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Wednesday, September 28, 2011

Does Labour have an EU policy?

The Labour Party conference has provided a belated opportunity to focus on the opposition party’s policies, and our interest naturally gravitated towards what Eds Milliband and Balls would have to say on the UK’s relations with the EU, and crucially their views on the burning issue of the eurozone crisis.

An early indication of Labour’s attitude towards the EU in opposition came from Lord Maurice Glassman (pictured), tasked by Miliband to develop a new intellectual framework for the Labour Party. Glassman’s ‘Blue Labour’ critique took aim at many targets (with no quarter given), including the EU, in particular its dominating legalistic institutions (a criticism we share) and the free movement of people and capital (which we think on the whole has benefited the people of Europe).

Ed Miliband, Ed Balls and other key Labour players have been busy developing this argument at party conference, in particular emphasising they had been wrong to allow unhindered access to the UK’s labour market to the eastern Europe accession countries in 2004. In an interview with Sky News, Miliband said: “We got it wrong in a number of respects, including underestimating the level of immigration from Poland, which had a big effect on people in Britain”, while Hazel Blears claimed that Eastern Europeans claiming generous UK benefits “creates a real sense of grievance and justifiably so” (even if research has shown immigrants are less likely than natives to receive state benefits or tax credits).

On the eurozone crisis, shadow Chancellor Ed Balls somewhat bizarrely argued (15 mins in) that Greece, the country at the centre of the problems did not have a debt problem:
“The crisis in Greece is fundamentally caused by the euro, an assumption about the interest rate which has turned out not to prevail… its not a crisis caused by debt, it’s caused by a liquidity crisis caused by a global financial crisis and a failure of the eurozone to act.”
While we certainly echo that the euro is a major problem, Balls appeared somewhat confused on the nature of this crisis. In fact, he may well find himself in a minority of one if he genuinely believes Greece is facing a liquidity rather than a solvency crisis. The markets (and increasing numbers of eurozone policymakers) know that Greece cannot sustain its debt burden in the long term, and are waiting for the inevitable default, something Balls did not mention.

Finally, in terms of gauging Labour’s general approach to EU issues in opposition, Miliband broadly backed the coalition government’s approach, saying that:
"We want a Europe that works for people in this country and I think that's the most important thing… let's get stuck in, let's engage and let's get Europe to grow. That's the priority, not referenda or constitutional changes or any of that stuff.”
While the reflection and internal debate is very welcome, as the Spectator’s Coffee House blog notes, “despite the interventions from Miliband and Balls, the party is bereft of a policy in this area”. And anyone wanting to get an idea of the Labour party's vision for Europe would have been disappointed by Miliband’s leader’s speech this afternoon, which barely referenced the EU or the eurozone. In fairness, Labour's Shadow Europe Minister Wayne David did say some encouraging things at a recent Open Europe event on EU justice and home affairs, which suggested he would press the Government on this issue, although again, he was vague on what specifically a Labour government would do. David has recently also gone pretty hard on the proposed increases to the EU budget.

Needless to say, given the crucial and fast-moving nature of events currently unfolding in Europe, it is vital we have an opposition that sharpens its focus and is able to hold the government to account.

We have a feeling that it's in the area of free movement of people and workers that Labour could face it's greatest temptation to move in a more populist direction...

1 comment:

Robert Snare said...

This blog should have been more aptly titled “Does anyone have a credible policy?” to resolve the Eurozone problems. However, sticking with Labour for the moment, I recall exactly it was the Labour Government that curtailed full discussion of the Lisbon Treaty in Jan/Feb 1998 by the use of the guillotine.
As a consequence whole tranches of legislation in foreign affairs, defence, immigration and justice, including the European Arrest Warrant, were swept through without any amending legislation. It was to her great credit that the great constitutional MP Gwyneth Dunwoody made her most memorable speech on the illegalities of the enabling process only months before she died. Her speech which is on Hansard record, is equivalent to the speech made by Colonel Collins to his men before they engaged in the Iraq conflict. I certainly recommend it as required reading for any person seeking to be a British MP.
I contrast her attitude to that of an indolent Geoff Hoon casually leaning on the despatch box and languidly assuring everyone that it was only xenophobes that could possibly disagree with an unelected United States of Europe. He was followed by Jim Murphy, who I am convinced had never even read the Lisbon Treaty. Given their thirteen years in power Labour have a lot to answer for and any credible policy now should seek to reverse their stance and give a cast iron in or out referendum guarantee. The true answer to Labour’s dilemma however, would be to demand a complete discussion and re-negotiation of the Lisbon Treaty in Parliament.
As for the Eurozone itself, how can any sense be made of an unelected institution which does not even abide by its own rules, in using legislation intended to provide cover for countries afflicted by natural disasters to be used for the current bail out. Greece was accepted into the Eurozone in the full knowledge that it did not in any way comply with the entry requirements. In this it was allegedly assisted by Goldman Sachs granting undeclared loans, and still no prosecution has been taken out to investigate the circumstances and establish the accuracy of such innuendos. What happened to the EU finance due diligence procedures?

The one good point about Labour policy was that even they, despite the implicit approval of the Liberal Democrats, and much of the Conservative Europhiles, did not take Britain into the Eurozone. In modern terms and scale of finance, Greece is little more than a failed bank and as such should be allowed to fail now and revert to its own currency.
Anyone who has been made redundant is aware of the alacrity of the mortgage lender to enquire as how future mortgage payments are to be made. They are certainly not in the business of providing further loans in the hope that eventually the mortgagee may one day be in a position to repay an even bigger loan.
Europe is going to be totally transformed over the coming twelve months and much of it will not be very pleasant. If Labour genuinely believes it should be the Government of the people and for the people, then it should start by having a frank reassessment of the European Commission and its adverse impact on the majority of British workers.