by Jonathan Todd
While Andrew Rawnsley reports that Ed Miliband’s speech to the CBI on the EU “leant heavily against a referendum”, Peter Mandelson recently wrote in the Financial Times that a referendum is “inevitable”. Today Tony Blair will deliver a speech in which he will argue for Britain “to be at the heart of the EU”.
For decades Labour has been pro-EU, while being vague on the role of the EU in securing our goals. Imprecision is increasingly inadequate in a fast moving debate.
Is Miliband ducking a fight that Mandelson thinks is inevitable? Will Blair’s intervention encourage Miliband to be bolder? But what exactly does he mean by “the heart of the EU”? In the Euro and the EU banking union or just leaving the door open to British membership at some stage?
It has been clear from early in this parliament that Europe would be more central to it than throughout the Blair/Brown government. But many unanswered questions remain for Labour. As they do for the Conservatives.
Michael Fabricant, dashing vice chair of the Conservative party, has given Nigel Farage an enhanced platform, much as the leadership debates in the last election brought Nick Clegg to a wider audience, by floating the idea of an electoral pact between his party and their “brothers” in UKIP.
Being a more sensible politician than Fabricant, Farage is holding out for as much as possible. He was on the Daily Politics on Monday; fully twelve hours after Fabricant went public with his cunning plan. He wanted an apology from the prime minister for his comments on UKIP following the Rotherham fostering farrago – a strong showing from UKIP in the Rotherham by-election will help Farage and the fostering issue plays into his hands. He was also pushing Tory troublemakers in the direction of Michael Gove, the member of the cabinet seemingly most sanguine about the UK leaving the EU.
The overriding message from Farage is that his party must be recognised as reasonable. Conservatives who equate the split in the right vote between their party and UKIP with the historic split in the left vote between Labour and the Liberals virtually roll the red carpet out for Farage. Pull up a seat in the mainstream, Nigel, they say. Can I fix you a drink?
This is the same UKIP that says global warming is “not proven” and wants to freeze permanent immigration for 5 years, double prison places, and not cut frontline policing. How will this be paid for? It’s not clear, as employers’ national insurance should be scrapped.
This is the 19th hole after a good lunch. But many Conservatives think this is where the action is in British politics. This shows the pickle they are in and the limited room for manoeuvre that David Cameron has.
They think that British exit from the EU is certain, that the EU is an abiding concern of the public, and that they will reward whoever delivers the most merciful liberation since the Glorious Revolution. They forget that the pro-EU case has barely yet been made in the UK, that it will be made by senior business people, who think that UK exit from the EU would be a nightmare, and that referendums invariably reward the default option of the status quo, which, given that we are presently in the EU, would be to stay in the EU.
EU obsessed Conservatives think that Farage is on the vanguard of history. He isn’t. If the EU didn’t exist, we would have to reinvent it. Not, however, in its present form. Two kinds of change are required.
First, some kind of durable structure needs to be found for the Euro. The limits of a monetary union without a fiscal union have been painfully exposed. The necessary steps are being slowly taken. We might wish that they were more quickly taken but the UK wins no friends through the prime minister’s hectoring.
Second, the EU as a whole, not simply the Eurozone, must be reconfigured to best enable Europe to compete in an Asian century. This means fundamental reform to energy policy, reduced CAP subsidies and more support for industries of the future, and levering the internal market to increase access for British companies to crucial emerging markets.
We should also consider whether this should extend to British membership of the European banking union. This would increase our capacity to drive Brussels in the direction of the EU that we want, but may reduce the competitiveness of the City of London, at least in some senses. It is not clear that the interests of one industry outweigh those of all others.
Blair probably won’t resolve this banking dilemma today. But, hopefully, he will encourage pro-Europeans to find some backbone. Farage is a paper tiger.
Farage is, though, stoking the public appetite for a referendum. And the institutional evolution driven by the Euro means that the union that Britain is a member of is changing. This creates pressures internal and external to the UK for a referendum, meaning that it may well be inevitable.
This is not a fight that Labour should fret about. It has the potential to push the Conservatives to the political margins, deepen Labour’s relations with business and contribute towards the creation of an improved EU.
Jonathan Todd is Labour Uncut’s economic columnist