Cameron’s Gamble

Shoes discarded, David Cameron pads down the aisle of a private charter jet with a chocolate-frosted cake. It is May 15, and he is returning from a four-night, three-city visit to the U.S. In London, more than a third of Conservative MPs have just refused to back his legislative program because it doesn’t enshrine in law his promise of a referendum on Britain’s membership in the European Union. Britain’s Prime Minister seems blithely unconcerned. His communications chief and a protection officer are celebrating their joint birthdays, and Cameron dispenses torte to the traveling press.

A headline writer for a British tabloid might pounce on this as Cameron’s Marie Antoinette moment: LET THEM EAT CAKE! A full-blown insurrection is brewing in the Tory party, and many in the media say the aristocratic politician is out of touch, too posh to properly connect with voters or his own backbenchers. A significant proportion of Britons believe the nation is under attack from trendy liberal values and from European bureaucrats. Traditionally Tory supporters, they do not trust the sophisticated, metropolitan Cameron who wears his conservative convictions lightly. Over the past year, increasing numbers of them have switched allegiance to the United Kingdom Independence Party (UKIP), an upstart band of Euroskeptics.

This is not merely a domestic political issue for Cameron and his Tory party. In seeking to unify his party and undercut UKIP’s appeal, the Prime Minister has started a process that could redraw not only Britain’s relationship with Europe but the European Union itself. In a Jan. 23 speech in London, he pledged a referendum before the end of 2017 allowing Britons to decide whether to remain part of the E.U. or leave it. His view is that Britain should stay, on renegotiated terms. But a plurality of his compatriots disagree, favoring a British exit by 43% to 37% according to a May 15 poll.

The political turbulence in Britain has left continental European leaders irritated and anxious in equal measure. “Europe existed before Britain joined it,” sniffed French President François Hollande at a May 16 press conference in Paris. In truth, Europe would look very different shorn of its most outward-facing nation–a useful counterweight to the impulse to state intervention and protectionism that is much stronger in other E.U. countries, especially Hollande’s.

Cameron arrived in Washington, the first stop of his U.S. tour, to discuss June’s G-8 summit, which he is hosting in Northern Ireland. He also pushed for a free-trade deal between the U.S. and the E.U. as an important plank in building a sustainable global recovery. But a large elephant loitered conspicuously in the East Room of the White House as Cameron and President Barack Obama held a joint press conference on May 13. If the referendum goes as UKIP and many Tory backbenchers would like it to, Britain may not be part of that free-trade deal.

For its part, the U.S. would much prefer that Britain remain in the E.U.: an exit would have not only economic repercussions but also diplomatic ones. Britain has always facilitated U.S. communications with continental Europe, and British leaders have often taken the U.S. side in international debates. With Cameron standing next to him at the White House podium, Obama explicitly backed his British partner’s position on Europe. “You probably want to see if you can fix what’s broken in a very important relationship before you break it off,” he said.

Buoyed by Obama’s endorsement, which made headlines back in the U.K., the Prime Minister flew on to Boston and then New York City. There, speaking with a panel of Time Inc. editors, Cameron talked about trade, about attempts to find a settlement in Syria, about Iran–all issues that reinforce his view of the importance of international relationships in a globalized world. Most of all, Cameron talked about Europe. He is combatting an attitude he describes as “a sort of ‘Stop the world, I want to get off, pull up the drawbridge’ approach to life,” he says. “That’s not what made Britain great, nor will make us great in the future.” Cameron’s vision of his island nation is not one of splendid isolation. To be great, he argues, Britain needs Europe.

The Continental Divide

To understand why that view may cost Cameron his leadership–and how the internal politics of Britain’s Conservative Party has somehow turned into a matter of global importance–you need to know a little about the party and its tendency to self-destruct over Europe. But first you need to know who Cameron is: a bred-in-the-bone Conservative who has evolved into a political pragmatist.

Descended from King William IV and the grandson of a baronet, David William Donald Cameron was born into Britain’s ruling classes; studied at Eton College, an elite school that has produced 19 British Prime Ministers; and took politics, philosophy and economics, the Oxford University degree that has graced the résumés of many Establishment figures. As preparation for a career in politics, these advantages conferred notable disadvantages. Cameron is most comfortable in his own gilded circles and relies on proxies to connect with the masses. This has sometimes had disastrous consequences, as when he appointed as his press chief Andy Coulson, former editor of Rupert Murdoch’s tabloid News of the World, a decision that embroiled Cameron in the hacking scandal.

But Cameron’s start in life in other respects equipped him admirably to rise. It gave him confidence, fluency, a grounding in the disciplines and traditions of British parliamentary politics and a worldview that sits well with some parts of the Conservative Party. Cameronism is Atlanticist, friendly to big and small business and free trade, fiscally conservative, opposed to Big Government, patriotic, traditionalist. That worldview, much like the Christian faith Cameron once described as “part of who I am” while admitting he was not a regular churchgoer, is a part of his identity that he revisits only occasionally. On a day-to-day, policy-by-policy level, he’s prepared to sacrifice small principles for what he regards as bigger ones.

Cameron says on Europe he’s “been pretty consistent. Hardheaded, practical engagement–not [a] starry-eyed dreamer about the European Union, but recognizing it is in Britain’s interest to get the best out of this organization.” Euroskeptic Tories have cause to disagree. They remember the smooth young orator who gave a bravura speech at the party’s 2005 annual convention. Cameron won the Tory leadership in no small part because of his undertaking to withdraw the Conservative Party from the EPP, the grouping of moderate, center-right parties in the European Parliament, the E.U.’s legislative arm. That decision caused him problems later, when he led the Tories out of the EPP in 2009, straining relations with German Chancellor Angela Merkel and other EPP members just when he needed a close working relationship with them.

Since then, Cameron has given the Tory right–Euroskeptics and social conservatives–as many reasons to jeer as to cheer. He calculated that his party itself had to transform to attain power, by reaching beyond its base to the center, but he failed to win an outright majority in 2010 and took the Tories into a shotgun wedding with the ardently Europhile, socially progressive Liberal Democrats, just as the euro-zone crisis threatened an unprecedented centralizing of powers in Brussels.

The reason Cameron wasn’t able to include his European-referendum promise in the coalition government’s latest legislative program, provoking rebellion in his ranks, was that the Lib Dems oppose such a vote. Tory backbenchers mutter that Cameron feels more at home with the Lib Dems than his own kind. The left, meanwhile, portrays him as a Conservative ideologue masquerading as a liberal. Which is the real Cameron? The Prime Minister grimaces at the question. “If you take both these criticisms and work out they can’t [both] be right, you end up with a very sensible, practical, hardheaded, proud Brit who does the best for his country.”

As a summation of his core beliefs, it’s typically vague and doesn’t reassure Euroskeptic voters. UKIP, by contrast, offers them lots of red meat, including the promise of an immediate in-or-out referendum on Europe. Like Cameron, whose pledge is intended as the centerpiece of the Conservative manifesto for the 2015 general election, UKIP would actually have to win to make good on its promise. But unlike the Prime Minister, UKIP actually wants a referendum. Cameron until January resolutely resisted opening the question of Britain’s E.U. membership. When he finally agreed to the vote, he was gambling that the gesture alone would bring his party to heel and cut the ground from beneath UKIP. A Survation poll published on May 20 shows how badly that gamble misfired. UKIP–its members inevitably nicknamed Kippers after the smoked fish that in less multicultural times regularly graced British breakfast tables–now commands the support of 22% of voters, putting it just two points behind the Tories. The fringe party has yet to win a parliamentary seat but appears on course to draw enough Tory votes to do so in 2015, threatening not just the Conservatives’ tenuous grip on power but their centuries-old position as one of three natural parties of government.

The Survation survey and other recent polls suggest the likeliest outcome of this realignment is a triumph for Labour. That might mean Britons are denied a say on E.U. membership–Labour is largely pro-Europe, though some in the party now argue that they too should promise a plebiscite. Cameron has uncorked a genie, and nobody knows who will end up holding the bottle.

Even if Cameron promised the referendum for expediency, no British politician can ignore what’s happening across the English Channel. As the 17 countries of the euro zone work to shore up the fracturing single currency, increasing the pace of European integration to make diverse economies behave more like one another, the 10 E.U. countries including the U.K. that retain their own currencies are also affected. Proposals to cap bankers’ bonuses and other measures to regulate financial markets risk damaging London’s standing as a global financial center. “We have to work out, given [the E.U.] is radically changing in front of our eyes, what’s right for Britain,” Cameron says. “And in my view, what’s right for Britain [is] to say, Hold on a second. The euro is driving a massive process of change. We therefore need to reform the European Union [and] reform our relationship with it.”

What He Really Wants

Cameron has yet to clarify what reforms he will seek, instead pinning that decision on the outcome of a grandly titled exercise, the Balance of Competences. Launched last July without Lib Dem backing, this is officially a Conservative Party effort, not a government initiative, to assess the impact of E.U. laws and regulations on the U.K. and other member countries. Such an audit is long overdue.

Though Germany and France, Europe’s largest economies, have declined to participate because of the audit’s political nature, the exercise is sure to illuminate dark corners and identify areas ripe for reform. Membership in the E.U. confers substantial advantages: nearly 70 years of peace, for one thing; access to the world’s largest single market, with a combined GDP of $17.2 trillion; a seat at Europe’s top table. But the organization famously lacks accountability; its structures are unwieldy, its costs out of control and its directives labyrinthine.

British Euroskeptics claim that the lack of a detailed list of demands at the outset will allow Cameron to return from E.U. headquarters in Brussels ahead of the referendum waving minor concessions and claiming Britons can now safely vote to stay in the union. But the E.U.’s top official, European Council president Herman van Rompuy, has warned that British demands for reform could endanger the union as a whole. “If every member state were able to cherry-pick those parts of existing policies that they most like and opt out of those that they least like, the union in general, and the single market in particular, would soon unravel,” he told the British newspaper the Guardian.

Such Euro-arrogance does little to endear the E.U. to ordinary Britons. But much British anxiety about the E.U. is also rooted in misconception and myth. While Brussels does issue the occasionally obtuse diktat, E.U. bureaucrats have never banned bent bananas or legislated to cover barmaids’ cleavages or outlawed the Queen’s favorite dog breed, the corgi. Such tall tales play to UKIP’s narratives, which are interlaced with unease over immigration, a nagging sense that British culture and prosperity are under external threat and a general disillusionment with mainstream politics. Turn away from Europe, UKIP argues, and Britain can go back to being Britain.

Cameron asserts that he’s delivering plenty of other results that should please the right and not a few on the left. His government is recalibrating the core institutions that have defined postwar Britain: the National Health Service, the welfare and pension systems, schools–all long-standing Tory targets. On the other hand, he has championed gay marriage, in the teeth of opposition from his party. On May 21, a bill legalizing same-sex marriage got the assent of the House of Commons–but fewer than half of Conservative MPs.

But it’s Cameron’s Europe policy that has done the greatest damage to relations with his fellow Conservatives. They never forgave John Major, the last Tory Prime Minister, for signing up to the 1992 Maastricht Treaty, which turned the single market into the E.U. A revolt among the ranks undermined his leadership. That same rebellious spirit is now abroad in Westminster, where there’s talk in the bars and tearooms of Cameron’s ouster. The surviving “Big Beasts” of Margaret Thatcher’s Cabinet are queuing up to offer damaging commentaries. “The ratchet-effect of Euroskepticism has now gone so far that the Conservative leadership is in effect running scared of its own backbenchers, let alone UKIP,” former Chancellor Lord Howe wrote in the Observer.

But even if Cameron were ousted tomorrow, he has set in motion deep changes that won’t be easily stopped. His administration is among “the most radical governments anywhere in the Western world,” he says, with evident pride, listing as its achievements “very big, meaty reforms” of the public sector. He acknowledges that he didn’t have much choice about imposing an economic-austerity program to avoid “massive uncertainty in the financial markets.” But he’s satisfied with the outcome. “The central government’s smaller than it’s been at any time since the Second World War,” he says.

Another of his decisions could lead to the downsizing of the United Kingdom itself: a plebiscite next year will allow Scotland to choose whether to stay in the U.K. In agreeing to that vote, Cameron gambled that Scots will see that their interests lie in remaining part of a union that provides access to a big internal market and more heft and profile in international affairs than a small country could achieve on its own. Now, if only he can persuade his countrymen–and more immediately, his party–to think that way about Europe.