The re-emergence in recent months of relations with the EU as a major political issue in the UK makes explicit the mess and confusion that has long characterised debates about it. It’s worth recalling that back in the 1970s Euroscepticism was primarily the preserve of the ‘Bennite Left’ because they saw it as a vehicle for capitalist globalization via the promotion of free markets.  And of course it was just that but it was also, for its architects, and certainly for Ted Heath who championed British membership, a response to the horrors of the Second World War. So already, at this early stage, there was an irony: nationalists of the traditional Right saw Europe as a way of healing international divisions, whilst internationalists of the Left opposed it as a free-market project.  

That latter analysis received confirmation when Margaret Thatcher, for all that she is now remembered for her anti-European handbaggings, presided over the crucial transition from the EEC trade bloc to the single market  with the passing of the Single European Act in 1986. It is the consequences of that decision that created the terms of the current debate about Europe. A single market requires a single framework of regulation and law. Contracts, competition, health and safety, employment law and even weights and measures need to be unified if a single market is to be a reality. And the unification of regulation and law imply the unification of politics, since what is a political jurisdiction separate from control of such things? Moreover, the aim of British foreign policy in Europe for at least two decades was primarily the expansion of the EU eastwards, and as this was achieved the growth and increasing complexity of EU regulation and law was inevitable

Out of this basic reality two things followed in the UK which have coloured the debate since then. Firstly, for the political Right all this seemed to come as a surprise. They had seen opposition to Europe as anti-business socialism, and had not understood the distinction of a free trade zone and a single market. Additionally, under the influence of Thatcherite economics, they imagined the market as something existing independently of regulation.  So the inevitable growth of regulatory and political unification in Europe was understood as Leftist and anti-market. Thus, ironically, Tory free-market ideologues, from the Maastricht Treaty of 1992 onwards, have opposed an EU which actually promoted and extended the ideology they believe in.

Secondly, the Maastricht Treaty also shifted the Left’s view of Europe, and for two reasons.  On the one hand, it soon coincided with the emergent New Labour commitment to globalization and free markets, and in that way the main parties became indistinguishable. On the other hand, the development of, in particular, employment and human rights protections within the EU led many on the Left (and disaffected with New Labour) to think that the best hope for social democracy for a UK in the grip of the neo-liberal consensus  was to integrate more closely to Europe. Moreover, the way that the loudest anti-EU voices in the UK have been those of the most reactionary sections of the Right made Euro-enthusiasm an attractive option, if only on the principle that my enemy’s enemies are my friends. But in supporting the EU the Left became entirely blind to the way that European integration had virtually no democratic institutions or mandate, and ironically supported an  EU which actually promoted and extended a free-market ideology they do not believe in.

Perhaps the clearest expression of this double set of ironies can be found in the reactions to the French ‘no’ vote in their 2005 referendum on the European constitution. For the Eurosceptic Right this provoked great rejoicing, even though the main reason for the outcome was French suspicion of the neo-liberal agenda of the constitution. For the Europhile Left it was a matter of despair even though it was a rejection of that agenda.

The consequences of the Right’s inability to see that promoting an expanding single market entailed the diminution of national sovereignty and the Left’s unwillingness to face up to the democratic deficit that accompanied EU-enshrined rights is now becoming clear because of the Euro crisis. For the Left, the role of the EU in enforcing austerity and the erosion of welfare and pension rights without democratic mandate is becoming daily more evident. For the Right, the very lack of the political ‘super state’ they so long opposed and feared means that the kinds of fiscal discipline they would actually like to see are impossible. Indeed David Cameron’s recent ‘veto’, so enthusiastically cheered by his Eurosceptic backbenchers, ironically impeded precisely the imposition of the austerity measures which those same backbenchers see as the hallmark of sound economic policy. In short, the Euro crisis has brutally exposed the weakness of attempting economic harmonization before rather than after substantive political harmonization, a situation connived at both by the unwillingness of pro-Europeans to be honest about political harmonization and the refusal of Eurosceptics to countenance it.

So what now? In the UK, any and every discussion of the EU leads to calls for a referendum on membership.  The Right want one, believing it a racing certainty that the outcome would be withdrawal. This is by no means certain – current opinion polls are likely to be highly misleading - but even if it were to happen it would immediately expose the longstanding irony of the Right’s position. For what they envisage is a ‘Norway option’ and if this happened it would simply mean accepting EU rules without any involvement in their making and probably higher contributions than the UK presently makes.  So despite being notionally democratic it would actually reduce democracy as at least at the present time the UK’s democratically elected government has some input into EU decision-making.  But suppose the outcome were to stay in. That might silence the Eurosceptic Right (or possibly not, especially if the vote were close), but it would do nothing to make the EU more democratic since it would leave EU institutions unreformed

A far-fetched but conceivable solution is for the pro-European sections of both the Left and Right to face up to decades of dishonesty and admit that the only acceptable future for the EU is for it to be constituted as a federal state, with fully democratic institutions. That idea has almost never been voiced in UK politics because the response to Euroscepticism has been to deny that any such state is envisaged. This stance has both deformed the Left, in leading it to be muted on questions of democratic accountability, but has also given aid and succour to the Right. For even those who do not share the ‘Little Englander’ mentality have been seduced by their limited democratic vision of a referendum on the EU in its current form as the only way forward.

Given the flux in the EU right now, and the push from many of the Eurozone countries for further political integration, this is a good time for the UK to argue for the design (not the adoption) of a democratic European federal state. For the present coalition to do so would be unthinkable for its Tory section, and for Eurosceptics in other EU countries, unless combined, as it should be, with the promise of the prize they dream of - a referendum in every EU member state.  Within the coalition this would make Cameron the darling of his backbenchers whilst commanding the support of his LibDem partners. But, crucially, what would be on offer would be a referendum not on membership of the EU as presently constituted, rather on whether each country agreed to become part of the newly designed European state or not, once the plan for this had been set out.  

This plan would have to be configured in very precise terms specifying what being or not being a member of the new state would mean. For example the institutions, constitution, rights and benefits for members and their citizens would be stated, as would the terms of trade, access to decision-making and contributions of non-members. There would be no more vague talk of future ‘super states’, hypothetical ‘re-negotiations’ or Norway options but rather a precise, almost contractual, identification of what the two choices were.  Thus no space would be left for the repeated Eurosceptic complaint about the 1975 referendum that people did not know what they were voting for. Then there would have to be a very full debate, with each side getting equal, generous, government or EU funding for its campaign. At the end, those countries which had voted yes would become a federated region of a European state, those which had voted ‘no’ would remain sovereign states whose relationship with Europe would be conducted under the terms set out prior to the referendum.

Whilst it might seem an unlikely prospect, such a proposal could be politically workable since its key characteristic is that it would offer pro- and anti-Europeans alike, in Britain and in all EU countries, a realistic possibility of achieving their aims. In any case it seems even more unlikely as the Euro crisis continues that the EU will remain in its present form, probably by virtue of a technocratic fudge neither acceptable to anti-Europeans nor defensible by pro-Europeans, which will do nothing to resolve the underlying issues. By contrast, the proposal made here at least has the merit of clarity and democracy. What the outcome of such a referendum would be in Britain is impossible to say, but at all events it would straighten out many of the ironies and bizarre contortions which have characterised the politics of British relations with Europe for the last four decades.