Saturday 19 February 2011

Coalition has "hokey-cokey" approach to Europe, says Mandelson

Peter Mandelson has charged the Coalition government with risking British influence through a "hokey-cokey" policy of one leg in and one leg out on the EU.

"We are in our usual half-in, half-out state of mind", said Mandelson,
speaking at a Policy Network conference in London last week, where he was chairing a panel discussion with speakers including LibDem business secretary Vince Cable and former EU Commissioner Mario Monti. His hokey-cokey theme anticipated rather well today's Fabian conference - "Britain and Europe: In, Out or somewhere in between" which takes place in London from 11am today. Perhaps we should have gone for "shake it all about" instead in the title.

I am looking forward to Shirley Williams opening the conference. Shirley, who is a former Fabian General Secretary and ex-Chair of the Society, has had a frontline seat over the topsy-turvy debate over British EU membership, having been among the 69 Labour MPs who broke the 3-line whip to support Britain joining the EEC, and having had a frontline seat through developments including the 1975 referendum and the SDP-Labour split in which Europe was significant, to the tensions and debates of the Major, Blair/Brown and now Coalition era. Next Left will bring some news and views after the conference, and I would be interested to hear from those who attend.

Here are some more of Mandelson's comments at the recent Policy Network event.

"We know that our own economic future is intimately linked" with the success of the eurozone countries, said Mandelson. "But we are, as ever, terrified of the political and economic consequences of greater integration". The issue was not about Britain joining the euro, he stressed ("heaven forfend"), but about our ability to engage with or influence major strategic decisions about the future of the EU which would deeply affect us.

"The Coalition government gives a good impression of not knowing if it is coming or going on its European policy. It is very hokey-cokey, one leg in and one leg out, and try to keep the whole show on the road".

Mandelson's comments raised a wry smile from Liberal Democrat Business Secretary Vince Cable, who acknowledged that "we are operating in a political context". Cable said that he was seeking to pursue a policy which was pragmatic, engaged and "pro-European". "Within the eclectic range of views within the Coalition, we maintain that position quite well", insisted Cable.

Mandelson acknowledged that he could not develop his critique of current policy into a "Coalition-bashing tirade" since the Labour government had also had to respond to competing pressures over the EU, managing what he called "a sort of alright reconciliation" between the government's belief in pursuing national interests through EU engagement and political pressures

"We could hardly claim that we ended up with an absolute implementation of this European idea", he said, noting that he had himself become rather "impatient" with the government's approach after returning to Gordon Brown's government in 2008.


So is Britain always going to have a hokey-cokey approach to the European Union? What would positive outcomes could be achieved by less hesitant participation - and how should the political barriers to this be overcome?

I reported for Left Foot Forward that Shadow Europe Minister Wayne David told the Policy Network event that there was growing discussion of the pro-European case for an "in or out" referendum - and that the Labour party's policy review would consider what David, while unpersuaded, called a "finely balanced" question. Andrew Grice of The Independent reports on this today, in previewing the Fabian event. Jon Worth is sceptical, though not implacably opposed. Like several other voices at the Policy Network conference, he doubts that the "lance the boil" argument actually happens, and suggests that it instead crowds out a debate about the engagement within the EU that Britain should want, and that Labour and other pro-European forces should prioritise.

But Joe Litobarski for Comment is Free thinks any referendum, whoever brought it about, would result in a yes vote, and would finally shake it all about by forcing a debate on the EU.

While there is clearly a live, somewhat eye-catching discussion, the chances of Labour proposing an "in or out" referendum could easily become somewhat overstated. Wayne David noted that an increasing number of pro-European voices (like Keith Vaz) support the prospect, but it does remain a minority view. David's statement that an open policy review will consider an issue is, in itself, unremarkable, and there is little or no reason not to consider the question. While I think that there are good grounds to be confident of a Yes vote - and potential gains from one as a way to shift the longer-term debate - there is a strong argument right now that any additional period of uncertainty about Britain's medium-term future could send a damaging signal, particularly in terms of investment in the UK where our participation in the EU is seen as important for long-term decisions. It remains to be seen whether our second UK-wide national referendum in 35 years - on electoral reform - whets the appetite for more direct democracy, or rather suggests a risk of referendum fatigue.

It seems to me that a quite plausible and potentially attractive outcome could be for Labour, as a pro-European party, to set out a case or being agnostic to primarily Eurosceptic campaigns for an in/out referendum, without agitating for a referendum itself but nor seeking to oppose or block one either. As a pretty unitedly pro-European party, Labour will support the principle of membership, whether in the Commons or in the country, while also respecting the right of Eurosceptic parties and strands of opinion to disagree democratically over our national future.

Labour might, while making the public case for British engagement perhaps also take an active decision to not oppose future referendum calls, for example in the House of Commons. A referendum would not be Labour's priority, or campaign goal, but it could decide not to offer a veto or block either. It would then be for Eurosceptics to show that they could democratically mobilise sufficient support from those who want to challenge the status quo, or could win the argument within the Commons (and the Conservative Parliamentary party) for a referendum. If so, Labour would be ready to go and make the case before a public vote, and would not be actively seeking to prevent one. (If that was Labour's position, whether or not we had a referendum would depend on the balance of forces on the right. It would be for David Cameron to decide whether to follow Harold Wilson, in seeing a future referendum as a way to keep a party of different views together, or whether to block a vote for fear of splitting opinion).


On his own blog, Jon Worth critiques that emerging referendum discussion and the broader "in, out or somewhere else" framing of the Fabian event as frustrating, because it keeps the debate stuck. I am naturally somewhat sceptical about this challenge: it seems to me to underestimate the political challenges of securing public consent for the bolder multilateralism we will need.

Worth writes that - "The only way to really put these matters right is to push for greater democratic accountability of the EU’s institutions – federalism essentially – and ensure the individual decisions at EU level are themselves legitimate". This seems to insist on settling one of the central question at stake, so that concerns about the accountability of ever closer union can be dealt with best only by completing a process of full federal integration so that it can be more democratically accountable. Moves in this direction - whether directly elected European Parliament or the so-called citizens' convention have often disappointed their architects by not doing more to create a European demos. Most people's locus and conception of democratic accountability remains primarily national. The 'connect with the citizens through a constitutional response to the 'democratic deficit' - the focus of so much EU activity across the last decade often seemed to do rather more harm than good in terms of its own goals and objectives, though it could be legitimately countered that this also partly reflects a parallel failure to politicise the supra-national institutions and spaces in a way that might engage people.

Worth's challenge does raise the useful question of different ways to frame general public discussions about future European policy, particularly aimed at reaching beyond the super-committed in the party, for example in fringe meetings or conferences. The new Fabian Society and FEPS book "Europe's left in the crisis" attempts to address the broader themes, of how social democratic parties which know that 'social democracy in one country' has too little purchase on economic, environmental and security challenges do secure sufficient political consent to both secure power and to pursue an effective multilateral approach.

A related challenge for opposition parties is whether 'Europe' (and 'the international' more generally) is the bolt-on final chapter of a policy review process and manifesto, where everything that is expected is said, or whether one can break the essentially silo-based and segregated frame of "what future for Europe" and Europe as a "foreign policy" issue, and internationalise the approach to the central political and policy challenges - a new political economy, above all. If we don't do this, then the EU debate will be conducted by MEPs and those who strongly self-identify as pro-European as a matter of political identity. And these issues will remain as marginal as they have for the last decade.

In my view, asking "in, out or somewhere in between" can raise a useful set of challenges about the nature and purpose of the EU itself and the UK's engagement within it, which beyond the question of whether we remain members of the club to the nature of our engagement with it.

Firstly, I think a first principles discussion can be useful, both in demanding that we think about how to articulate an engaging foundational case for EU participation, but also in opening the opportunity to interrogate what "out" would mean - a question mostly absent from public debate, despite the prominence of Eurosceptic voices. Imagine, for example, that Britain were to vote to leave the EU and join EFTA. What are the gains and losses - in economics, in political influence, in sovereignty and power? For those who want to leave to "regain sovereignty" would this address the core issues? Or could issues of democratic disconnection be exacerbated - as a non-member state made budget contributions and accepted regulations without voting power or a seat at the table? Are there other forms of "out" in he real world which address these better? Or can advocates of "in" address the issues underpinning.

Secondly, more mysterious still is what "in between" positions are available in the EU we are in. A position which can come to terms with the post-Lisbon status quo but will be sceptical in interrogating future integration prospects is primarily in. By contrast, an approach which demands a fundamental renegotiation of British membership seems to be primarily about seeking a route towards a divorce, or perhaps more amicable separation. The government's EU Bill was intended to sate Eurosceptic appetities, yet has been widely criticised by its intended beneficiaries, who regard its Referendum Lock as meaningless. Bagehot of The Economist suggests it could be rather more potent de facto veto power than the grumpily dissatisfied Eurosceptics think. Labour's Wayne David has noted that the referendum lock proposals could conceivably lead to the odd situation of a large number of referendums on small technical issues, but not on profound strategic issues about the future of the EU: "There would be a referendum on changes to the role of the Advocate-General in the European Union but not on the accession of Turkey to EU membership, which is probably the biggest change to the EU for a generation".

British public opinion is "somewhere in between" - partly because of the hard scepticism of a vocal minority, and partly because most people have mixed and sometimes conflicting views. As YouGov'e polling for the Fabian Society and FEPS shows, we tend to think of the European Union as a bad thing, and too and yet we want its members to work more closely together than at present on all of the issues we care about.

Thirdly, the question of the future development of the EU we are in is changing fast, yet is barely being much discussed in the UK at all outside elite civil service, business or think-tank circles. There. The Economist's David Rennie also writes about this in a Policy Network collection previewing their conference.

Now, however, 2011 could turn out to be the year that a multispeed Europe starts to look more like a two-speed Europe, with an inner core impelled towards closer political and economic union by the need to rescue the single currency.

The UK risks becoming a marginal voice, as European decision making is increasingly centred around the euro area. The French and allies are pushing hard for summits restricted to euro area leaders, who would meet to discuss "European economic government" within their inner core. In plain English that means calls for interventionism and weaker competition rules and an industrial policy to subsidise "European champions". It would mean demands for "social and fiscal harmonisation" (meaning pressure on low-tax, more flexible places like Ireland or many ex-communist countries to raise their costs and stop competing with old Europe).

For a long time, it seemed that German policy would strongly prefer stronger economic integration in a Europe of 27, not a Europe of 17, preferring the balance of liberalisation and integration with the UK and Scandinavian countries involved. Contested Franco-German moves towards greater economic coordination and "economic governance" might herald a major shift in this position.

Both Mandelson and former EU Commissioner Mario Monti, who remains influential in the EU as author of the "new strategy for the single market" paper acknowledged last week that critics of the initial design of the Eurozone were right about the need for much closer economic cooperation to make a single currency work.

"Many said at the time, and they were right but mostly ignored, that EMU needed a much stronger political and policy framework if it was to function in an optimal way", said Mandelson. It was now vital to "reanchor the Euro area in firmer foundations" for the success of all of the EU economies, including those like the UK which were outside the euro, he said, acknowledging the difficulties of doing so given diverse economies with a single interest rate, limited labour mobility, and internal imbalances of trade.

"It was a big mistake of the construct called EMU [Economic and Monetary Union] to pay so much attention to the M of EMU and to leave the E, economic integration, so much in the background". This was the point on which academic critics who had said the Euro would never see the light of day should have been listened to, said Monti.

Britain is outside the Eurozone, and will choose not to take part in the new bailout fund. The domestic political legitimacy challenge looks too great to choose to 'buy' a seat at the table. As the Financial Times reported this week, Nick Clegg and David Cameron have also been engaged in a significant Whitehall argument about whether and how far Britain should engage in the eurozone discussions from outside, where major economic questions

The divergences not just in policy but also between the discourse of British domestic political debate on the EU and the emerging developments in the eurozone perhaps suggest a drearily familiar theme that "somewhere in between" is the European position which British policy habitually gravitates towards.

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