Here is my article published by the Fabian Society on its website this week
David Cameron’s much delayed, much anticipated and over-hyped Bloomberg speech will not resolve the internal Tory divisions on Europe. It is already clear that there has been no long lasting opinion poll boost. Indeed Labour appears to be strengthening its lead. But Cameron has opened up a potentially damaging process which could threaten the long-term economic and political interests of our country.
In his speech the prime minister said that “we…need to address the sclerotic, ineffective decision making that is holding us back.”
But much of that sclerotic decision making in the EU happens because of unanimity rules. But the prime minister has not called for more qualified majority voting and instead wants to repatriate decisions from European institutions.
Similarly, the prime minister questioned whether we can justify an ever-larger Commission, but the Commission gets larger because of EU enlargement and the accession of more member states which is the long-standing policy of successive governments. David Cameron recently confirmed that he wants further European enlargement to all of the western Balkan countries and he is not arguing for a limit on the number of commissioners. The prime minister put up a straw man by attacking the EU for increasing the number of commissioners relentlessly, when that is in fact a consequence of our previous and future enlargement policies.
The prime minister said that the European treaty laid the foundations of ever-closer union among the peoples of Europe. But he did not point out that British Conservative negotiators of the Maastricht treaty insisted on keeping the phrase “ever-closer union” because they deemed the words to be vague and therefore something they could live with.
The prime minister also said in justifying a referendum: “Put simply, many ask ‘why can’t we just have what we voted to join – a common market?’”
I campaigned and voted no in 1975, in my misguided youth. At that time, the Wilson government, like the previous Heath government and pro and anti-European campaigners, said the vote was about more than a common market, namely political union and other aspirations for co-operation. It is not true that we had a referendum and joined an organisation that was just about trade. It was more than that.
The EU budget is only 1 per cent of the GDP of all member states. In this country, public spending accounts for more than 40 per cent of our GDP each year, and we must put into perspective the fact that the EU’s total spend is very small. The European Commission has, in total, around 30,000 employees who serve 27 member states. Her Majesty’s Revenue and Customs alone has about 80,000 employees. Despite the impression given by Europhobes we do not have a gargantuan European Union bureaucracy hoovering up resources; in fact, the UK government spend five times as much servicing the interest on the national debt each year than they do in European Union contributions.
The UK contribution to the European Union is less than that of Germany. Our net contribution – with the rebate that was retained by the previous Labour government – is comparable to that made by France, a similar country in terms of population and GDP. We are among the net contributors, but the European Union is also about solidarity with poorer new member states which has led to the growth of the European Union to an internal market of 500 million people, and the increased trade and prosperity from which British workers and British companies benefit.
The EU also makes a contribution to democracy and stability in Europe. The Nobel prize committee has rightly recognised the European Union’s contribution to peace in Europe over the decades.
Instead of addressing the economic crisis that confronts the whole of this continent, and the wrong, misguided austerity economics that is creating tens of millions of unemployed people and the immiseration of millions in many European countries, we in this country are, if Cameron gets his way, now going to have an obsession with the minutiae of a probably unrealisable renegotiation about unrealisable repatriation powers.
Instead of this we need Labour ministers to go to Brussels and argue, in all the forums of the European Union, for different economic policies. In the meantime, we need British ministers to bring in different domestic economic policies here to again achieve growth, prosperity and jobs in this country.
The economic policies the Tories and Lib Dems are pursuing here are potentially leading, as we now know, to a triple-dip recession. We have a massive trade imbalance with the European Union, which is partly due to the failures of our domestic policy, but is being compounded by the wrong economic policies being pursued by the austerity programme within the eurozone. As a result, the government’s British economic strategy—export-led growth to get us out of the situation we are in, presumably capitalising on the benefits of the devaluation of the pound that has been going on for some months—is not getting us the growth we need, partly due to domestic reasons and partly due to problems in the eurozone economy.
German Chancellor Angela Merkel may have sided with other northern European states in the recent decisions on the EU budget but that should not be misinterpreted as her supporting Cameron more widely.
Two or three years ago, the political debate in Germany was often about trying to keep Britain on board and to move with Britain. However, the reality, right across the political spectrum, is that Germany today has largely given up on the UK under the coalition government. The Germans see their future as being with France and Poland, and, as was made clear recently to members of the foreign affairs committee in meetings both in London and Berlin, the German priority will be to do whatever it takes to save the eurozone at all costs.
That means that the UK will be in an uncomfortable position as the eurozone states and others go ahead with new institutional arrangements outside the EU treaties over the next two or three years. Anybody who thinks that only Germany is not with us should read the remarks of Radek Sikorski, the Polish foreign minister, in Oxford last year in which he said: “Poland wants to be with Germany and France as partners.”
He also said: “You could, if only you wished, lead Europe’s defence policy…Britain’s leaders need to decide once again how best to use their influence in Europe…The EU is an English-speaking power. The single market was a British idea. A British commissioner runs our diplomatic service…But if you refuse, please don’t expect us to help you wreck or paralyse the EU.”
The Polish and German governments and many others want the UK to stay in the EU as partners, but they will not wreck the EU to keep us. We need to realise that our options are narrowing. The present government are in danger of taking us into an isolationist position. We need to have concerted economic plans for recovery in the next five years, not unspecified plans to create economic uncertainty and damaging policies that will reduce the amount of inward investment into the UK economy.
The government have taken a dangerous leap in the dark, creating enormous uncertainty for anybody who wishes to plan to invest in this country. They are putting jobs and prosperity in Britain at risk. This risk to inward investment will be reduced as long as Labour does not follow suit. If Labour stands firm, rejects a referendum and argues for a constructive and pragmatic pro-European approach I predict that the Tories will come to regret Cameron’s speech as they confront defeat at the next general election. Let’s focus on the real needs of our country. Let the next general election be the referendum on Britain’s future in Europe.