Labour must champion the expansion of the European single market

by Callum Anderson

With a new set of European Commissioners, along with Commission President Jean-Claude Juncker, having taken their posts in Brussels last November, the next five years could prove to be highly decisive Britain’s future within the European Union.

But, besides the ‘British question’, one of the biggest items on the Commission’s agenda will be how to effectively generate and sustain economic growth for its member states, so that they are all in a position to benefit from unimpeded export markets.

The single market has undoubtedly brought greater wealth and prosperity to its member states. Research has shown that the single market has increased EU GDP by at least two or three per cent since 1993, with exports and foreign direct investment receiving a particular boost in this time.

Indeed, lowering or completely removing trade barriers has created cost advantages compared to our international competitors, as well as intensifying competition within the single market itself.

Deutsche Bank has stated that reductions of barriers to intra-EU trade has also made the countries in the EU a more attractive place for investment by foreign firms. There are a whole host of UK-specific examples which illustrate this point.

More recently, the European Commission estimates that the EU’s Services Directive has already led to benefits of €100 billion (0.8 per cent of EU GDP).

This has resulted in direct benefits for consumers. For example, the EU established a single ‘Eurotariff’ to limit the cost of using a mobile phone within the EU, so that, since July 2010, mobile phone operators must warn customers when they are spending over £35 on data roaming, and cut customers off after they spend more than £42 in one month (unless the customer has previously agreed to pay a greater amount).

Yet there is still so much more that the EU can achieve over the period of the next five years to boost productivity and economic growth, and subsequently deliver economic growth to the 500 million people living within the EU.

Open Europe, a pro-EU think tank advocating European reform, has estimated that the benefits of greater liberalisation of sectors covered by the Services Directive could boost EU GDP by up to 2.3 per cent of EU GDP.

As globalisation develops, with countries such as China, India and Brazil (not to mention the next stream of developing countries such as Mexico, Turkey and Indonesia), it is going to be essential that the EU, with the UK at its heart, continues to push for extending the Single Market so that Member States can be competitive.

With our historical liberal-orientation on trade (save for a few examples such as the Corn Laws), the UK, led by a progressive government acting in the national interest, is perfectly placed to act as the main standard-bearers for trade, as well as preventing the EU to resorting to protectionist measures, which would have grave consequences for our economies.

A UK government truly acting in the national interests should be the champions of further extending the European Single Market. Doing so, will ensure that UK businesses can continue to develop and broaden its export markets with our European partners.

Indeed, consolidating the existing successes of the Single Market will not only enable Britain to grow high quality private sector employment and raise wages in real terms, but also cement place as a magnet for foreign direct investment.

But what is that we have?

A prime minister pandering to the anti-European, little Englander philosophy preached by UKIP and the Tory Right. One who is failing to show any diplomatic nous, vision or leadership regarding Britain’s role in the EU.

Meanwhile Ed Miliband, Douglas Alexander and Pat McFadden have (quietly) begun to make a robust case for Britain remaining at the heart of the EU, pushing genuine economic reform, and demonstrating their willingness to work collegiately with our European neighbours, and not consistently against them.

They and many others within the Labour movement must similarly follow their lead. For only Labour can and will champion the successful expansion of the single market. Not only will it bring benefits to British consumers but also British business. This represents a perfect opportunity for the shadow business and treasury teams to show the practical and pragmatic leadership that Britain needs.

Callum Anderson works at a national charity

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5 Responses to “Labour must champion the expansion of the European single market”

  1. Ex Labour says:

    Callum, you should stick to working for your charity rather than pen this niaive drivel, which I’m sad to say is becoming all too regular on this blog.

    I work in business and travel regularly in Europe to meet customers and suppliers and I have done so for the last 20 years. A single market has brought many benefits but also many restrictions and issues for the UK (and other members).

    Lets start with Junker. Here is a man who stands accused in his own country of being part of the establishment which created and perpetuated Luxembourgs tax haven status. The population of Luxembourg also rejected him as a politician, but somehow you suggest its going to get better with him in charge ?

    Just yesterday Ann Glover senior scientific advisor to the EU was booted out and her position abolished. Why ? Because she supported the use of GM crops and spoke up for their use. But guess what ? Luxembourg and Junker are absolutely against GM crops, so they abolished her position. EU democracy at work eh ?

    So far you, in the form of Labour, are happy to support a president without any political mandate, who allegedly was involved in creating tax havens and wants to rid the EU of cheaper and more plentiful food.

    You mention the BRIC’s nations but of course forget to mention that the UK as part of the single market cannot make trade deals directly with these countries – or any other country for that matter. We are shackled to the EU. The US is our biggest investor and yet we cant even discuss any trade with them. We have ex colonies where their citizens are no longer welcome in the UK, but we have to accept the dregs of Europe coming in without question.

    I know the “third sector” is stuffed full of Labour apperatchiks from the Brown and Blair era, but this kind of ill considered, embarrassing drivel is desperate and somone at Labour Uncut should really get some editoral policy in place.

  2. Michael Taylor says:

    In practice ‘single market’ directives have overwhelmingly had the effect of imposing costs and regulatory demands which have in practiced entrenched local and regional monopolies and oligopolies, at the expense of European consumers everywhere. There is a reason why prices of identical goods are almost always about 30% higher in the EU than the US, and these regional monopolies/oligopolies are it.

    The EU needs free trade, but what it has got is as Customs Union. Very different things.

    You don’t ‘Build a Free Market’, you ‘Build a Single Market’. The one implies economic liberalisation, the other implies statist dirigisme. You have to be blind not to spot which one rules the EU.

    So ‘Down the Single Market!’ and ‘Free the European Consumer’.

  3. Fred says:

    The same easily debunked tripe Anderson has written before. Public sector Labour supporter talks about business. Utter rubbish.

  4. Tafia says:

    More recently, the European Commission estimates that the EU’s Services Directive has already led to benefits of €100 billion (0.8 per cent of EU GDP).

    Sounds a lot – but it’s nothing . That’s less than a third of the Greek bail-out ( a country with a population only twice that of Scotland) and that will never be seen again, may as well have used it as bog roll or to light fires. Then there’s Spain, Italy, Portugal, Cyprus.

  5. swatantra says:

    kipling said it best east is east and west is west and ne’er the twain shall meet.
    the eastern bloc and the balkans should have stuck with Russia. they’ve been nothing more than a headache.

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