transferred to Brussels.  Cameron also pledged to introduce a UK Sovereignty Act that would ensure that final authority on legislation affecting UK citizens remained with the UK government.  Offering the pledge as an "assurance that the final word on our laws is here in Britain," Cameron said a new sovereignty act would put Britain on a par with Germany, where the Constitutional Court has upheld that ultimate authority lies with bodies established by the German Constitution.  Cameron also took aim at the Lisbon Treaty's so-called "ratchet clauses," whereby EU powers could be expanded in future without a new treaty.  The Conservatives would change the law so that any ratchet clause would require an Act of Parliament, rather than a motion and 90-minute debate.  

Re-negotiating British Opt-Outs -------------------------------  

4. (SBU/NF) Turning to some of the more controversial legislation and directives and pledging to confront the "steady and unaccountable intrusion of the European Union", Cameron promised to renegotiate "patiently and respectfully with our EU partners" the return of powers that had been handed to the EU by previous governments.  Areas in which a future Conservative government would re-negotiate British opt-outs include social and employment legislation, the EU's Charter of Fundamental Rights, and the EU's criminal justice powers.  Cameron called for a "complete opt-out" from the Charter; pointed to aspects of the social and employment legislation as "damaging" the UK's economy and public services; and pledged to limit the jurisdiction of the European Court of Justice over criminal law in Britain to "its pre-Lisbon level, and ensuring that only British authorities can initiate criminal investigations in Britain."  Cameron said that changing the "rules of the institution of which we are a member" would require careful negotiations and the agreement of all 27 member states.  He announced that Shadow Foreign Secretary William Hague would oversee a review process on precisely what the Tories would like to see changed.  The guiding principle in this process, he said, was that European integration was not a one-way street, and that powers can be returned from the EU to its member countries.   

Timing of Reform Review -----------------------  

5. (C/NF) William Hague's senior advisor told Poloff that, while many of the exact parameters still needed to be worked out, Hague would chair a European Policy Committee comprised of members of the shadow cabinet to study the whole package of possible reforms and make recommendations.  The goal would be to address the changes that Cameron had previewed in his remarks, as well as possibly others, and that the reforms would be undertaken over the course of one Parliament (i.e. five years or less).  Any changes would first be "worked through the usual parliamentary process."  The Tories were not approaching Europe with the aim of tearing down institutions but had committed to be "active and activist" within the EU and plan to work with EU partners on key issues like the Balkans, Iran, North Korea, climate change, and energy security.   

Focusing Criticism while Acquiescing to EU in Banking/Finance ------------------------------------  

6. (C/NF) Most Conservative Eurokeptics have focused criticism on the lack of say in EU affairs and in the legislation that is "imposed" on the UK but up to now have been vague about specific criticisms of EU legislation and directives.  One specific concern had traditionally been accession to the single currency (a move that could only emanate from London).  Cameron's speech, addressing concerns about the EU's Working Time Directive and its impact on the NHS and fire service, appears to be a move to focus the criticism from the abstract to everyday life.  It will be up to Hague's committee to flesh out these issues.  One area where the Tories appear in step with the EU is in banking and finance.  This week, Shadow Chancellor George Osborne strongly supported the tough state aid conditions of the EU Competition Commissioner in forcing the sale of hundreds of bank branches and insurance businesses by the Royal Bank of Scotland and Lloyds Banking Group in exchange for a second government bail out.  The Conservatives have also strongly supported EU pressure to liberalize and privatize public services, which forces change on other member states where public services remain more heavily under state control than in Britain.   

Reaction --------  

7. (C/NF) Reaction by Euroskeptic MPs to Cameron's abandonment of a referendum has been predictably critical. Euroskeptic MPs had agitated to bring the referendum issue to the fore at the party conference in Manchester after Irish voters approved the treaty (ref A), and Cameron admitted in his remarks that his new policy would be "resented" by EU critics within the party.  To forestall anticipated criticism of what had been termed a Tory "turnabout on Europe" in the press, Cameron laid blame for the denial of a referendum with Prime Minister Brown and former-PM Tony Blair ("with the help of the Liberal Democrats") -- under whose governments Lisbon was negotiated and signed.  He reasserted his support for a referendum "had the treaty not been ratified by every European government before we came to the election."  With the treaty entering into law on December 1, however, Cameron said it was not "right to concoct some new pretext for a referendum simply to have one for the sake of it."  Prominent Euroskeptic Conservative MP Douglas Carswell called for a broad referendum on the UK's relationship with Europe, while Tory MEPs Daniel Hannen and Roger Helmer resigned their front-bench spokesman positions in the European Parliament in what media characterized as a protest of Cameron's "climb-down" on Europe.  Hannen indicated that he stood down to focus on campaigning for a referendum on Europe.  French Europe Minister Pierre Lellouche denounced the new Tory policy as "pathetic" and drew a response from William Hague who said, "we won't be put off by one emotional outburst from one minister," dismissing Lellouche's comments as "not shared around the EU."   

Comment -------  

8. (C/NF) Once Ireland and the Czech Republic agreed to Lisbon, Cameron's hope that the EU question -- an issue that continues to divide his party -- could be shelved until after the UK election faded quickly, forcing a swift re-think of the Conservatives' policy.  Cameron was forced to walk a fine line:  conceding the battle on the Lisbon referendum while announcing the "long war" in support of British sovereignty over EU incursion.  His remarks and the proposed policy approach (far more detailed than previous pronouncements on Europe) was conciliatory to increasingly vocal Euroskeptics in the party whose demand for a referendum had been sacrosanct to them and their supporters.  At the same time, Cameron reinforced the Tories' willingness to work with EU partners on key multilateral issues should they win the election.  It was a savvy move; as one European diplomat told us, EU ministers generally recognize that there are times when they need to negotiate measures politically vital for a member state.  By appearing conciliatory, Cameron laid down a marker that he will work within the EU system to achieve the changes he and his party advocate.  

9.  (C/NF)  Cameron's speech did not address was the EU's post-Lisbon leadership and the UK's role in it.  Over the past two weeks, there has been considerable speculation over Tony Blair's chances of winning the new job of EU president; the Labour government has backed him (though Blair has remained silent).  Cameron is said to be vehemently opposed to Blair's candidacy. Shadow Foreign Secretary William Hague reportedly told European ambassadors in October that picking Blair would be interpreted by an incoming Conservative government as a hostile act.  He has commented publicly that Blair would only be appointed "over his dead body."  Blair's is not the only problematic candidacy; speculation has also suggested that Foreign Secretary David Miliband is under consideration for the job of EU Foreign Minister (presuming Blair's candidacy for President falls through).  Politically, either outcome would cause considerable heartburn for Cameron and the Conservatives.  As the EU makes its decision, Cameron's recommended safeguards will shape the overall Conservative response.  

10.  (C/NF)  Cameron's speech was partly aimed at managing expectations and concerns.  His pledge to re-negotiate British opt-outs "patiently and respectfully" appears aimed to allay fears in Europe that a future Conservative UK government planned to set about trashing EU institutions. His caution to Euroskeptics that a Conservative government's priority must be the economy and public finances suppressed expectations that Europe would dominate the agenda; and his reminder that changes could only come "over the course of the next Parliament" signaled that real change would take time. Hague's committee will be where the real work is done, but Cameron's speech likely will succeed in keeping a lid on the EU issue until after the election.  Visit London's Classified Website: XXXXXXXXXXXX