All Out War: The Full Story of How Brexit Sank Britain’s Political Class

The issue that calcified Eurosceptic suspicion of Cameron was his ‘cast-iron guarantee’ in September 2007 that he would hold a referendum on the Lisbon Treaty, which greatly deepened EU integration. Once the treaty was ratified in every EU country, including by Gordon Brown’s Labour government, Cameron ditched the pledge, arguing that a referendum was pointless. He sought to placate the Eurosceptics with a speech in November 2009 announcing a ‘referendum lock’, ensuring a vote on any future European treaty ‘that transferred areas of power or competences’ from Britain to Brussels. It was a poor substitute for the in/out vote the sceptics craved. More importantly, as the then Tory MP Douglas Carswell observed, Cameron’s original promise, ‘although we reneged on it, established the legitimacy of a referendum’.

Even pro-Europeans look back on Cameron’s decision with regret, since it meant that if there was to be a referendum in future, it would be an all-or-nothing proposition. Tory MP Alistair Burt said, ‘I argued that the first chance the British people were going to get to vote on the EU they’d vote “No”, no matter what the question was. I would far rather have had a question on a constitutional issue than “In” or “Out”.’

With hindsight, the moment a referendum became inevitable occurred in October 2011. When more than 100,000 members of the public signed a petition demanding a nationwide vote, Conservative backbencher David Nuttall – whose name was regarded by Downing Street as eloquently descriptive – proposed a Commons motion calling for a referendum. Instead of letting the sceptics sound off in a vote that was not binding, Cameron unwisely turned the showdown into a trial of strength, ordering his backbenchers to vote it down. ‘We cannot lie down on this,’ he told his closest aides.4 It is understandable that he felt like imposing some order. By that point, seventeen months into the coalition government, Cameron had already endured twenty-two backbench rebellions on Europe, involving a total of sixty MPs.5 He ordered an ‘industrial-scale operation’ to rein in the sceptics.6 Word spread that anyone voting for the motion would be barred from ministerial office for four years, or even face deselection. Despite the threats, and to Cameron’s consternation, eighty-one Conservatives backed the motion, the biggest rebellion on Europe since the Second World War. At John Major’s worst moment during the passage of the Maastricht Bill in 1993 only forty-one Tory MPs had defied the whip. Without the heavy-handed whipping the rebel leaders could have mustered 150 votes against their own government. As young MPs, Cameron and Osborne had seen loyalty as the currency of promotion; now they were confronted by people who put principle first.

One of Cameron’s closest aides said, ‘For me the pivotal moment was the eighty-one rebellion. It was clear after that that the parliamentary party would not stand for anything but a referendum by the next election. I think the PM knew instinctively that was where he was going to end up.’ It would be another nine months before Cameron accepted that logic, and fifteen before he did anything about it.

Cameron may not have wished to focus on Europe, but the eurozone crisis ensured that he had no choice. The Greek economy plunged into chaos shortly after the ‘referendum lock’ speech, and attempts to prevent an ‘Acropolis Now’ collapse preoccupied the EU into 2012.

Two months after the Tories’ Commons rebellion, in December 2011, the nations in the eurozone demanded a Fiscal Compact Treaty to prop up their ailing currency. Cameron and Osborne sought protections for the City of London. In a strategy which he was to test to destruction, Cameron focused his negotiating efforts on Angela Merkel. They had a good relationship. The German chancellor had been to Chequers in 2010, when they kicked back watching episodes of Midsomer Murders. ‘Just think, all this could have been yours,’ Cameron had joked.7 After a lunch in Berlin, Cameron thought she was on-side, but she then went behind his back to do a deal with the French. A senior diplomat said, ‘We didn’t know what was happening, not even through covert channels. We were completely screwed over.’ Cameron, realising he had been ambushed, called to warn Merkel, ‘I’ll have to veto.’ She replied, ‘In that case I’ll have to do it without you.’8 On the evening of 8 December Cameron went alone into the summit room with twenty-six other leaders and found himself in a minority of one. At 4 a.m. he walked out.9

‘We renamed it a veto to claim it was a veto,’ one Downing Street aide recalled. Cameron’s refusal vetoed nothing. The other twenty-six nations simply signed a separate treaty outside the EU apparatus. But Cameron was lauded at home as a latterday Thatcher, standing magnificently alone against the tide of integration. A Number 10 source recalled, ‘Firstly, he never thought he was going to veto it. It was initially, “Oh fuck, what have we done?” Then the polls went up. It was a completely accidental triumph. The Foreign Office thought it was the end of the world.’ The veto affair showed all too clearly that, despite her warm words, Merkel would not deliver for Cameron if she thought Germany’s national interest and the good of the EU lay elsewhere. It was a lesson Cameron would have done well to learn there and then.

Cameron’s honeymoon with the sceptics was brief. In June 2012, with Downing Street on the back foot over George Osborne’s so-called ‘omnishambles’ budget, one hundred Tory MPs signed a letter, penned by Basildon MP John Baron, calling for legislation guaranteeing a referendum in the next Parliament. Two days later, at a summit in Brussels, Cameron rejected that plan. The Eurosceptics went into meltdown. ‘The PM and the chancellor looked like they were seriously losing authority over the party,’ a Downing Street source remembered.

In a bid to clean up the mess, Cameron wrote an article for the Daily Telegraph saying he was ‘not against referendums on Europe’, but that the time would not be right for an ‘in/out’ vote until Britain had ‘define[d] with more clarity where we would like to get to’.10 It was the first public expression of his desire for a new deal. Once again he had edged closer to a destination he did not desire, in order to placate people whose support he did not really want. Once again he had neither settled the issue to the satisfaction of his critics, nor properly confronted them. When Cameron told Nick Clegg about the article, the deputy prime minister told him he was ‘crazy’ to think he could buy off his critics. ‘I have to do this,’ Cameron insisted. ‘It is a party management issue.’11 Viewed after the political bloodbath that followed, the notion that holding a referendum might calm Tory divisions was farcically naïve.

It was the rise of the UK Independence Party (Ukip), and growing concern about immigration, that finally forced Cameron’s hand. The eurozone crisis sent unemployment soaring, inspiring hundreds of thousands of people to flock to Britain to find work. Cameron’s pledge to reduce net annual immigration to the ‘tens of thousands’ a year became untenable. The pressure this brought to bear on public services, coupled with the growing public view that yet another politician’s promise was worthless, was deftly exploited by the blokeish but charismatic Ukip leader Nigel Farage, whose ‘people’s army’ combined traditional EU constitutionalist pub bores with an anti-establishment grassroots movement that tapped into broader discontent with the Westminster elite. With the Liberal Democrats as partners in the coalition government, Farage was able to hoover up protest votes which traditionally went to the third party. By the autumn of 2012 Ukip were the third party, consistently above the Lib Dems in the polls. In November Ukip grabbed second place in two by-elections in Rotherham and Middlesbrough. Cameron decided he had to act. He would have to enter the 2015 general election campaign with a pledge to hold a referendum.

Andrew Cooper, the pollster who was a key figure in driving Tory modernisation, said, ‘Ukip, who nearly won the European elections in 2009, were very likely to win the European elections in 2014. We’d have been in meltdown and ended up being forced into a referendum commitment.’ He told Cameron, ‘Since it is a question of when, not if, let’s do it now, let’s do it calmly and set out a proper argument.’ The prime minister saw the logic in this. As another member of his inner circle put it, ‘There is an element where David thinks when the big judgement call needs to be made, “Put your balls on the line, let’s do it.”’

Once again, George Osborne was the most outspoken opponent of the idea. His father-in-law David Howell – a cabinet minister under Margaret Thatcher – told a Conservative activist that the chancellor ‘implored’ Cameron not to hold a referendum. Once again his objections were dismissed. In secret, Ed Llewellyn, the chief of staff in Downing Street, began work on the most important speech of Cameron’s career.

By now some of Cameron’s closest allies, including Steve Hilton and Oliver Letwin, were flirting with leaving the EU altogether. Most significantly, at the party conference in October, education secretary Michael Gove told journalists from the Mail on Sunday that on the current terms of membership he would vote to leave. Despite his resolute Euroscepticism, Gove, like Osborne, was a firm opponent of a referendum. He had two concerns. Even at this early stage he was worried that he ‘would have to stand on a different side to the prime minister’, which would be ‘painful’. He also felt that Cameron had not worked out what his strategy was, and what Britain wanted out of Europe. Gove saw a pattern where the prime minister sought confrontation with the sceptics, told them ‘You’re all lunatics,’ refused their demands, and then ‘caved in’. A source close to Gove said, ‘Throughout the time, Michael thought this whole thing was a recipe for disaster. What we’re not doing is thinking through what Britain will be outside the EU, we’re adopting a bunch of tactical strategies to stave off either Ukip’s growth or our backbench problems.’

Gove went so far as to put these concerns in writing, emailing Cameron before the speech to tell him, ‘You don’t need to do this, you don’t need to offer a referendum.’

‘Don’t worry, I know what I’m doing,’ came the breezy reply.

Angela Merkel’s views were assiduously sought before the big speech. A Downing Street aide recalled, ‘We were paranoid about this thing going off completely half-cocked, with Merkel and [French President François] Hollande going out the next day to say, “This is a pile of absolute shit, Britain is going to get nothing from this.” A lot of work was going into at least making sure they didn’t blow the idea of negotiations out of the water.’

The prime minister gave Merkel dinner in Downing Street on 7 November, at which he explained, ‘I’ve supported our membership of the EU all my political life, but I am worried that if I don’t get the reform objectives I’m setting out, I won’t be able to keep Britain in.’12 Merkel called Britain Europe’s ‘problem child’,13 and urged him to ‘couch the speech in an argument about Europe having to change’ – in other words, a better deal for everyone. A Number 10 official recalled, ‘The strategy was always: schmooze the pants off Merkel, get that locked down and then everyone else will fall in behind. It was damage limitation with the French. You got the sense that she was never wholeheartedly embracing it. The best you could hope for was that she could accept the political argument for him doing it and not stand in the way.’

After several delays, the speech finally went ahead on 23 January. Cameron actually struck a notably pro-European tone, praising the EU for helping to raise Europe from the grip of ‘war and tyranny’. But it was an argument couched in Macmillanite practicalities: ‘For us, the European Union is a means to an end – prosperity, stability, the anchor of freedom and democracy both within Europe and beyond her shores – not an end in itself.’ He warned, ‘democratic consent for the EU in Britain is now wafer-thin’.

Cameron spelt out his demands: more competitiveness and the completion of the single market, an end to ‘one size fits all’ integration. He said this would mean Britain abandoning the goal of ‘ever closer union’ written into the Treaty of Rome. He added, ‘Power must be able to flow back to member states, not just away from them,’ and called for ‘a bigger and more significant role for national parliaments’. Finally, he demanded new rules that ‘work fairly for those inside [the euro] and out’. Heeding Merkel’s advice on how to pitch his call for reform, he said, ‘I am not a British isolationist. I don’t just want a better deal for Britain, I want a better deal for Europe too.’

Largely forgotten afterwards, Cameron predicted that ‘in the next few years the EU will need to agree on Treaty change’, gifting him an occasion when Britain could get its new grand bargain. But when Germany cooled to that idea, his leverage was removed. Also forgotten, given how central it became to his deal, the speech included not one reference to immigration or migration.

Coming to the crux of the matter, he declared, ‘I am in favour of a referendum. I believe in confronting this issue – shaping it, leading the debate, not simply hoping a difficult situation will go away.’ Those looking back at the speech after the referendum would have been amused to find this entreaty: ‘It will be a decision we will have to take with cool heads. Proponents of both sides of the argument will need to avoid exaggerating their claims.’ Nevertheless, Cameron vowed that if he got the deal he wanted, ‘I will campaign for it with all my heart and soul’.

The speech was met with a rapturous reception at home, where the sceptics seized on one key phrase: ‘We need fundamental, far-reaching change.’ When he entered the Commons chamber for PMQs later that morning he was met with a barrage of cheers. The Eurosceptics had got what they wanted.

Speaking in 2016, a Cameron aide said his main error was to lay out ‘red lines’, but not to use the speech to level with voters and his MPs that it was a starting point for discussion with Brussels, rather than an inviolable text. ‘The problem was that we didn’t make arguments like “We’re going to have to compromise,”’ a senior figure in Number 10 said. ‘It was a huge error.’ The Palaeosceptics who rejoiced at the speech were like Biblical or Koranic literalists – they planned to hold Cameron to every word of it. Bernard Jenkin seized on the comment that national parliaments were ‘the true source of real democratic legitimacy and accountability in the EU’, and warned Cameron, ‘You’ve really got to deliver on this otherwise the Conservative Party will tear itself to pieces.’ Cameron’s response was to wave his hand dismissively and say, ‘When the referendum comes the party will split, and that’ll just have to be that.’ To Jenkin the prime minister had the air of a man who had made the promise of a referendum that he never thought he would actually have to deliver, since by now few thought the Conservatives could win an overall majority at the 2015 general election and govern without the Lib Dems, who may have sought to veto any referendum. Iain Duncan Smith, the work and pensions secretary, said, ‘I have no doubt that the thinking in Downing Street … was that the outcome was likely to be a coalition government and … that this referendum would be traded away.’14

For once, though, Cameron had gone far enough to satisfy the bulk of backbench opinion. He had adopted a position sufficiently robust to prevent the party disintegrating before the general election. For almost two years the Tory troublemakers, to adopt the classic dictum, would direct most of their piss outside the tent, and when they seemed in danger of misplacing the urinal – introducing a Private Member’s Bill to hold a referendum – Cameron ended up adopting the Bill. But he was soon to discover the accuracy of one minister’s theory of parliamentary urinators: ‘Westminster is not divided into people inside the tent pissing out and people outside the tent pissing in, it is divided into people who piss and people who don’t. It doesn’t matter where the pissers stand, the piss always gets into the tent eventually.’ As a description of what Cameron’s Bloomberg speech set in train, it was hard to top.

The key question from this period is: could the referendum have been avoided, and if it could not, did Cameron have to offer an in/out vote by the end of 2017? When the cabinet was informed of the decision it horrified the veteran Europhile Ken Clarke: ‘I was not consulted. I read about it in the newspaper. We had a row about it, but it was a done deal. I think it was the most reckless and irresponsible decision.’15 Yet even a dyed-in-the-wool Europhile like Alistair Burt gave Cameron the benefit of the doubt: ‘I don’t blame the prime minister for calling the referendum, because you can’t keep the people hostage, and it was important, not just for party management but important for the country, that the people had this vote.’ There were practical concerns too. David Lidington, Cameron’s Europe minister, said, ‘Had he not promised the referendum, I think it would have been hugely difficult to win the 2015 general election at all.’

Cameron’s aides believed failure to announce a referendum would have led to a leadership challenge when Ukip won the European elections in 2014. ‘The idea that the PM was going to survive and face down his party is for the birds. We would have had a new leader coming in saying “I’m going to call a referendum,” and probably saying they were going to back Brexit,’ one said. The pollster Andrew Cooper agreed: ‘If he’d taken the party on, I think he would have lost. Ukip was on the rise, the party was in revolt.’

Yet one of Cameron’s closest aides believed that he may have stepped back from the brink if the Bloomberg speech had come after the Scottish referendum in September 2014, which uncorked the uncontrollable passions about which George Osborne had warned: ‘After the Scottish referendum experience we realised you’re unleashing things you can’t control. That’s the one thing I’d say would have changed our mind.’ By the time Tory high command collectively came to recognise the risks, it was too late.

If Cameron had to offer a referendum, he did not have to offer an in/out referendum. A group of Eurosceptics – Bill Cash, Bernard Jenkin and John Redwood – went to see the prime minister before the Bloomberg speech to suggest he lance the boil by holding a ‘mandate referendum’ with the question ‘Do you agree that the United Kingdom should establish a new relationship with our European partners based on trade and cooperation?’ Cameron was at first interested in the idea, but later asked, ‘Who’s going to oppose that?’ Jenkin replied, ‘Exactly!’ But Cameron saw the plan as potentially dangerous. He did not believe Britain’s links to the EU should be confined to trade. Jenkin said, ‘That referendum question, if approved, would have been completely incompatible with our present terms of membership. So he shied away from that and went for the in/out referendum.’

There were other options. Cameron could have devised his own mandate referendum, giving him licence to secure a deal when a treaty was next agreed. He could have defied the Liberal Democrats and begun a process of renegotiation with Merkel over a number of years, blaming his coalition partners for the lack of an immediate vote. He certainly did not have to say that there would be a referendum before the end of 2017. He could even have attempted to face down his party and confront their arguments. But in truth he had set himself on the path of tactical retreat from the moment he agreed to pull the Tories out of the EPP during his leadership campaign.

In calling for ‘fundamental, far-reaching change’ of Britain’s relationship with the EU, the Bloomberg speech raised expectations that would be very difficult to meet. To get what he wanted from the other member states and keep Britain in Europe, Cameron had to persuade them that he was prepared to leave, a posture that was regarded as incredible by the sceptics at home, who demanded that he threaten to lead the UK out, while telling the world that he was only bluffing. As Tony Blair was to remark, ‘David Cameron’s strategy is a bit like the guy in Blazing Saddles who says, “Put your hands up or I’ll blow my brains out!”’16

Rising immigration, fuelling the rise of Ukip, had led to Cameron’s referendum pledge. By mid-2014 it was clear that measures to curb immigration would also have to be the centrepiece of his new deal with Brussels. According to the official statistics, net migration to the UK was 177,000 in 2012, rose to 209,000 in 2013, before soaring to 318,000 in 2014. Those figures would have been politically damaging in their own right, but juxtaposed with Cameron’s long-standing pledge to limit net migration to the ‘tens of thousands’ they were explosive. As the figures rose, so too did support for Ukip. ‘The thing which turbocharged Europe was the massive jump in EU migration,’ a Cameron confidant said. ‘That’s what turned it from a niche Tory issue into a massive popular issue. The biggest problem with renegotiation was that it was absolutely clear we needed to control migration.’

The prime minister recognised the dangers, and used his speech to the Conservative Party conference in October 2014 to deliver a bold pledge: ‘Britain, I know you want this sorted so I will go to Brussels, I will not take no for an answer and – when it comes to free movement – I will get what Britain needs.’ The pledge was more than ambitious; as expectation-management went it was reckless, as Cameron would discover. Will Straw, who was to end up running the Remain campaign, said, ‘He promised his grassroots more than he was ever able to achieve.’

The first effort to tackle the issue came a month later, in November 2014, when Cameron made a speech at JCB, the construction-vehicle manufacturer owned by his friend Anthony Bamford. The preparations for that speech led to another psychodrama with Merkel, serious clashes between Cameron’s political aides and the civil service, a showdown with two of his most senior ministers, and did more to shape the final renegotiation deal even than the Bloomberg speech.

At heart, Cameron had two options: limit the number of EU migrants coming to Britain, or reduce the pull factors by cutting the benefits to which they were entitled. Iain Duncan Smith, the work and pensions secretary, and Michael Gove, by now the chief whip, pushed for quotas on the number of EU arrivals. The problem was that this flew in the face of the fundamental EU principle of the free movement of people. On 19 October the Sunday Times revealed that Cameron was considering ‘an annual cap on the number of National Insurance numbers given to low-skilled immigrants from Europe’. Cameron blamed Gove for the leak. But at an EU summit later the same week, Merkel told the paper’s Brussels correspondent Bojan Pancevski, ‘Germany will not tamper with the fundamental principles of free movement in the EU,’ words that killed the idea stone dead when they were splashed on the front page.17 In a confrontation with Cameron in the British delegation’s room, Cameron explained that he needed a quota system or an emergency brake on numbers: ‘If I could deliver clear demonstration of grip with controls even if those were for a temporary period, I think I can crack this. But otherwise this is becoming an unsustainable position.’ But Merkel told the prime minister, ‘No, I’d never agree with that. No. No. No. No way. Never, David.’ A source present said, ‘She was being as unequivocal as I’d ever seen her, completely clear. And that’s what took us to the benefits route.’ Merkel had grown up under communism in East Germany. She was not prepared to compromise on the freedom to cross borders, which she had been denied for the first thirty-five years of her life.

The leak torpedoed a secret plan Oliver Letwin and a small number of Cameron’s political advisers had been working on since July without the knowledge of civil servants. A Cameron adviser said the civil servants ‘went nuts when they found out – but they never understood the view that we would struggle to win a referendum without a very serious immigration answer’. Cameron’s policy staff then devised a time-limited ‘emergency brake’ which Britain could pull in extreme circumstances to halt EU arrivals. But the plan sparked some of the most heated rows between the politicos and the career diplomats and civil servants led by Ivan Rogers, Britain’s ambassador to the EU, Cameron’s civil service EU adviser Tom Scholar, and William Hague’s special adviser Denzil Davidson. ‘There was opposition from the civil service,’ said a Downing Street aide. ‘The FCO’s approach was that this was completely unobtainable: “You’ll get outright rejection.”’