A new deal for Britain

It is becoming increasingly clear what the Conservative party expects of its Prime Minister. If he is going to agree to 17 eurozone countries pushing ahead with the Franco-German plan for fiscal union, he needs to secure a new deal for Britain in exchange.

Just what this new deal should look like is a matter of intense debate in Conservative circles. If France and Germany turn the eurozone into a ‘fiscal union’, what does that mean for Britain’s standing in the European Union? At the weekend, Iain Duncan Smith suggested that the nature of the EU would change so much that a referendum would be necessary. No. 10 quickly ruled that out. Cameron confided to Cabinet colleagues on Monday that he feared another referendum would bring down the coalition. But by Tuesday night, he was pledging to veto any treaty that did not contain safeguards for the City of London.

Many ministers are inclined to go to ground as soon as they hear Europe mentioned. But when I meet Owen Paterson, the Northern Ireland Secretary and one of the few representatives of the Tory right in the Cabinet, he has plenty to say. He starts by talking about Northern Ireland but pretty soon we turn to the EU.

‘There is no question, if they effectively create a new country, that is absolutely their right to do so. It does run counter, of course, to 300 years of British foreign policy in trying to avoid that happening. But if that is the way out of the conundrum on the euro, I think we have to respect that. But they have to respect the fact that it will create a brand-new relationship for us,’ he says in a matter-of-fact manner from across the breakfast table.