There’s a flaw in your plan, Baldrick

David Cameron and George Osborne urge our European partners on to a fully fledged fiscal union to save the continent. But supposing Germany’s Angela Merkel changes her mind and decides to underwrite bankrupt southern Europe with Frankfurt-backed eurobonds? The federalist framers of the single currency always hoped that a crisis would lead to a United States of Europe.

Under this rosy scenario a solvent Britain that cleaves to the pound would find herself thrust a million miles away from the heart of Europe.

Britain’s diplomacy has clocked up one triumph in Brussels — or two, if you count the creation of the single market (although that is more honoured in the breach than the observance).

We ushered the former Soviet satellite countries into the European Union. That gave stability to their young democracies and, more cynically, it made the EU so big and unwieldy that even the Franco-German axis couldn’t quite dominate it. A real political union puts us back at square one.

The domestic consequences of European turmoil are ambiguous. In this climate of fear, our double-dip recession might be the precursor to a more spectacular crash. The Labour party will, ever so quietly, be praying that a further tightening of the screw will force the chancellor off plan A, the coalition’s commitment to deficit-cutting.

In this climate of fear, our double-dip recession might be the precursor to a more spectacular crash At one level this is classroom politics; at another it is deadly serious. Having broken Cameron’s cool at prime minister’s questions by making flatlining gestures with his hands and picking up imaginary wine glasses, Ed Balls, the school bully, is plotting to flick pen tops at him, as he is told that’s what drives the prime minister mad at meetings.

If Osborne were to adopt plan B — a boost to public spending and borrowing — he would concede the entire economic argument upon which this shaky government stands.

That would be the biggest U-turn of them all. There would be a hail of pen tops pinging their way across the floor of the Commons.

No 11 is therefore adamant that no such pirouette will be performed. Stand by, though, for plan A-plus: more imaginative ways will be required to pump credit to business, encourage house-building and roll out infrastructure projects.

Besides, the ill wind of the euro hurricane won’t necessarily blow Labour any good. The voters first gave the coalition government the benefit of the doubt on deficit-cutting when their television screens were filled with young men taking to the Athens streets at the start of the Greek debt crisis two years ago.

A second attack of the horrors in Greece spreading to Portugal, Ireland, Spain and Italy might even persuade us that the government is doing a fair job of delaying our descent from the first circle of economic hell to the bottom. A continent in crisis would put the minor embarrassments of the Leveson inquiry and last week’s many budget U-turns out of time and memory. Pasty tax, schmasty tax — who will care about them if there is no French electricity to run our microwaves?

Whether the screw further tightens on Europe or political union staves off disaster, the voters’ Euroscepticism is likely to increase. Douglas Carswell, one of the most astringent Tory out-and-outers, believes we will come to see that “far from joining a prosperous trading bloc, we shackled ourselves to a corpse”.

In No 10 there is gloomy talk that the elections for the European parliament could see the UK Independence party win the biggest share of the vote, followed by Labour, with the Conservatives trailing in third. When Gordon Brown got the bronze in the same elections three years ago, it was regarded as the beginning of the end.

There is a growing call in the big parties for a referendum on Britain’s European membership. Ed Miliband’s new policy czar, Jon Cruddas, already campaigns for an in/out vote “to clear the air”. Other Labour figures are tempted to sign up in order to split the coalition and split the Conservative party. The Liberal Democrats promised one in their general election manifesto (so that probably means they hate the idea).

About 30-40 Conservative backbench MPs want out of the club tomorrow; a further hundred or so are keen to repatriate powers from Brussels. Polling conducted for the Policy Network think tank suggests 56% of voters want a referendum, too.

At No 10 the argument is being aired that it would be better to concede a referendum before the Euro elections to head off UKIP and pre-empt a Labour commitment to a vote. Hitch yourself to the bandwagon before it gets going. The Conservative party also has the range of Hepburn: it only does complacency and panic. Coming third in a real poll, however meaningless, a year before a general election will, in the words of one Cameron confidant, bring on “a complete nervous breakdown”.

Osborne, with his reputation as a winner having taken a battering, will also be tempted to throw his party some juicy red meat. On his mind will be the distant but looming leadership challenge of Boris Johnson, who knows how to appeal to his party’s blood and soil tendency. Can’t let Boris have all the best tunes can we, chancellor?

“Discussions go on between David and William [Hague] and George but there is no safe option,” one No 10 insider says. Most voters will remember they have been promised a referendum year after year. Every time politicians have weaselled out of their commitments. “If you promise one they will say let’s have it now,” the insider adds.

The Conservative party’s position is to repatriate powers from Europe and avoid an in-or-out referendum. Cameron would pledge to renegotiate terms and then put them to the people, rather as Harold Wilson did in 1975. Of course, there are imponderables. Germany and France might simply tell him to get lost.

Alternatively, Tory voters might tell Cameron to get lost too, desiring a complete break with Brussels whatever the renegotiated terms — that would mean goodbye, David. In any case, until the European question was resolved the next parliament would be dominated by it as much as deficit reduction dominates this one.

The voters like a referendum in principle but in practice they wobble a bit. A Populus poll for The Times found 54% of people agree that the euro crisis “makes me less confident that the UK could or would prosper if it withdrew from the EU”.

There is also one possible flaw in this Baldrick-like cunning plan. Imagine the irony of pledging a referendum on Europe to stave off coming third in the European elections — and still coming third in the European elections. Tories could defect to UKIP to remind Cameron to stick to his promise.

The time may be indeed coming when we detach ourselves further from Brussels. But after the Lib Dems’ AV fiasco, the voters have seen through the ploy of referendum as political fix. If the Tories want to play this card they had better really mean it.