09/12/2011 Daily Politics

I said before coming to Brussels that if I could not get adequate

safeguards for Britain in a venue European treaty then I would not

agree to it. What is on offer is not in the interests of Britain so

Hello and welcome to the Daily Politics on Friday. So, after ten

hours of negotiation, the Prime Minister refuses to put pen to

paper and sign a new European-wide treaty to help save the euro. Mr

Cameron said it just was not in Britain's interests to do so. He

said it was a tough decision but the right one. Some accused the

Prime Minister of scuppering a full accord to appease his party.

President Sarkozy of France said Mr Cameron's demands had been

unacceptable. The 17 countries which use the euro will draw up a

new fiscal pact along with others who want to join. This morning, the

PM was still in the European family photo - just. But his critics say

his actions leaves Britain isolated. And with me for the duration,

Alistair Heath from City AM and Rowenna Davies from the Guardian.

Welcome. So, Nick Clegg was fully behind the Prime Minister. Boris

Johnson says he played a blinder. And most Tory Euro-sceptics appear

to be rubbing their hands with glee. Not everyone is happy though. The

former Foreign Secretary, Lord Owen, says he has left the UK in a mess

and Labour accuse his isolationist approach as a sign of weakness, not

strength. So who is right and who is wrong? In a moment, we will hear

from our guests. But let's listen to what David Cameron had to say.

said but ball coming to Brussels that if I could not get adequate

safeguards for Britain in a new European treaty then I would not

agreed to it. What is on offer is not in the best interests of

Britain so I did not agree to it. Those countries that signed the

treaty and the agreements they have made tonight for co-ordinating

their budgets are making sure there isn't more surveillance of what

they do and the fiscal integration they need, we wish them well

because we want the eurozone to sort out its problems and achieve

the stability and growth at all of Europe - Britain included - needs.

We wish them well in that regard. The agreements they made tonight

may help them to do that. The key question for Britain was, do you

allow that to happen within the European Union treaties if you are

not happy with the safeguards you are given? I was not prepared to

agree that treaty and take it to Parliament in that way. That is why

are rejected signing this treaty today. The right thing for Britain,

a tough decision but the right one. Not many got sleep only just time

to change their shirts. Angela Merkel has a shirt as well. York

over the you? It is a total mess. - - your overdue. David Cameron

failed to get a financial deal in the eurozone. The second thing he

prepared to do was to provide a role for Britain which had

meaningful influence at will. We're going to become increasingly

isolated and that will be dangerous for this country. While this is

going on, his Conservative backbenchers and MPs are laughing.

It is a serious risk. What could he have done? He should have said, we

need to go forward with this deal. He threw his toys out of the plan

to -- the pram. They are doing it anyway? They will do it without

Britain having any influence at will. You think we should have

signed up to a balanced budget? What I think is, if David Cameron

had gone in... There are certain reasons why you think it is not a

good deal for Britain. If there was not going to be a greater growth

strategy. The only reason he was against it was partly because of

the banks and because he wanted to protect the City of London and

because his Euro-sceptic MPs did not want him to be a part of it.

think it was a great move from David Cameron. I did not think he

would be so decisive. This treaty had nothing to do with saving the

euro. It is harder for some countries to have a budget deficit.

He did not address fundamental issues which made the euro is not a

sustainable currency. The treaty is about growing the powers of the EU.

There are a whole series of policies that have nothing to do

with posting the single currency - wanting a Tobin tax, corporation

tax. Other eurozone countries did not want these things, not the UK.

That is the overdue you have given us. We will look into more detail

at what happened last night. The UK went into the negotiations last

night with the Prime Minister determined that any deal to

strengthen the eurozone should include safeguards for the UK. On

the table was a full-scale change of European Union treaties which

would have enshrined fiscal discipline on eurozone countries,

including common rules on taxation and budgets. In exchange for

signing up to this, David Cameron is reported to have demanded: Any

transfer of power from a national regulator to an EU regulator on

financial services would be subject to a veto. Banks should face a

higher capital requirement. The European Banking Authority should

The European Central Bank be rebuffed in its attempts to rule

that euro-denominated transactions These safeguards, however, were

rejected by other European leaders, including the French President,

Nicolas Sarkozy, who said, David Cameron requested something which

we all considered was unacceptable At that point, the UK exercised its

It led to 23 countries signing up to a new euro-plus group. Sweden

and the Czech Republic could soon join them, which leaves just the UK

and Hungary outside. In the last few minutes, the Hungarian leaders

have been talking about joining as well. They have indicated to the

BBC that they will also sign up. Well, you might think this is a

good day for the UKIP leader, Nigel Farage, so let's ask him. He joins

me now from Brussels. Are you happy? On the face of it, puree.

When you think there tick, you realise he has actually gained

nothing. -- about it. His negotiating position was too weak.

If he had said quite give me this will we are leaving. My real worry

is that the financial markets are extremely vulnerable. Every time

the bond markets which for the euro has a problem, Mr Sarkozy will say

it is the City of London and let's regulate them even more. We find

ourselves in the European Union in a permanent voting minority and the

least popular we have ever been. what grounds can you claim that if

Mr Cameron had threatened to leave the EU that Mr Sarkozy would have

put a Cold War around the City of London? If you go into negotiations

in Brussels, you have to be very tough and carry a big stick or you

will not get anything. Mr Cameron went in thinking he would get a

deal and exercise the veto. If he things Euro-sceptic debate would

have been appeased by this, he would have been wrong. -- thinks.

On what grounds do you think the French would be agreed to a gold

walk around London? -- would agree. We have come out of this with

nothing. And not a single power has been returned. We are now in the

worst of all worlds. Thank you for joining us. So what do the Labour

Party make of all this? Joining me from Glasgow is the Shadow Foreign

Secretary, Douglas Alexander. What Ed Miliband had vetoed the deal?

would have negotiated a better deal for Britain. When he asks the

fundamental question, what has Britain gained at of the

positioning and posturing of David Cameron last night, the answer is

nothing? Britain is more isolated than it has been around the

European table than at any point in 35 years. It is a worrying time for

Britain. Despite the securing of some headlines, David Cameron

failed to secure the real interests of Britain last night. In terms of

the City of London, I do not think it serves the interests of the City

of London to be totally outside European financial regulation.

Being part of that has been part of the success of the city in the past.

If there were real concerns, there were other options available. An

emergency brake procedure up to inter-governmental level, where

Britain could exercise a level, that could be a way forward. David

Cameron reached a point in his mind, perhaps the boy got to Brussels,

where he realised he could not get what he wanted in the House of

Commons through his own backbenchers. If Nicolas Sarkozy

was being awkward, it would have been up to a British Prime Minister

not to have agreed. We would have started the negotiations in a

different place. What you have vetoed it in the end? We would have

offered a different position. had turned that down and said he

was not giving anything special to the City of London, it would you

have vetoed the deal? We have always been in a position of QMV in

relation to the city was it takes skill, judgment and disciplined to

get the outcome. Would you have vetoed the deal if the French had

said No vote -- help for the City? Let's be clear, there were other

options available to David Cameron. I cannot prejudge the reaction of

President Sarkozy to a different Prime Minister negotiating in a

different way. This issue will unravel for Cameron. He has

exercised this in the service of what and to gain what. What

additional protections had been secured for the City of London? The

answer is nothing. We're not in a room. We are not in the room

because you did not take us into the euro. We are where we are

because your government did not join them the eurozone. One of the

things we would have been seeking, which I do not sense David Cameron

asked for, would be to make sure Britain does have the seat at the

table. We are in a position where 25 European countries would be

discussing hugely important issues. Britain would not even have a voice

in those discussions. Why would the French give us a seat at the table?

They have told Mr Cameron to shut up. Do you think Mr Sarkozy would

listen to you? This has been the consequence of a shambolic and ill

judged negotiation strategy, stretching back months. David

Cameron was telling Chancellor Merkel he did not want to be in the

room. That is what he told her as recently as March. I am not

surprised that other European leaders are confused at the

position of David Cameron. Where were the Danes, the polls, the

Dutch, of the Swedes? They were natural allies in pass negotiations

but they were nowhere last night. - - past negotiations. We are more

isolated than we needed to be. Earlier today, Alastair Campbell

tweeted: Got to admire Bill Cash. Just sat tight and waited for a

leader to come along and do his work for him. Will be excitedly

planning next steps. So, is he right? Let's speak to Mr Cash now.

I think he has done exactly the right thing. It is it all down to

you, is it? I am glad he has followed the advice that many

people have been trying to forgive him -- to give him. What does he do

next? The position basically is that the other member states threw

down the gauntlet. They wanted to move towards a political union.

What they came up with may well prove to be outside the treaty is

anyway. He is creating a pass towards for renegotiation of our

relationship with the European Union which has been well overdue.

The causes of the present troubles in the European Union come from the

structure of the treaties and over- regulation. You save for

renegotiation is a euphemism for actually now a path which we have

to follow, which will actually end up by our entering into a new

relationship and looking outwards to the rest of the world. Why do

you think the Germans or the French had any interest in creating a new

relationship for Britain? They are more likely to say, either accept

it as it is, or get out? That may well be the end game. I am saying

that at this juncture he has done the right thing. You would like

that endgame, wouldn't you? believe we have reached... I have

seen an historic turning point. Just say it pulls up I want to get

out. Get it off your chest. I know you want me to say it. There are

several months ahead of renegotiation to take place. We

have not seen a detail yet. We will hear on Monday when he comes back

from the summit in the House of Commons. It is an historic moment

for Britain and the Conservative I could not get Mr Alexander to say

he would have vetoed the deal, and I cannot get Mr Cash to say what he

really thinks. Anyway, it looks like an number of the Liberal

Democrat partners in the government will have a few choice words to say.

Joining me, the former chairman of the Conservative Party, Norman

Fowler, and the chair of the European Parliament Economic and

Monetary Affairs Committee, Sharon Bowles. So, this has got Lib Dem

support? He negotiated from the standpoint that was agreed with the

Liberal Democrats to try and do something for the City. I have to

say, that was against my advice, because I could tell you that

nothing like that would ever have been on the cards, because

financial services are part of the single market. So, we should have

put the financial services into that basket. This is a simple

question which demands a simple answer - does what Mr Cameron has

done it in Brussels have Lib Dem support? I think because he stuck

within the agreed lines, then probably the Lib Dems are very

disappointed, but they will have to concede that it was a dangerous

game, and he played and lost. Cameron could not have done

anything else and held his party together, could he? No, I think

that's right. If you go back to yesterday, we were being told by

some Euro-sceptic MPs that he was going to come back like Chamberlain,

with a worthless piece of paper. That hasn't happened. That Tory MP

owes David Cameron an apology, I would suggest. I would have thought

so, and I would think owes us a piece of silence on this debate.

The it is the first bit of good news I have heard all morning. I

think what David Cameron did his, he went with an agenda, France were

not prepared to negotiate on it at all, not on any bit of it, and he

said no. The Liberal Democrats, I heard the equivocation on your side,

I heard what Mr Alexander was saying, I'm still no clearer on

what Labour Party policy is on this. I think Cameron has done exactly

the right thing. And I do not come from a Euro-sceptic background. I

spent most of the early 1990s fighting on Maastricht. I remember

that well, I was in the trenches, covering you. Don't the Lib Dems

and sound a bit divided? I am confused by both. I thought David

Cameron was supposed to be a strong leader, who could control his

backbenchers. Who told you that? That was what his reputation was

supposed to be. But obviously not. It is interesting because we are

seeing a change in the perception of David Cameron, as someone who

was quite reactionary and actually quite weak. Absolutely totally

wrong on that. As I have said, I am not a Euro-sceptic, in the sense

that bill Cash is a Euro-sceptic. What you have found, I would be

amazed if there are any in the Conservative Party, in my part of

the party, who are against what he has done. It is not as if he has

been pushed from behind by some curious collection. Coming back to

the Lib Dems, Mr Cameron cannot act alone, he's in coalition, I would

suggest there is a fair chance, maybe higher than that, that this

is going to cause your property real problems, and divide it quite

deeply? -- your party. Well, there may be problems. Looking at it from

a European angle, I think it was something which was never going to

be a possibility for us to negotiate, and therefore the

outcome was predetermined. What about your leader? He agreed to it

because it was a compromise, it moved a long way from where it

might have been. Vince Cable, Chris Huhne, Lord Oakeshott, who seems to

speak for everybody these days, they are not happy. No, I think the

way in which we are isolated now, this is very damaging. We have not

maintained the status quo in financial services. As I said,

that's the problem, if you play and lose, you're worse off. Watcher

David Cameron do now? That is exactly the point. He actually went

in with very few demands, very weak demands, and he got nothing. This

suggests to me there is nothing he can get from the EU. They're on a

particular course, they will go a certain way, they want to integrate,

harmonise and centralised. But that fundamentally changes our

relationship. But that's true whoever was in power. Whoever was

the government... I agree, I think it would have been exactly the same

had Labour been in power. We have been at this crossroads for years,

I believe, trying to delay it. Either you choose to go completely

in the EU, with the euro, total union, or you do not. You have got

to make that choice. At some point the UK was going to have to make

that choice, because Whiteley we did not join the euro a few years

ago, under Labour. Is there any credence to this idea, which Bill

Cash was mentioning, that the British should go for a fundamental

renegotiation of our relationship? If I was going to go into

negotiations, I'm not sure I would choose this moment to go back to

Europe and say, we want to talk about employment laws and one of

those things. There's an awful lot of play still to be had. We talk as

if the 17, who have already agreed upon everything... There is a

helluva lot of discussion and negotiation which has got to go on.

Germany's view is not going to be the same, I suspect, as a number of

other countries, who are more on the fringe of Europe. We should not

take for granted that all 17, plus the other six, that they go

national parlour to -- they go national parliaments are going to

accept that they can never have a deficit of more than 3%, that their

budget will have to be submitted to Brussels before it can be approved,

that there will be an economic Planning Commission... Why would

people signed up to that, including countries like Ireland? If I was

another country inside the euro, I would have serious concerns with

this treaty, and how it affects our national sovereignty. But these

concerns do not apply to Britain. For us, it was about whether we

want to accept more financial regulation of the city, and we said

no. That to me sounds surprising, didn't we just have a financial

crash? It is much more profound than that. Cameron was actually

going in asking for the power to regulate the City more heavily than

the EU once, in the key area of capital requirements. So it is not

as simple as he himself has led us to believe. He was in favour of the

Tobin tax, and not relocating outside the City. But he was asking

for unanimity on various things which previously had been done by

qualified majority voting, which, under the treaty, would have passed

us that. That's why it was never going to be the case. Will be look

back in history and see this as the day that Britain began a long but

inevitable withdrawal from Europe? I think we could look back, but I

think there is an awful lot of play still to be had, and it is

extremely difficult to forecast. But what it does it is, it

highlights that we have got a different concept, at least the

Conservative Party has got an entirely different concept on what

Europe is about. We do not want a centralised Europe, we have never

made any secret about that, and we're not going to go ahead on a

position where we are being given that centralised Europe. Stick with

us, we have locked down the studio, you cannot leave just yet. We are

going to get some thoughts from our political correspondent Iain Watson,

who has been following events in Brussels overnight. He's still

awake, yes, there are he is, a breathing, smiling, sentient human

being, and a BBC correspondent. Mr Watson, what is the mood in the

British camp this morning, other than exhaustion? Certainly, it is

exhausted. I think the mood is that Britain did the best it could under

the circumstances. Basically, what I am picking up here is that there

was quite a lot of irritation with the British position, because they

are not in the single currency. To choose one fairly colourful

continental phrase, it was said that David Cameron wants to bring

along, Surrey, he wants to join the wife-swapping party, without

bringing along his own wife to the party. Given that is the case, what

seem to be innocuous demands to the rest of us, about protecting the

financial services, protecting the City of London, has been

interpreted here as driving a coach and horses through the single

market. I think it is a big miscalculation, actually. While the

French were very sceptical towards Britain, the Germans and others

would make compromises. In that sense, a brave face is being put on

it in the British camp. But David Cameron is saying, different

countries can do things at different speeds, why not? I

suppose this time, it is 25, even 26 countries doing one thing, and

Britain doing another. Although he's getting a lot of plaudits from

some Euro-sceptic MPs back in London, for not signing up to this

deal, which he found an acceptable, at the same time, when I was asking

about this at the press conference, he did admit there were some risks

for Britain in this, and he said it was very important to make sure

that the European institutions serve all 27 members, not just this

large inner core. Go and have another coffee, thanks for joining

us. This may be stupid, I'm actually not quite sure what all

this is about. Last time I looked, we had a major European sovereign

debt crisis, which needed funding now, which needed the ECB to do

something, to print money ought to do eurobonds, which needed the

Europeans to come up with a massive bail-out fund - none of this has

been talk about. What's happening? Exactly, nothing really is

happening. This is really a revamped version of the stability

and growth package, which was agreed during the Maastricht treaty,

which was to be responsible when it came to fiscal policy. So what this

is now saying is, actually, we're going to have a bit of a harsher

system, and therefore, everything will be sorted. It means the

European Central Bank will be relaxed and will be willing to buy

lots of European bonds. But it has already said, yesterday, it is not

going to do that. It was the president of the European Central

Bank who said, we are not doing eurobonds, we are not going to be a

lender of last resort to governments, and we are not even

going to shovel our money around the back door to the IMF, so they

can hand it out. I have to say, I never thought the ECB was going to

jump in very quickly, and the rally that we had following his remarks

in the European Parliament last week, I thought that people were

misunderstanding what he was saying. I think they still will be active

in the secondary bond market. They have increased the lending lines to

banks. It is certainly the lender of last resort to banks, that's for

sure. And ultimately, they can accept a lot more things on

repurchase, and they can therefore buy sovereign bonds, or re-purchase

sovereign bonds in that way. not quite what Mr Sarkozy was

talking about. No. We will have to leave it there. Thank you all.