Bloomberg News

Tory Rebels Warned of Worse Deal on Europe After Vote

November 01, 2012

U.K. Prime Minister David Cameron

David Cameron, the U.K.'s prime minister. Photographer: Jock Fistick/Bloomberg

Senior British government ministers warned rebel Tory lawmakers they risk getting a worse deal on the European Union budget than they want if they tie Prime Minister David Cameron’s hands in summit talks.

Cameron suffered a defeat in the House of Commons last night when euro-skeptic Tories teamed up with the opposition Labour Party. Lawmakers voted 307 to 294 for a non-binding amendment urging the premier to go into negotiations in Brussels on Nov. 22-23 with the aim of securing a real-terms reduction in the bloc’s spending between 2014 and 2020, rather than the freeze Cameron has said he’ll push for.

Conservative Chancellor of the Exchequer George Osborne told BBC Radio 4 today that the party leadership will listen to the rebels’ concerns, while warning that the real test will come once Cameron returns from the summit. The House of Commons will then hold a binding vote on whether to support an agreement.

“I want a cut in the EU budget, David Cameron wants a cut and pretty much every Conservative MP wants a cut,” Osborne said. “But is a deal better than the alternative?” he asked, of the EU agreeing spending on an annual basis.

“Of course I would like to see less money go to the European Union budget,” Deputy Prime Minister Nick Clegg said in a speech in London. “It’s what you think is the best possible deal rather than insist on an impossible deal.”

Clegg said the Conservative rebels had sent “a clear signal” to bear down on EU spending, though he echoed Osborne by saying that “the crunch decision will come when there is or is not a deal on the table” in a Commons vote after the summit.

Veto Threat

The prime minister has said he’ll use Britain’s veto if he can’t reach an acceptable agreement with other EU heads of government.

Clegg, whose Liberal Democrats are the most pro-European of the three main parties, was critical of Conservatives who say their aim is to claw powers back from the EU.

“Repatriation is a false promise wrapped in a Union Jack,” the deputy premier said.

He also attacked the opposition for siding with the Tory rebels last night, saying the party should “grow up and stop playing these playground games in Parliament and show they are capable of taking mature decisions in the national interest.”

The Commons vote highlighted splits within the Conservatives over Europe and the difficulties the prime minister has getting his lawmakers to back policies they don’t like. Earlier this year, rebels forced him to drop plans to change the make-up of the upper House of Lords. Dissent among lawmakers last month led to the resignation of Chief Whip Andrew Mitchell, who had been responsible for Tory party discipline.

‘Incendiary Issue’

“This vote again shows the difficulty Cameron has with his own side,” Philip Cowley, professor of politics at Nottingham University, said in a telephone interview. “In this rebellious party, Europe is the most incendiary issue, but it’s not the only one.”

It’s the first time the premier has lost a parliamentary vote at the hands of his own party. Cameron had only previously been defeated in the Commons when Labour outmaneuvered the Conservatives on a technical motion in 2011.

One of the rebels, Mark Pritchard, said the vote would strengthen Cameron’s hand in the negotiations with his EU counterparts. Tony Baldry, a Conservative who voted with Cameron, dismissed that thinking.

Loyalist View

“The prime minister knows what he wants to achieve,” Baldry told Sky News television after the vote. “Having been defeated even on a ‘take-note’ vote in the House of Commons, he will find that frustrating.” He described Pritchard’s argument that Cameron would go into the budget talks stronger as “complete cobblers.”

Even as his party rebels against him, Cameron has managed to steer clear of the market woes hurting other European leaders. With the Bank of England backing up his austerity drive with debt purchases to keep the economy afloat, the yield on the country’s 10-year bond is at 1.88 percent, about a third of the yield on Spanish debt.

The Labour Party said 50 Tories rebelled last night, making it Cameron’s second biggest revolt. The largest, in a vote he won with Labour support, was last year, and also on the EU, when 81 Conservatives called for a referendum on leaving the 27- member bloc. Both rebellions were bigger than any rebellion suffered by a previous Conservative prime minister, including those faced by John Major in 1993 that almost bought down his government.

The European Commission has proposed a spending package of 1.03 trillion euros ($1.34 trillion) for the years 2014 through 2020, an increase of almost 6 percent compared with the 2007- 2013 budget. Cameron has said the proposal is excessive at a time of national fiscal constraints.

To contact the reporters on this story: Robert Hutton in London at rhutton1@bloomberg.net; Kitty Donaldson in London at kdonaldson1@bloomberg.net; Gonzalo Vina in London at gvina@bloomberg.net

To contact the editor responsible for this story: Eddie Buckle at ebuckle@bloomberg.net


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