The debate over the UK's relationship with the EU has stepped up. The PM has adopted the position of negotiating with the EU with the threat of an in-out referendum in his pocket. Personally, I think Cameron is just about in the right position, in theory. As Eric Pickles has argued, quite sensibly, EU membership should be on a cost-benefit basis. If it is clearly the case that withdrawal would benefit the general good more than remaining in the EU we ought to withdraw and vice-versa, regardless of any special-interest privileges.

Whether Cameron can make this work in practice is unlikely. After all, the EU is a large and growing bureaucratic institution with many vested interests operating within it - bureaucratic powers are unlikely to be ceded any more easily in Brussels than they are in Whitehall.

The finer points of the political debate notwithstanding, there is definitely something missing from the debate. On the one hand, there stands a massive, wasteful, unresponsive bureaucracy led by profilgate politicians in hoc to special interests. On the other hand, there is the EU. The problem with the EU is not that it has absorbed powers which should be vested in Whitehall but that these powers are vested in any government whatsoever. The principle of subsidiarity should be extended to its ultimate conclusion - the proper authority for all bar a few aspects of socio-economic life must rest with individuals, not governments be they local, national or supra-national. What the UK and the EU needs is not repatriation of powers but (to coin a clumsy neologism) 'depatriation'. There is no point removing powers from Brussels and handing them over to politicians and bureaucrats in the UK. These powers should simply be handed back to where they belong, in the hands of individuals.

I would be very happy to be a fully paid-up member of an EU and even a Eurozone that, say: operated a sound, gold-backed currency, ferociously enforced fiscal discipline, liberated markets, open doors to trade and migration, drove privatisation and de-regulation across all areas, decriminalised drugs (well said the Lords [3], on that subject) and generally pursued free-market and classical liberal policies.

Sadly, that's just wishful thinking but it is not as if the British government under any party is likely to follow this course either. On balance, especially given the nature of many EU governments and societies and the EU itself, it is probably more likely that this would occur under a UK government than under a federal EU one even if the UK's track record on this score is fairly poor. Ultimately, Britain faces a Hobson's choice between large and profligate EU governance and large and profligate British government whilst under present conditions it is saddled with both.