David Cameron’s referendum gamble confronts Labour with a stark choice. It is one that will test the mettle and quality of the candidates seeking the party leadership. For the tactical opportunist, the referendum offers multiple opportunities. Labour can seek to exploit Tory divisions on Europe by finding pretexts to support Conservative anti-Europeans in votes in the House of Commons, as happened once or twice in the last parliament. It can play the game of attempting to outmanoeuvre the United Kingdom Independence party and the Tories on immigration by sticking to a tougher stance than Cameron is likely to achieve.
However, if Labour is seeking to rebuild its credibility as a party of government, the best course is surely to speak clearly for what it believes to be the national interest. This will show leadership that the public will respect, even if some disagree with the party’s pro-European policy. It has the potential to make our new leader sound like a prime minister. Any stance that quivers or havers on this central question for Britain’s future will undermine Labour’s now-fragile claim to be a serious party of government. It would also be a complete betrayal of the party’s social democratic commitment and internationalist heritage.
It would also be wrong for Labour to play the European issue both ways. Yet the initial impression gaining ground seems to be that this is what Labour is trying to do. For starters there is the attitude to the referendum itself. As a Labour peer, I accept the referendum is now inevitable: it would be constitutionally wrong for the House of Lords to oppose it. When the referendum comes, I will fight ‘heart and soul’ for us to remain members of the European Union (to borrow language that Cameron used in his January 2013 Bloomberg speech – now deleted from the No 10 website). The national interest and the Labour interest is to save Cameron from the potentially disastrous consequences of his own folly.
But I do not and will not support the referendum bill. On this issue at least, Ed Miliband was right. It is hard to understand the attitude or mind of some members of the shadow cabinet who appear during the general election campaign to have undergone a miraculous doorstep conversion to the merits of a referendum policy. It remains a wrong and reckless policy.
It is reckless in two crucial respects. First, it risks the unity of the United Kingdom itself. Second, it sets up demands for change in our relationship with Europe – particularly on the question of migration – which, if they are taken literally at face value, will be very difficult, if not impossible, to achieve. This, in turn, would strengthen the hand of the populist anti-Europeans when the referendum comes. The present complacency is terrifying: that a satisfactory renegotiation can be achieved and a subsequent ‘Yes’ vote in the referendum taken for granted.
On migration, Labour should avoid the politics of making impossible demands. Of course it should be possible to tighten the rules on so-called ‘benefit tourism’ and send home migrants who fail to find work. Of course Labour was right in the election campaign to stress the importance of tightening enforcement of the minimum wage and curbing the abuses of some employment agencies. And the idea of setting up a new European Union fund to help localities that are suffering the stresses of migration should be developed: it is a sensible reform of the EU budget for which Labour should press.
But what about those migrants, the vast majority, who (to coin a phrase) ‘work hard and play by the rules’? The government is proposing to change the rules on in-work benefits in the belief that this will reduce the incentives for EU citizens to come and work here. It is arguing for a four-year stay on benefit entitlements. Labour has spoken of an in-work benefit pause limited to two years.
This policy appears to be based on assertion, not hard evidence. The denial of in-work benefits would obviously not deter highly skilled people who come to work in the United Kingdom in well-paid jobs. Nor does it seem plausible that it would have much impact at the bottom end of the labour market on single young people who come to Britain to work because there is a plentiful supply of low-paid jobs – jobs, it has to be said, that employers in many parts of the UK find it difficult to fill with native British talent. The policy appears to be dreamt up to address a general grievance about high levels of migration and may turn out to have little practical impact. We should ask ourselves whether this is the way to rebuild the appallingly low levels of trust people have in politicians and politics.
These demands on in-work benefits also appear to contradict our existing European treaty obligations, which have been agreed by every member state on the basis of unanimity and supported by successive British governments of all parties. Article 45 of the treaty on the functioning of the EU lays down that citizens of other member states should enjoy ‘equal treatment with nationals in access to employment, working conditions and all other social and tax advantages’. It is difficult to see how the European Court of Justice could regard any new EU directive or national law to deprive EU citizens of access to tax credits and other in-work benefits as compatible with that treaty article.
Working on the assumption that treaty change would be politically impossible for Cameron to achieve, there are three other possible ways through this. First, Cameron drops or softens this set of demands: this will of course offer the kiss of life to Ukip. It will delight the dozens of his backbenchers lining up to join the new ‘Conservatives for Britain’ group, who hypocritically claim they want to stay in the EU if better terms can be renegotiated, but in fact are itching to condemn the whole exercise as a fraud so they can campaign for withdrawal.
But if he does soften his demands, would Labour join the anti-European charge of betrayal? Andy Burnham for one has said that the two-year delay in access in work benefits is something he is determined to achieve. Does this mean that as Labour leader, were Cameron to recommend a package that did not precisely contain this commitment, he would seek a Commons vote to reject the prime minister’s renegotiation in the expectation that anti-European Tories would deliver him a Commons victory? Where would that leave Labour’s position on our EU membership? No Labour leader should risk making themselves the prisoner of a band of populists who would argue for campaigning against our continued EU membership ‘on the Tory terms’.
The internal pressure on the Labour leadership to act in this way is based on a false analysis of Labour’s failure in the general election. This is the story of a metropolitan leadership elite out of touch with real views of ‘core’ Labour voters. The reason we lost, it is argued, is because of a lack of connection with these voters on immigration, Europe and welfare reform. It was Labour defectors to Ukip (and disillusioned working-class abstentionists) that allowed the Tories to hang on to their marginal seats and win seats from us. Frankly, this is delusional. It was the Conservatives that won the election, not Ukip. People voted Conservative not because they liked them; many felt an instinctive sympathy with Labour values. Rather they decided that Labour could not be trusted on the central questions of leadership and the economy. How, one might ask, is opportunism on the European issue and a populist chasing after the anti-immigration vote going to help address these huge weaknesses?
Second, the UK could agree to pay a price in future for getting other member states to agree a treaty amendment to Article 45. This could be a high one, probably related to future British contributions to the EU budget. The poorer member states who have been the source of much low-skill migration to the UK might reasonably argue that if their unemployed citizens are to be denied their fundamental treaty rights to fair access to labour markets in more prosperous member states, then they should be entitled to increased structural fund transfers to promote their faster domestic development. Some may be tempted to throw in demands for what, in terms of a change to the treaty text, would be a minor revision but with major consequences: to amend the unanimity provisions that ensure the terms of British budget rebate cannot be changed without UK consent. What, after all, is sauce for the goose is sauce for the gander.
Third, the government could alter the benefit entitlements of UK citizens so that access to in-work benefits would be restricted until after completion of two or four years of contributions. This would meet EU non-discrimination principles and treat all EU citizens equally, including British citizens. There is a strong case for this as a desirable reform to rebuild public confidence in our welfare system: a return to Beveridge principles for a new century, on the lines that individuals of stature like Frank Field have advocated. However, there would be significant practical difficulties in quickly making this change and a reluctance to admit that it was being implemented to comply with EU rules. A weaker alternative would be to argue for a ‘residency requirement’ before in-work benefits are paid: this would apply to Britons who had worked abroad as well as migrants from other EU countries. However, it might be arguable before the European Court of Justice that this is a quasi-discriminatory measure.
On the migration question, as matters stand, there is no obvious happy outcome, only a reckless risk. It should be incumbent on pro-Europeans to start making the argument that the free movement of people is as much part and parcel of the single market as the free movement of goods, services and capital. Yes, social democrats should argue that all these markets should operate in a reformed and strengthened framework of social and public interest rules that apply across the whole union. But member states cannot pick and choose which bits they like and which bits they do not.
Free movement is also increasingly vital to the viability of the public services we hold most dear, such as the NHS: it is one of the few means by which the present shortage of qualified nurses can, for example, be addressed.
Pro-Europeans must be careful not to go along with renegotiation demands that some may feel are desirable in their own terms but become a precondition of Labour’s continued support for our EU membership in a referendum. This issue is too important for party political games. Labour must support our EU membership come what may.
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