John Major gave the kind of speech on Europe last week that only someone like him can do. It has been rightly acknowledged by many commentators as an extremely clever intervention. He gave a speech admonishing both sides of the debate on the EU and he deserves to be listened to. The former Prime Minister has no career ambitions so he can be free to question government policy. But more importantly, he is also someone who has successfully done what David Cameron says he is striving to do.

In 1991 he managed to pull off two magnificent victories in negotiations with the EU over the Maastricht Treaty. One was that the UK could have the choice to opt out of the Euro when it happened. The second was the choice to opt out from social legislation. Major struck off the aim of a ‘federal goal’ for Europe (effectively becoming one country) and got that changed to a goal of ‘ever closer union’, which at least allows countries to retain a semblance of sovereignty. The opt out from the Euro has of course been stuck to, which has been a particularly good choice during the recent Euro crisis. But Tony Blair chose to opt back into the social legislation.

Major achieved these aims by building excellent working relationships with the main people that he needed to convince at the time, which included Helmut Kohl, the then German chancellor. David Cameron needs to learn from this in particular. He is spending far too much time shouting in an attempt to stroke the egos of the Eurosceptics on his party, and win back those who have already left for UKIP. He should spend more time building strong relationships with Angela Merkel in particular. Because, as Major pointed out, Merkel needs him.

Yes, the EU needs the UK within it. It needs the UK’s financial strength, it needs the UK’s military strength, it needs the UK’s demand and it needs the UK’s supply.

Major also pointed out the problem with the position of those who want to withdraw from the EU. Being outside the EU, needing to make trade deals with it but having no influence on the rules that govern those trade relationships (which is the situation Norway is in), would be an unsatisfactory position to be in.

He also made plain the falseness of the position that it is impossible to change the “pillars” of European Union whilst remaining inside the Euro. The anti-EU movement AND those who are true believers in the EU ideal insist for instance that the freedom of movement of workers cannot be violated as it is a “pillar” of the Union. Major listed all the other “pillars” that have been merrily violated since 1991 to show that plenty is possible within the EU if there is a practical reason for doing so. For instance, the EU Stability and Growth pact (all countries should have a deficit of 3% of GDP and debt of 60% of GDP) went by the wayside when it became inconvenient, in particular for France and Germany but even more so when the Eurozone fell into recession in 2008.

There is now a practical reason for having a fresh look at the freedom of movement of workers. The reason is this…if it isn’t properly looked at, the UK might leave. Because the UK is a democracy, and in our democracy there is now legitimate concern about the quantity of immigration into our country, which will become even more sharp as our relative economic prosperity grows. So any UK government that gets elected in 2015, even Labour, will most probably arrive with a mandate to Iimit the rate of immigration. The rest of the EU may have to come to terms with that, however much they hold dear the freedom of movement of workers.

Major left his crudest point to last though. Given France’s current slide into economic oblivion, if the UK leaves the EU, Germany gets left holding the purse strings, as overwhelmingly the greatest power in Europe. They would have to be the sole fiscal disciplinarians in Europe without the UK’s support, and that will not be a pleasant position to be.

Put all this together and the only way forward that will benefit both sides is a negotiated solution. Life for UK outside the European Union but bound by its rules would be quite intolerable, life for the EU with the UK outside it, particularly in terms of their negotiating position in global terms, would be just as intolerable. So let’s get to it.