For the past two decades, ever since jettisoning its anti-European policy of the 1980s, Labour’s approach could charitably be described as “milk and water” pro-Europeanism. This encompasses no question of pulling out of the European Union and better behaviour than the Tories towards its institutions. There has been a consistent agenda promoting the model of Anglo-Saxon capitalism and enlargement almost without geographical limits. Damage limitation was organised on constitutional reform and a broader social agenda.
So Labour has been in the forefront of strong competition policies, light-touch EU regulation and open trade agreements, but well in the background on a more political agenda for Europe. That includes any strengthening of EU institutions or tempering the internal market with high, common social standards.
In office, this policy was pursued efficiently – for a time. Tony Blair presented it with his customary brio at the European Parliament in 2005, trashing the European social model while he was at it.
That oratorical triumph and the policy victories it trumpeted were short-lived. Within three years, the benefits of deregulation and unfettered competition seemed as hollow in Brussels as they do in Britain. Now the question is more how much you can regulate nationally and how much in Europe or globally, not whether you should leave everything to the market. Similarly, as the prospects for binding international agreements on climate change recede, those who argue that the EU should use the leverage from its dominant trading position to promote global environmental standards may no longer be so easily dismissed as protectionist cranks.
A constant over the past decade was the automatic support across the policy range for the American position rather than the European one. The aim was to safeguard the so-called special relationship. That has foundered, as it finally dawns on us at that, as far as the United States is concerned, nostalgia and sentiment are always secondary to national interests. The EU’s humiliating marginalisation at the climate conference in Copenhagen was perhaps the most blatant example of this.
Labour does not have the luxury of a leisurely rethink. The European agenda is not on hold until the coalition Government falls. Two issues require the party to take a stand.
First, the euro. Not even the most fervent Europhile thinks now is a good time to join. In any case, this country does qualify for membership. But we should not be afraid to make some key points. The euro is not the cause of the debt crisis in Europe. Countries in the eurozone are under speculative attack from people of the same ilk as those who brought the world’s financial system to the edge of the precipice. We should know which side we are on. The collapse of the euro (still highly improbable) or its weakness with stagnation in most of its economies over the next decade (far more likely) would do serious harm to the British economy.
Europe is by far our largest market. That means “Thank goodness Gordon Brown kept us out of the euro” is no substitute for serious policy. Labour must be active in the European debate, support a Eurobond issue and encourage the European Central Bank to buy up sovereign debt. It should add its voice to those who say the hegemony of speculators is a challenge to democracy. In the argument over deficit reduction, Labour should side with those calling for a European growth strategy to provide the hope for jobs that the national cutbacks threaten. Second, in 2011, the EU will begin negotiating the financial framework from 2013 onwards. The skirmish over this year’s budget was merely a foretaste. Already the British Government has started calling for real cutbacks in EU spending, making a phoney comparison with national finances.
In reality, Britain and France will look to cut a deal. We won’t push too hard on reform of the common agricultural policy if the French will support yet another prolongation of the rebate first negotiated by Margaret Thatcher.
Such a mediocre compromise would mean another opportunity for reform missed. The EU budget can have added value through structural policy spending, and through research and development. That will not happen if the EU continues to fritter away huge sums on price subsidies to wealthier farmers.
If the EU budget is to stimulate growth and competitiveness, it needs new revenue. There should be some form of green taxes. If Labour takes the line of least resistance, makes the rebate a sacred totem or supports an assault on EU spending, it will effectively align itself with those who want no reform and would deprive the EU of the means to help job creation.
Above all, Labour must decide if it wishes to be fully integrated into the European socialist movement. That means being fully committed to the parliamentary group, so that Labour MEPs are no longer pressured into breaking progressive ranks on social, employment and budgetary issues. In the wider European party, it means Labour placing itself in the forefront of democratic change and the campaign for a more distinctive, progressive agenda. Alternatively, it can continue to try to appease the likes of Rupert Murdoch, the Daily Mail and sundry Eurosceptics. Ed Miliband and his party must decide – and soon.
Julian Priestley was secretary general of the European Parliament from 1997 until 2007
