Labour must act in the national interest to challenge the UK Government’s deliberate choice of isolation in Europe
In calling for a ‘mature patriotism’ to guide Britain in Europe, shadow foreign secretary
Douglas Alexander is onto something important. The future of European integration is crucial to our efforts to find a new model for growth and come to terms with the fast changing balance of power in the world. By seeking deliberately to loosen Britain’s ties with the EU, David Cameron’s position is putting at risk Britain’s essential national interests and, I would argue, unpatriotic, because it puts party and ideology before country.
A debate is necessary because the design flaws in the euro, while correctable, have weakened the old ‘peace and prosperity’ arguments for Europe. For too long, the rise of anti-European populism on both the left and right has gone unchallenged, while legitimate, genuine scepticism has gone unanswered. Member States have engaged in a zero-sum game of putting national interests first. This has met its apotheosis in the euro crisis where a collective problem ultimately requires a collective solution. As everyone recognises, the risks to the British and European economies are huge. Now is not the time for Labour to shrink or cower in its pro-Europeanism.
The first base for a ‘mature patriotism’ in Britain’s policy for Europe must mean a reiterateration that a healthy Single Market and euro area remains absolutely fundamental to our prosperity. The relative strength of the UK’s manufacturing base is largely based on inward investment that simply would not exist without the Single Market. One typical example is from my home town, where a couple of weeks ago, Pirelli, one of Carlisle’s biggest private sector employers, won a grant from the Coalition’s Regional Growth Fund to invest in innovation in a new generation of low-carbon tyres. The only reason an Italian firm like Pirelli locates in a place like Carlisle is because the UK is part of the European single market. Pull out of the Single Market and you imperil these jobs. Free trade with Europe, with Britain either outside or semi-detached from the EU, would not be enough.
The Single Market is part and parcel of a complex European bargain. To seek repatriation of powers would overturn that. David Cameron claims he wants to deepen the Single Market, but simultaneously move to withdraw the UK from all its EU social and employment obligations and cut the EU Budget. This is a fundamental contradiction in policy: further liberalisation will have to be balanced by stronger social safeguards in the free movement of labour for example and by more help for weaker regions within a reformed, not a residualised Budget. Labour should robustly defend Social Europe.
Also the single market in itself is not enough. Labour should be arguing for a European plan for growth: an expansion of the role of the European Investment Bank; a huge wave of investment in cross border infrastructure to improve our energy security and tackle climate change; a social action plan for youth unemployment. Hundreds of millions lie idle in unused Structural Funds that could help mobilise the private finance that now seeks a safe haven in German and British bonds.
As a result of the Euro crisis, the future of the European Union is in flux. No one knows now what the end point will be. For the UK, the essential point is that we must be fully part of that debate, not on its fringes. Britain must welcome the strengthening of eurozone governance, which may require Treaty change, while of course, protecting our interests as a euro-out. But closer engagement, not trying to pull away from the eurozone core, is the best way to do this.
It would be sensible for the UK to re-examine the case for membership of a reformed Euro Plus Pact. This was essentially an offer by the Germans to the Poles and other euro-outs to be present at the table when key economic policy decisions are under discussion. But David Cameron rejected out of hand British membership. There is a fundamental illogicality in the Coalition’s position, which represents a big fault line between the Coalition partners: they want to be ‘in’ and ‘out’ at one and the same time. Britain cannot be ‘in there’ to protect our legitimate national interests in the Single Market, at the same time as demanding repatriation or rebalancing of powers, which to our partners will sound all too like wanting ‘out’. Labour should be seeking to expose this contradiction and faultline.
But what are the Treaty powers Labour for its part might seek to ‘rebalance’ if this scenario arises? I am sceptical. Certainly in Europe there is a need for social democrats to ‘rebalance’ key policies – away for example from collective austerity to more balanced growth, to allow for more industrial activism, and to enhance social rights, while defending the free movement of labour. But if there is Treaty change, we should be open to big strides forward in democratic accountability, like the new German support, that the CDU Congress has just endorsed, for a directly elected President of the Commission.
Here it is worth recalling the words of Mrs Merkel, that “if the euro fails, Europe fails and for Germany, that would be unthinkable”. Likewise for Britain, which conducts so much of its trade and which has so much investment dependent on the single market, such an outcome would truly be an economic catastrophe. The single market is the foundation stone of the European Union and the euro is its essential cement. Pull that away and in place of the remarkable unity that we have seen in Europe since the Second World War, we retreat to a Europe of fractious nation states. We would have decided to become Westphalian pygmies at the moment that Brazil, India and China become globalisation giants.
What hope then would there be for our ability to promote the values that we share, more often with our European partners than with the modern United States, to back international development, reduce world poverty, tackle climate change, advance democracy and human rights and help to solve the problem of failing states? What would happen then in that disastrous situation to the ideals of the founding fathers who fought for a Europe whole and free, at peace in a co-operative partnership of nations where elements of sovereignty were pooled in the cause of democracy, freedom, prosperity and social justice?
Labour as the internationalist party of Britain, should not be scared of making these arguments, even when the media environment is so hostile. This is a true test of leadership. We have a historic responsibility as social democrats to bequeath to future generations a European framework of law and governance that can defend our shared values and interests in a turbulent world. That is a ‘mature patriotism’.
Roger Liddle is chair of Policy Network and a Labour member of the UK House of Lords