Progress | Centre-left Labour politics

Labour’s European third way

A referendum is inevitable. Here is how pro-Europeans can win it

Mainstream Labour opinion has been pro-European since Neil Kinnock, as leader, made it so. Rarely, however, do Labour speakers join up the dots between the European Union and our policy objectives. We pride ourselves, for example, on being green but we hear little from Labour on what role the EU Emissions Trading Scheme should have in decarbonisation.

There is a paradox, therefore, between a default pro-Europeanism and a lack of fluency in the connections between EU policy and Labour’s purposes. The resolution of this paradox exists in favouring EU reform that creates a union better able to secure our goals. Rather than seeking this, however, much party debate has focused on an EU referendum.

A referendum may have some inevitability to it. Whatever happens at the next general election, the United Kingdom Independence party and large elements of the Conservative party will keep pushing for it. Legislation passed in this parliament means that British law now requires a referendum on any substantive transfer of powers to the EU. Treaty revision in response to the euro crisis seems more likely than not at some point, ensuring noisy demands and legal claims for a UK referendum at this stage.

The euro will drive further change in the EU and demands for a UK referendum will get louder as this happens. And, while many issues may be a higher priority for the public, they would rather have this referendum than not.

Arguing that referendum commitments drive business uncertainty does not convince as the euro crisis and related EU institutional debate themselves create uncertainty irrespective of the UK’s position on a referendum. Those who resist this referendum place themselves on the side of Brussels against the British people who want a say in how they are governed, which seems a perverse place to be for those – such as political parties – in the business of earning the support of these people.

Having worked on Siôn Simon’s mayoral campaign in Birmingham, I appreciate that referendums are small ‘c’ conservative mechanisms. Those arguing against the status quo always face a steep challenge, particularly if their opponents succeed in attaching a sense of risk to the unknown of change. The UK’s exit from the EU would certainly be a step into the unknown. Nigel Farage might be an entertaining guy to have a drink with, but taking that step with him is another thing entirely. The risk-averse character of referendums gives me confidence that pro-Europeans will win. Hiding from what is coming rarely makes political sense. Yet that is what arguments against a referendum seem to do, which is all the more unnecessary when pro-Europeans have a strong battery of arguments in their armoury.

Deploying them requires, however, that Labour become more compelling in why we are pro-European and, in doing so, concede something that British pro-Europeans have been reluctant to. This is the reality of a multi-speed and multi-destination Europe. For the euro to endure its states must integrate in ways that do not make sense for the non-euro states.

The former Conservative cabinet minister Michael Portillo has argued that we face a binary choice: leave the EU or join the integrationist project of the euro. This creates a false distinction between the euro and the non-euro states. What the euro most urgently needs are growth rates in its Mediterranean states sufficient for them to manage their debts. Coventry, though, needs growth almost as badly as Cordoba.

There is a shared agenda for pro-jobs and pro-growth reform that straddles the euro and the non-euro states. This should be the sweet spot for Labour reformers. David Cameron also rejects Portillo’s binary choice but does so by trying to make the UK a special case, picking away at the fundamentals of the single market till nothing remains.

Labour’s reform is for a common project of European competitiveness and influence, while Cameron’s is for a littler Britain, trying to get on in the global race by curbing rights and regulations. While I supported an elected mayor for Birmingham because our top-heavy state needs rebalancing, UK prosperity does not simply depend upon this. There are many issues on which we would achieve more by working together with our European partners, which the prime minister’s approach denies.

Would British households and businesses not pay less for gas and electricity if the single market in energy functioned better? How much of British environmental policy could be scrapped if we could get a stable carbon price through EU policy? Do we want the City of London to be Europe’s financial centre or an offshore racket? Will British firms be more or less likely to access rapidly growing markets, such as China and India, with the UK inside or outside the EU?

There is a rich seam of issues to be mined by those who want to see both euro and non-euro states better able to deliver jobs and growth. These should be the substance of Labour’s third way on the EU. Not cut adrift from the EU or part of the integration of the euro states but driving an EU project that enables all member states to be better able to prosper in our Asian century. Whenever we have a referendum and, even if we do not, Labour should get on with advocating this third way.

It is encouraging that Liam Byrne has written a book on China and Chuka Umunna is serious about growing UK exports to the developing world. Now we need clarity on how an EU third way fits into these vital priorities.


Jonathan Todd is a contributing editor to Progress


Photo: Jean-Etienne Minh-Duy Poirrer

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Jonathan Todd

is Labour Uncut’s economic columnist


  • Vital priorities, indeed:

    – The total failure of any “Social Europe” ever to save a single job, service, benefit or amenity;

    – The European Union’s imposition of economic austerity;

    – The long, and increasingly accelerated, creation of a militarised EU waging global wars of “liberal intervention” while sustaining a vast military-industrial complex selling arms to all and sundry;

    – The refusal of the Council of Ministers to legislate in public and to publish an Official Report akin to Hansard;

    – The presence in the Council of Ministers and in the European Parliament of all manner of extremist and politically undesirable legislators;

    – The Common Agricultural Policy;

    – The Common Fisheries Policy;

    – EU control of industrial and regional policy;

    – The moves towards a “free trade” agreement between the EU and the United States, to the ruination of jobs, workers’ rights, consumer protection and environmental responsibility on two continents inhabited by many hundreds of millions of people;

    – Social dumping;

    – The drastic restrictions of civil liberties necessary in order to make possible the borderless Europe that has always been a stated aim of the EU;

    – The centrality of EU law to the proposed privatisation of the Royal Mail;

    – The illegality under EU law of any renationalisation of the utilities or of the railways once they have been privatised, although there is no obligation to privatise them in the first place, with the preposterous and pernicious consequence that British railways and utilities can be and are State-owned, just so long as the State in question is not the British State, while the least subsidised railway line in Great Britain has to be returned to the private sector from which it has already had to be rescued twice;

    – The impossibility under EU law of using State aid to support two domestic sources of energy, so that it is impossible for this country both to have a nuclear power industry and to exploit our vast resources of coal;

    – The abject incompetence of David Cameron in failing to deliver a real terms reduction in the
    United Kingdom’s contribution to the EU Budget at this time of austerity, as explicitly required by a resolution of the House of Commons; and

    – The role of EU competition law in the ongoing dismantlement of the National Health Service in England.

    There are more.

  • The previous comment is a stark warning of the EU drift to the “right”, a tragedy which the European left has failed to address. We should be building a worker’s state from the Urals to the Atlantic based on a commonality of benefits, pensions, holidays, employment rights etc in return for the harmonisation of taxes and regulations which should benefit “big business”. The principle of free movement of goods, capital and workers is sound but requires a sea change in attitudes (and support) to “immigrants”.

    Any referendum is a complete irrelevance as the “campaign” will focus on who can “get one over Johnny foreigner” led by the yellow press.

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