No, not I

Newsnight featured the first televised hustings for the Labour leadership candidates last night - and it now turns out that none of them were ever particularly keen on us joining the euro. Or maybe it’s a case of a Nick Clegg-style change of heart now that it should be crystal clear to everyone that the economics and the politics of the single currency were shaky from the get-go.

Interestingly, Ed Balls made a comment that we can only describe as spot-on. He admitted that sometimes people use that ‘pro-European’ label to push their own political agendas, rather than as any objective measure of commitment to membership and cooperation within the European Union - as was the case with the euro. Such comments would have been very helpful a few years ago - when the undemocratic Lisbon Treaty sailed through the Commons (during which the "anti-European" label was used left, right and centre), but still, it might be a sign that the Labour Party is getting back in touch with popular sentiment (which is always easier in opposition to be fair). It also makes him seem much further to the centre of the party than might have been expected before his leadership campaign began. (That and his intervention last week that transitional controls on migration would be key to any future EU enlargement)

Diane Abbot’s answer was also refreshingly direct and (almost) free of tired platitudes – she even appeared to go so far as to suggest that the euro project was fundamentally flawed (without actually saying it of course), by suggesting that bringing disparate economies together and simply hoping they converge was never going to work.

Ed Miliband said he wanted a "Europe of our values". Hmmm, what exactly does that mean? I wonder if Ed Miliband will be expanding where the Europe we currently have fails to meet his criterion of values - lack of transparency, accountability and democracy, perhaps?

Perhaps they've been reading our briefing on how the EU elite got it so drastically wrong on the euro: http://openeurope.org.uk/research/eurotheysaidit.pdf

Here's the exchange:

Paxo to David Miliband: You must be thrilled that Ed Balls kept us out of the euro?

David Miliband:

“Certainly…I don’t think it was a one man show to be absolutely fair, a bigger effort than that. We were right to stay out of the euro because the economic conditions weren’t right, and said all along, those of us that are strong Europeans, think that the worst thing we could do for Europe would be to put the political aim of working closely with our European partners before the fundamentals of economics, and we didn’t do that and actually we held to the position we set out in the mid-1990s, and it was the right position not to get pushed into that. “

“I think it was a difficult decision, I think it was the right decision –credit to Ed, and to Gordon Brown, and Tony Blair who took that decision, but I think it’s another one where we’ve got to learn the right lessons...”

Ed Balls:

“...but it was difficult at the time because there were some on the pro-european side who said ‘to be pro-european, you must join’. I think the Financial Times and the Economist both said that, but in retrospect, it was right to say the pro-european, pro-growth, pro-jobs position was for Britain not to go in, because if we had it would have been an economic, and therefore a political catastrophe for us, and so the right, hard-headed decision to do was what we finally decided to do in the end."

Andy Burnham:

“As a young backbencher, I had been in Parliament about two years I think, I remember going to a meeting in the House of Commons that Peter Mandelson had organised, to organise the case for the euro and I stood up and spoke against it…Like Ed I spoke up against it at the time – I didn’t believe that it would be in the best interests of the North of England and Scotland, I thought it would be good for the central part of Europe, I didn’t believe that the euro would be good for the whole of the country.”

Diane Abbott:

“The issue about the euro is not nationalism or even regionalism. The issue about the euro was that some people were trying to drive us into the euro for political reasons – the politics of greater European Union, but the economic case never stacked up. That’s what we’re seeing with Greece now – you cannot bring economies that are so disparate together because when hard times strike, things turn into a mess.”

Ed Miliband:

“I think we made the right decision on the euro – I think there is a wider issue though about how we work in Europe, to help people here in Britain. Andy mentioned earlier on the Agency Workers Directive – that would have given greater protection to people who were agency workers and stopped them being exploited at the expense of other workers in our society –we were too slow on that as a government. We should have brought that in, and actually that would have addressed some of the underlying issues that people raised in relation to immigration. So, I think we need to work in Europe, but we need to work for the Europe of our values – and that’s very important.”

Don't go Gordon, all is forgiven!

An interesting piece in the Times this morning from William Rees-Mogg reminds us that Justice Secretary Jack Straw is to introduce an amendment which allows life peers to resign from the House of Lords (it was also reported in the FT a few weeks ago). This would allow Lord Mandelson to resign his peerage, stand for the Commons at the next election (Hilary Armstrong's seat in North-West Durham?) and therefore qualify for the Labour leadership should Gordon Brown stand down after the election.

Far fetched? Maybe so, but it's mouth-watering for the Euro-integrationists in Brussels.

He is after all strongly pro-Lisbon and strongly pro-euro - far more so than Brown. Back in December, shortly after Mandy's third-time-lucky-reappearance on the British political scene, EU Commission President Jose Manuel Barroso let slip that Britain was "closer than ever" to joining the Euro and that the "people who matter in Britain" were thinking about joining the single currency. (Clue: he wasn't talking about those plebs the great British public).

In separate (but worringly related) news, a new YouGov poll for the Sunday Times shows opposition to the idea of President Blair remains strong.

Voters were asked:

"The Government is backing Tony Blair to be president of the European Union. What is your view of this?"

24% agreed with the statement, "I agree with it and I think it will be good for Britain"

54% agreed with the statement, "I don't agree with it - it will mainly be of benefit to Tony Blair."

19% said they didn't know.

The bad news is that, while we might still have a choice over who runs our country (no thanks, Mandy) we haven't got the slightest influence over who will become the first all-powerful EU President if Ireland votes 'yes' and the Lisbon Treaty comes into force.

It won't even matter much if it's Gordon Brown, David Cameron or Peter Mandelson representing us in October's Council (when the nominations are set to be made), since even our own Prime Minister won't have a veto over the preferred candidate (Blair or whoever becomes President will be nominated by a qualified majority vote).

As we've argued before, the only way to stop political has-beens from bagging the most high-profile and best-paid job in Europe is to put a stop to the Lisbon Treaty, so the daft job never sees the light of day in the first place.

Mandy's mixed message on regulation

As part of a statement regarding measures to help businesses cope with regulation, Lord Mandelson has today announced that the Government is going to shelve its plans for regulatory budgets, which would have seen departments having to account for the cost of, and therefore restrict, the new regulations they produce.

In our report on the cost of regulation to the UK we welcomed the Government's plans for regulatory budgets as one way of stemming the increasing flow of regulation, although we did question how departments would cope with the fact that the most costly regulations actually come from the EU and are essentially out of their control.

According to PA, Mandelson said his reason for pulling the plug on these budgets is due to the "economic situation" and he pointed to the need for new regulation "in response to the current banking crisis".

However, with financial services regulation acounting for only around 5% of the cost of all regulation introduced in the last ten years, it would seem that the Government is throwing the baby out with the bath water.


Given that Government budgets tend to be 'flexible' at the best of times, introduction of the budgets would be unlikely to jeopordise any new financial services regulations, which the EU/UK propose in the coming weeks/months.


What is important is that the Government continues to recognise the importance of quantifying the cost of regulation, plus the fact that the vast majority of regulations impact on small and medium sized businesses. Backpeddling on plans to introduce these budgets gives the wrong signal to businesses struggling to cope with the recession.


Mandelson also announced that, "The Government will also be working closely with EU partners to further embed the EU better regulation agenda and to ensure the current pressures on business are taken into account when new European regulation is being considered."

But today's announcement undermines any attempt by the UK to lead by example at EU level in tackling the increasing flow of EU regulation affecting businesses across the EU. The UK and the EU need more, not less, robust processes to cope with burdensome regulation.

Why did the Doha talks collapse?

Most news reports on the breakdown of Doha have focussed on the issue of so-called safeguard mechanisms as an explanation for failure. These mechanisms are designed to allow developing countries to protect their farmers from surges in imports. India, China and the US could not reach agreement on the issue.

The safeguard mechanisms are widely acknowledged to be a comparatively small part of the talks. So why have they been assigned such prominence? This is in part because media analysis, at least in the short-term, will generally tend to look at the more immediate factors for a given event. And it is certainly true that the issue of safeguard mechanisms was an important factor in the immediate term.

However, there are longer-term factors that offer a more useful explanation for the demise of Doha. Trade negotiations are inevitably based on reciprocity – large developing countries will quite reasonably expect significant commitments on market access from the developed world as the corollary to opening up their own markets.

Viewed in these terms, a large portion of the blame must be assigned to the EU.

From the start, the EU negotiating position has been characterised by a toxic combination of stinginess and inflexibility. During the Geneva talks, the EU did not make any new concessions on tariff reductions relative to the 2006 position. Last week, Mandelson attempted to spin that the EU had proposed reducing farm tariffs by 60% - up from the pre-existing offer of 54%, calling it a "a very considerable improvement on our own part." However, EU Agriculture Commissioner Mariann Fischer-Boel and French Trade Minister Anne-Marie Idrac admitted that the offer was "nothing new" - the difference between the two figures was merely down to whether tropical products were included in the tariff cut calculations or not.

Even during this round of the talks, it was very unclear that Mandelson had a firm negotiating mandate from EU member states, let alone the ability to make any improved offer on market access. French Trade Minister Anne-Marie Idrac stated that the EU would refuse to compromise on opening its markets for farm goods: “We can’t go further; we won’t go further on agriculture and we expect more open market access from emerging countries”. The explicit threat from Nicolas Sarkozy to veto even the current deal went even further in undermining the credibility of Mandelson’s position. Combined with significant pressure being applied by politically important Irish farmers, these factors meant that the EU offer could never inspire much confidence amongst the other negotiating parties at the Doha talks.

Although the EU tried to spin that it was offering to reduce farm subsidies under the CAP, this was simply untrue. EU Agriculture Commissioner Mariann Fischer Boel gave categorical assurances to farmers that the negotiating text under discussion at the WTO talks would not affect EU farm payments now or in the future. "The EU has complete freedom to do what it wants with single-farm payments from the Common Agricultural Policy [CAP] before and after 2013 under the current negotiating text," said Ms Boel's spokesman. The Commission confirmed to EU ministers that the proposed Doha text would have no impact on the levels of EU payments to farmers because of reform of the CAP in 2003, which reduced production-linked subsidies to farmers – the type of farm support the Doha proposals refer to.

Given the intransigence of the EU on market access and farm subsidies, it's understandable that large developing countries were unwilling to take a more accommodating stance on opening their own markets. India and China would have no doubt taken a less defensive approach to the question of safeguard mechanisms if they felt they were being given a fair deal on market access from the developed countries, especially the EU, the largest of these markets. In the event, these countries knew they were being sold a pup – so it’s hardly surprising that they were unwilling to roll over and do as they were told when the safeguard mechanisms came up for discussion.

The question of safeguard mechanisms was merely the final straw that led to the collapse of talks. The real underlying reasons go far deeper.

Africa starves, Mandelson spins

Excellent piece on AFP today, describing how Peter Mandelson attempted to spin his way out of the embarrassing situation of the EU not offering any new concessions on tariff reductions at the Doha trade talks.

Mandelson yesterday ‘unveiled’ what appeared to be a more generous offer on market access to the EU, proposing to reduce farm tariffs by 60 per cent - up from the existing offer of 54 per cent. Mandelson presented his offer as "a very considerable improvement on our own part."

That was quickly dismissed by Brazil however as “mere propaganda”, with Foreign Minister Celso Amorim describing it as "meaningless... purely statistic gimmickry."

Mandelson’s position then began to unravel completely, with even fellow EU commissioner Mariann Fischer-Boel (heading up Agriculture) admitting that her colleague’s offer was "nothing new".

Next, French trade minister Anne-Marie Idrac waded in, helpfully explaining that the difference between the two figures was merely down to whether tropical products were included in the tariff cut calculations or not. "Was there new progress, new percentages? The answer is no. Peter Mandelson this morning had clarified... what technical discussions have come up with – nothing more, nothing less," Idrac said. (In the run-up to this week's negotiations, the French government had already stated very clearly that it would accept no further concessions on the European farm support regime.)

Mandelson, by this point firmly on the defensive, was forced to concede that the 60 percent proposal was actually a "reiteration" of the EU's existing position. "The more we clarify, the clearer it becomes exactly what we are offering in this round," he told journalists.

Thanks for the clarification Peter…

It would also be interesting to have some more clarity on whether the EU is still proposing that 8 per cent of its tariff lines be given special treatment - ie. a lower rate of tariff reduction compared to other goods. The EU position on so-called ‘sensitive’ goods was one of the key issues that led to the collapse of talks in 2006 (the US was calling for 1 per cent of tariff lines to be exempted). But according to Japanese reports, Tokyo and Brussels have already agreed to ‘work together’ to maintain the 8% exemption in this round of talks.

Many of the products deemed sensitive in the EU are those exported by the developing and least-developed countries. The Commission for Africa has noted that “if only two percent of agricultural tariff lines are designated as sensitive… three quarters of global welfare gains will be lost.” The US, Canada and the Cairns Group also separately analysed the EU’s proposal, in the weeks after 28 October 2006, finding that designating 8% of goods as “sensitive” would effectively block all exports of interest to developing countries in the EU market.

Unfortunately, yesterday’s farce suggests the Commission is more interested in propaganda than in proposing real pro-development solutions on trade.

Perhaps this emphasis on spin is a tactic designed to pre-empt a breakdown in the talks this week, allowing the EU to shift the blame onto other negotiating parties and divert media attention away from its own intransigence. This was exactly the strategy that was followed last time talks broke down in 2006. But failure this week would be far more serious, and would all but kill off Doha.

the ego has landed

Peter Mandelson swung by the party held by the German Presidency of the EU to mark Europe day yesterday (what, you couldn't feel the excitement on the streets?)

He gave a short speech which was followed by an German oompha band. Even by Mandelsonian standards it was an unusual (and unusually arch) speech. In between telling us that he was only there because he had been unexpectely "dumped" down in the UK, and informing the crowd that he would shortly be off for a hot bath (thanks for sharing) he went out of his way to praise David Cameron. He said that he had made the "best case for Europe" that he had heard in his recent Sunday Telegraph article.

The speccie's diary of a notting hill nobody also picks up on the Cameron-Mandelson love in, suggesting that "our Man in Brussels" had been helping out with anti-Brown attack lines.

Mandelson also noted that he "couldn't remember exactly when it was" that the Commission had collectively decided to allow dual metric / imperial measurements (as announced by Gunther Verhuegen in the European Parliament) by said he was confident that the "paper process would catch up eventually".

Gizzajob mister

From the Herald - Mandelson is backing Cameron's "3G" agenda to the hilt... he just thinks that he needs to sign up to a new EU Constitution to achieve it.

Peter Mandelson, EU trade Commissioner, said he agreed with Mr Cameron's globalisation agenda but said the Tory leader risked denying the means needed to achieve globalisation goals.

"The EU needs to be properly equipped to fulfil its role in relation to the global economy, global warming, and global poverty. This requires rule-book changes. Few in Europe are advocating a whole new constitution but we should acknowledge the difference between this and the more limited institutional reform needed to create a more effective EU," Mr Mandelson said.

Brownite outriders gunning for Mandelson

Is Mandelson going to keep his job under a Brown administration?

While watching the tributes to Ian Richardson on Channel 4 news on Friday I was amused to see Nick Brown - former Labour Chief Whip and close ally of his namesake Gordon - use the occasion to score some points over an old rival.

He was asked if he ever encountered any characters like Richardson's Francis Urquhart while he was a party whip. He replied that the only person who compared to Urquhart in Machiavellian terms was Peter Mandelson, but that they were different for two key reasons.

1) Mandelson was too unpopular to be a good whip and no-one listened to him. Brown smirked as he described how poor old Peter was disliked so much by his other colleagues that the Chief Whip refused to give him a seat in the whip's office - forcing him to stand and make notes "on top of a filing cabinet".

2) Urquhart was a true-blue Tory and as such "believed in something... not a charge that could be made against Peter Mandelson".

Which made it all the more interesting to read Peter Oborne's article on Saturday about David Cameron's attempts to woo Mandelson, knowing that he won't get to keep his current job past 2009 if Gordon is still in power.

PS - the News of the World reckons that Gordon Brown is thinking about postponing the next General Election until May 2009. Apparently he is keen on combining it with the European elections in order that he can campaign on a platform of trying to make Cameron and the Tories look "soft on Europe". Does this mean that Brown will veto any attempts to bring back the EU Constitution?