Labour Euro-Safeguards Campaign - Bulletin September 2010


  1. What were we promised during the last general election campaign?

    During the campaign leading up to the May 2010 general election, especially during the debates between the party leaders, there was no doubt about the tone of what was promised by the current Prime Minister. A Conservative government would stand up for Britain within the EU. There would be increased scrutiny of EU proposals for extending its powers within the UK. There was even serious talk about rolling back some of the existing EU regulations which cause particular problems within the UK, such as the 48 hour limit on the working week, which is causing widespread difficulties in the NHS. What has happened since the election, however, has been completely different. Faced with the realities of the way in which the EU works, all the brave talk of defiance has come to nothing. Instead, on every front, the new government has caved in to institutional EU pressure to conform. Examples abound. One of the new government's first acts was to commit the UK to a potentially extremely expensive scheme to help shore up the euro. EU regulations are to be exempt from government attempts to stop the cost of regulation rising to ever more unjustifiable levels. Just recently, in a major concession and erosion of our status in the world, Britain has agreed that the EU should be separately represented at the United Nations.

  2. Why is it so difficult to stop further integration occurring?

    As everyone knows, the reality is that there is little support right across the political spectrum in the UK for policies of this kind. Why do they then continue to be implemented? There is a simple answer. The EU has a momentum of its own which is extremely difficult to resist. Because of the way EU policy making and its institutions work, there is a constant process of further integration taking place step by step. Each individual increment does not seem sufficiently significant for it to be worth while Britain standing out against it. The cumulative effect, however, is to lock the UK more and more firmly into an ever more complex web of obligations. Institutional changes, particularly Qualified Majority Voting (QMV), have made the position even more difficult. The consequence of constant incremental changes is that there never seems to come a point where any particular proposal generates enough resistance to make it inevitable that a decision on it has to be put to the electorate in a referendum. The closest we came to this situation recently was with the Constitution, on which a referendum had been solidly promised by all the major political parties. The risk of losing was too much for Labour and the Lib Dems, however, with the result that they all pretended that the Lisbon Treaty was completely distinct from the Constitution, thus dodging the need for a referendum being held. The telling exception to this rule was what happened over the proposal for the UK joining the euro. This could never be presented as an incremental step. It was always "yes" or "no", and this was a matter on which a referendum had unequivocally been promised. As a decision by the electorate would almost certainly have resulted in a "no" vote - the government never dared take the risk of running a referendum on the euro and losing it, so thankfully we never became members of the eurozone.

  3. What are the institutional reasons why there is constant pressure for further EU integration?

    What motivates the EU's continual drive for more powers? Part of the reason is the institutional structure of the EU. The body with the power to initiate policies is the Commission. The role of all the other EU bodies - not least the European Parliament and the Council of Ministers - is to react to Commission proposals, not to initiate their own policies. As the Commission, which consists of appointed officials and is thus under no electoral pressure, has a massive interest in extending its powers, this is what it does. Needless to say, it can always find reasons for doing so. There are always problems which apparently need to solved. The issues then at stake, however, are ones of both priorities and accountability. With limited resources available, not every problem can be tackled and the extravagant way in which EU budgets are being increased at a time when most national governments are cutting them back speaks volumes about the Commission's insouciant disregard for costs. It is no coincidence that this is happening. Whereas national governments have to get themselves re-elected and are thus constrained by democratic pressures not to raise taxes, no such obstacles apply to Commission officials who, in the last analysis, are accountable to no-one except themselves.

  4. Are there particular reasons why further integration is so strongly on the agenda at the moment?

    Currently, the problems facing the euro provide exactly the sort of pretext for which the Commission is always looking. It is clear that the collapse of the euro, triggered by one or more of the eurozone's weaker economies defaulting on its euro obligations, would be a huge set back for the EU. It is equally obvious that the only way of stopping this happening - at least for the time being - is for the EU to co-ordinate massive financial support for the economies within the eurozone which are having problems financing both their public sector deficits and their sovereign debt. To try to make this policy sustainable, the next step which is being widely canvassed is to create systems for co-ordinating much more closely the way in which all EU economies are managed - a process in which the UK is all too likely to be involved even though we are not in the euro. The reality is that the euro simply is not viable without much more central control of the eurozone economies, which was, of course, one the major motivations for setting up the eurozone in the first place. It may be very unlikely that policies along these lines will work in the medium to long term as they do nothing to address the fundamental problem facing the eurozone which is the inability of the weaker economies to compete particularly with Germany within a fixed exchange rate regime. The attractions to the Commission of trying nevertheless to hold the euro together are obvious, justifying yet more centralisation of power in Brussels.

  5. Are these pressures likely to increase or to reduce in the foreseeable future?

    Whether the current relentless process of increasing centralisation in the EU continues or not depends on a number of factors. There is little doubt that the Commission and most of the EU political elite would like to see this happening. Events, however, may intervene. Although there is no doubt at all that huge efforts will be made by the EU to hold the eurozone together, it is far from certain that defaults will be avoided. It is equally certain that the more guarantees and loans that are made to try to hold the euro together, the greater the dislocation and the worse the financial problems to be faced will be if and when the dam eventually breaks and defaults take place. The break up of the euro may also be accelerated by the deflationary economic consequences which flow directly from the way in which the eurozone functions between the EU's unequal Member States. As the weaker economies within the euro struggle to compete with Germany and Holland, the unemployment and cuts in public expenditure which bigger and bigger trade deficits bring in train in these countries may lead to the election of governments which are no longer willing to support the sorts of deflationary economic policies driven by the EU which maintenance of the eurozone entails. If electoral support for the EU withers at the same time on other grounds as well, reflecting the increasing gap between the EU elite and the ordinary voter, Brussels may find that its long established capacity for setting the agenda is sapped away.

  6. What are the consequences for Britain likely to be?

    As has been apparent for a long time now, Britain is particularly vulnerable to the consequences of further centralisation in the EU. Our gross and - even more importantly - our net contribution to the EU budget are both rising inexorably at a time when public expenditure has never been under greater strain. It is only the remains of the rebate which is stopping the position being even worse than it already is and it is highly likely that the continuing existence of the rebate will be under threat again before long with increasing QMV making it more and more difficult for the UK to resist its further erosion. There is no prospect of serious reform of either the Common Agricultural (CAP) or the Common Fisheries Policy (CFP) getting onto the agenda. QMV also makes it harder for the UK to defend our interests which are more inclined than in most other countries to conflict with the EU consensus. In the meantime, the dirigiste tendencies of the Commission continue to flood the UK with more and more regulations which raise costs and make our economy less competitive.

  7. What can the UK do about this situation?

    The Coalition government we now have in power is therefore learning the same lessons as many previous administrations have had to absorb in the past. The notion that we can stay as fully supportive members of the EU while, at the same time, we can resist its encroachments is simply unrealistic. This is not a vision of the way the EU is currently going which is shared by either most EU politicians or by the powerful officials who staff the major EU institutions. Faced by as many problems as it is, not least the scale of the fiscal deficit, it is not difficult to see why the Coalition is reluctant to choose this particular moment to provoke a major battle with the EU. If is not prepared to put a stake in the ground, however, showing how far it is prepared to be pushed before it stops making concessions, it is all too easy to see what is going to happen. All the promises given before the election about resisting further EU encroachments are going to be swept aside. Bit by bit, our sovereignty will continue to be undermined. More and more regulations will be imposed upon us. The costs of our EU membership will continue to rise. Nothing serious will be done about reforming either the CAP or the CFP. Internationally, our presence will gradually be taken over by the EU. The UK Parliament will become more and more of a powerless talking shop. This is not what the UK electorate wants, but this is what it is going to get as the UK's democratic self-government, slowly evolved over centuries, is systematically eroded away.

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