Denis MacShane: This world image of an isolated Britain is a disaster

The decision of the Prime Minister not to allow Britain to take part in negotiations on the euro crisis was not a veto as there was neither a new treaty or even a final settlement to say yes or no to.

But it was a clear message that he would remain true to his party just as his predecessors refused to abolish the corn laws until Sir Robert Peel came along or refused to allow Ireland to govern itself until a bloody war of independence settled the matter in 1921.

It is important to stress English politics as the decision of the Prime Minister to isolate the country from the next stage of European development will encourage those in Scotland who want to see an independent Scotland firmly inside the EU offering itself as a location for inward investment to US and Asian firms that want to do business in the world’s biggest market.

On Saturday, I bumped into William Hague and his delightful wife Ffion on the 8.30 from King’s Cross as we all headed north to our constituencies. He was busy with reading his newspapers and a fat red box of papers so I just saluted him. William, as friendly as ever to the MP from his home town of Rotherham, said “hello” with his engaging smile. “Interesting times,” I said. “Indeed, indeed,” he said looking relaxed in an open shirt without a care in the world.

Hague, like his successor as Tory Party leader, Iain Duncan Smith, must feel utterly vindicated in their long-held view that Europe was a problem from which England should disentangle itself. Hague, after all, warned voters that if they supported Tony Blair in 2001 “Britain would become a foreign land”. The Foreign Secretary was with David Cameron in Brussels and would have stiffened his resolve to turn his back on the other EU leaders.

To begin with, the deal was presented as the Eurozone 17 plus others, but a significant bloc of countries – including Sweden and Hungary – were said to be siding with Mr Cameron. Alas, the British-Hungarian Empire lasted only four hours as the world realised that Britain was alone as the other 26 countries were willing to negotiate.

The New York Times described the outcome as “Britain is isolated” as Europe moves forward. In fact, the word “isolation” appeared in nearly all the headlines of the European Press. In Rotherham over the weekend, I noticed posters calling for a referendum with a picture of the EU as a barbed wire concentration camp. They came from the Yorkshire MEP who represents the BNP. At a time when we need inward investment more than ever, a world image of an “isolated” Britain is a disaster.

These are just a symptom of the generalised economic and political crisis Britain and most Euro-Atlantic economies are going through. Yet the paradox for Mr Cameron is that this should be a Tory heaven of a Europe.

Unlike Margaret Thatcher, who had to deal with the socialist Francois Mitterrand or the centre-Left Jacques Delors, today’s Prime Minister has a Europe utterly controlled by centre-Right parties producing solutions which are aimed at reducing public expenditure, weakening trade unions and imposing classic conservative fiscal rigour.

But the colossal blunder of pulling out of the alliance with other centre-Right parties to enter into partnership with what Nick Clegg calls “nutters, anti-semites and homophobes” has left Cameron without political pull or networking possibilities. Pro-Brit countries like Poland, Sweden or the Netherlands are aghast. The most important meeting in Europe last week was in Marseilles, attended by US Treasury Secretary, Timothy Geithner. It was the political gathering of centre-Right parties and the Presidents of the EU Commission and Council which decided the line to take in Brussels. The UK was not there.

Tony Blair and Gerhard Schröder struck a mutual veto deal against EU directives which prevented London and Berlin from facing rules they opposed. Such a deal could have been on offer to David Cameron but it means doing politics in Europe rather than striking Eurosceptic postures in London. Margaret Thatcher engaged positively in Europe, winning the Single European Act and the rebate. But she took care never to be isolated and she could point to economic growth rather than the no-growth, high unemployment George Osborne’s policies have brought about.

The other big losers are the Lib Dems as Nick Clegg blusters but has lost all honour and self-respect as he hangs onto his red box rather than his principles. Today, anti-EU Tory MPs are cheering as they jeer at Europe. This may yet change.

Denis MacShane is MP for Rotherham and a former Europe Minister