Labour Euro-Safeguards Campaign - Bulletin May 2002


  1. Have we ever been told the truth about the European Union?

    Even those most enthusiastic about everything associated with the European Union cannot now deny that much of what the British public has been told about the EU, going back to the time of the Treaty of Accession and the Referendum in the 1970s, has involved a tissue of misinformation. The revelations about the extent to which deliberate deception was practised on the British people at the time when the terms of entry were being negotiated, particularly on fishing and the certainty of the erosion of British sovereignty, is nothing short of a national disgrace. Playing down in the UK the extent to which most politicians in the EU are intent on creating a European Super State is still endemic. Confronted by this barrage of propaganda, it is sometimes easy to forget the published facts which no-one can deny. Some of the more important of these are set out below.

  2. What is the position on UK budget contributions to the European Union?

    With the single exception of 1975 - not, no doubt, entirely without coincidence the year when the Referendum was held - Britain has paid into the EU coffers much more than we have received back. Because the structure of the British economy is different from those of other Member States, the way in which both revenue is collected and distributed works to our disadvantage. The net result is that we only receive back about two thirds of what we pay in to the EU budget. Furthermore, the sums involved are enormous. In 2000, for example, the last year for which full figures are available, our gross contribution was 11.9bn - enough to build 50 brand new 800 bed city-centre general hospitals! Over the 27 years of membership to 2000, the UK's total net contribution - i.e. total payments minus total receipts came to 47.8bn (not allowing for inflation), of which 4.7bn net was paid in 2000 alone. Apart from Germany, we are the largest net contributor, subsidising many countries with considerably higher living standards than we have.

  3. How have we fared with both Agriculture and Fisheries?

    The Common Agricultural Policy has always been a cornerstone of the whole EU project, keeping food prices far above world levels, and costing the average family of four about 22.50 per week. Almost everyone agrees that the policy has almost nothing to be said in its favour. Its main beneficiaries are large agribusinesses, not small scale farmers. It has led to both gross over-production and despoliation of the countryside, as hedges have been torn up to cater for prairie style production methods completely inappropriate for European conditions. It has been extremely wasteful, corrupt and expensive, and still absorbs about half the EU's entire budget. Its protectionism has been hugely damaging to the Third World, as dumped food has put their farmers out of business, while far cheaper food producers in poor countries have been prohibited from supplying the EU market. Even worse than the CAP, however, has been the Common Fisheries Policy, cobbled together just as Britain joined the Common Market to give other Member States completely unreasonable access to British waters. The result has been an ecological and economic tragedy as our traditional grounds have been fished out, and our fishing fleet decimated. And reform? Some changes have been made, but the main structures are still in place. Meanwhile, French intransigence on agriculture and Spanish opposition to reform of fishing mean that the fundamental policy restructuring which is so urgently needed is simply not on the agenda.

  4. What has been the record as regards trade with other EU Member States?

    When we joined the Common Market, we were told by all too many industrialists and politicians that the new larger market on our doorstep would provide British industry with a huge new opportunity. The reality was that the cost base for manufacturing in the UK was higher than in the EU - as it still is - and as a result we were bound to lose out. This is exactly what has happened. We have had a massive balance of trade deficit with the other EU countries ever since we joined, totalling a cumulative 90.6bn by 2000. The result has been the progressive hollowing out of British industrial capacity, as the proportion of our national income arising from manufacturing has fallen from 30% in 1973 to 19% now, and the proportion of the working population employed in this sector has gone down from 35% to 14%. The much larger fall in the number of people working in manufacturing than in output also clearly demonstrates how much easier productivity increases are to secure in industry than they are in services. This is why the erosion of our manufacturing base explains much of our comparatively poor growth record compared to that in many other parts of the world - a problem, incidentally, now increasingly shared by the whole of the eurozone, which is also progressively deindustrialising.

  5. How has the whole of the EU done in terms of growth and unemployment?

    When we joined the Common Market in 1973, we did so mainly because the original six Common Market countries had grown much more quickly than Britain during the 1950s and '60s, with almost no unemployment. Just as we became members, however, a combination of the oil crisis, the shift to monetarist policies and ill judged attempts to lock the currencies of Member States together blew all the European Economic Community economies off course. Their growth rates slumped from nearly 5% per annum to barely 2%. Meanwhile registered unemployment soared, while the total number of people not working, who would have been willing to do so, rose much faster still as huge swathes of potential employees dropped out of the labour force. Instead of joining a dynamic economic powerhouse, Britain actually teamed up with some of the slowest growing, high unemployment economies in the world.

  6. What has been the EU reaction to these problems?

    Faced with this poor performance, we might have expected European leaders to revert back to the expansionist policies which had worked so well during the early decades after World War II. In fact, they did nothing of the kind. On the contrary, the succession of treaties we have seen recently, especially the one at Maastricht in 1991, reinforced all the trends towards deflationary policies, slow growth and high unemployment. Preparations for, and then the introduction of the euro have made expansionary policies not easier but much more difficult to implement, reflected in the dismally poor growth figures for the EU in the 1990s - only 1.9% per annum on average over the whole decade for the eurozone countries. Much of the problem stems from the entirely artificial restrictions on borrowing to 3% of GDP - forcing governments to borrow "off balance sheet" with unpopular, expensive and inefficient Private Finance Initiative and Public Private Partnership schemes.

  7. What has happened to subsidiarity?

    Meanwhile, outside the world of economics, centralisation in other areas of policy has proceeded apace. In theory, governance is supposed to be as devolved as possible, following the subsidiarity precept, but in practice this has never happened. The doctrine of acquis communautaire, which means that anything over which the EU has taken control is never relinquished, combined with the ambitions of the Brussels Commission, has meant endless intrusions into national traditions and ways of doing things. This has been particularly damaging for Britain, which has always had a markedly different cultural background to other EU Member States. As a result our cherished legal system is being attacked and eroded. Metrification is being forced upon us, rather than being a matter of choice as has always been the position under British law. Our diplomatic, military, and trade policies are all coming increasingly under EU control. Our powers of veto have largely disappeared as Qualified Majority Voting becomes the norm. Our national Parliament is in danger of becoming little more than a prestigious talking shop, as power seeps away from it.

  8. How does the EU enforce its purposes on Member States?

    How have we allowed all this to happen? The main reason is the way in which the EU operates. It generates an incredible quantity of regulations and directives, which national parliaments are incapable of monitoring properly or resisting effectively. The instincts of the Brussels Commission are to standardise and to create uniformity across the whole of the European Union. Their method is essentially bureaucratic, providing themselves with ample opportunities to consolidate their power and influence while minimising the scope for criticism and opposition. By their lights, they have been extremely successful, but at remarkably heavy cost to everyone who has to pay for it all. Because the total EU budget - capped at the moment at 1.27% of EU GDP - is comparatively small, the ability of the Commission to instigate direct expenditure is still limited. No such constraint affects regulation. It is everyone else, not the regulators, who then have to find the money to pay the costs.

  9. Above all, what about democracy?

    The greatest casualty of all, however, has not been our economics, social, diplomatic or environmental policies, but our ability to govern ourselves. Everyone agrees that the EU has a "democratic deficit" - a feature which is hardly surprising in the light of the deliberately technocratic structure of its institutions, designed by founding fathers who generally distrusted democracy. All the EU Member States may be democracies, but that does not make the EU as a whole subject to the will of the people. It plainly is not. And this is the problem. As power moves away from accountable national parliaments to unelected Commission officials and central bankers, so democracy gets eroded, the electorate becomes apathetic and alienated, and extremist and irrational protest parties proliferate. The ability of the electorate to vote out those whose policies it does not like, or who are self serving or corrupt, disappears. It is an extraordinary paradox that just as liberal democracy has increasingly become the form of government to which more and more of humanity aspires, the trends in the EU are moving in the opposite direction. For how long will the EU be able to buck such a powerful historical trend before countervailing forces move power back again to the people? Time will tell, and time may well not be on the EU's side.

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