My proposal that could keep Britain in Europe

I am now convinced that David Cameron can win the European Union referendum in 2017, so long as the Ukip surge does not hand power to the other guy next May. Why am I so confident? Because I have just spent a few days in the Italian countryside at a conference full of the Europhile great and good, and they have started to bend to the reformist mood.

The EU is struggling with two giant projects – the euro and freedom of movement – which are not working as intended, mainly because as currently designed they are not compatible with national social contracts. And the good news from Britain's point of view is that, at least in the case of freedom of movement, it can be fixed.

This is how: the period before an EU citizen acquires "habitual residence" in another EU country – and thus the full social, welfare and labour market rights of a national citizen – should be pushed back from three months to two years. This is simple and fair and is something David Cameron could gather a broad coalition of EU countries around. Someone from another EU country would still be free to enter Britain and look for a job and use public services from day one; they would not, however, be able to draw on in-work or out-of-work benefits or social housing or any kind of state support until they had been resident for two years. Two years would be a ceiling, if countries want a shorter qualifying period they can have one.

This represents a big symbolic shift and could be sold to voters as a significant British-led innovation. It would restore some "national citizen favouritism" and "earned citizenship" into the system. At the same time, the flows of people probably wouldn't change much. So it could be sold to other EU countries as a minor adjustment and to the British public as a revolutionary change. Perfect!

For some in Britain, it does not go far enough. And there is a case for limiting access to the NHS for a period and even, as No 10 is considering, a Swiss-style "safeguard clause" allowing restrictions if flows get too high.

But the encouraging thing to emerge from my Italian conference is that EU enthusiasts, who in the past would never have contemplated the two-year delay proposal, embraced it when I floated it. (One Scottish Labour peer, the embodiment of progressivism, even wanted three years, not two.) The Italian participants, mainly the kind who prefer to be ruled from Brussels than from Rome, also liked the idea.

This is now the new normal, and Cameron must build on it. One of Britain's problems is that we have had precious little political class consensus on EU policy over recent decades. If Cameron could get agreement on the two-year plan from the Liberal Democrats and Labour, who now talk about "fair movement, not free movement", it would carry more weight with other big EU countries.

David Goodhart is director of Demos