Why Ed Miliband needs a Eurozone policy of his own

published in www.politics.co.uk 13 Dec 2011

With the help of a sulking Nick Clegg, Ed Miliband had a fine time in the House of Commons yesterday attacking David Cameron’s performance at the EU summit. He was fluent and confident and effectively repeated a simple message – Cameron failed and the country will suffer. It seems churlish to ask for more, but something vital was missing. Voters were given no reason to believe that an Ed Miliband Labour government would have done any better.

Ed Miliband and other Labour speakers have lined up to denounce Cameron for not securing allies at the summit. What allies would Labour have sought and for what purpose? What would Labour have offered to those potential allies – and what would Labour have treated as non-negotiable? All this is a mystery to voters, and so long as it remains so, Labour is too easily caricatured as a party which will sign up to any EU agreement, regardless of merit or national interest, to avoid isolation.

A few days ago Ed Miliband was attacked for responding to the Cameron veto on Twitter. Sadly, he had every reason to use Twitter because Labour’s policy on the eurozone crisis could easily fit into 140 characters. Does Labour that the euro can or should be saved? Does Labour think the present EU plan will save it? Has Labour any better alternative to the basic recipe in that plan – perpetual austerity for weak eurozone economies and the extinction of democratic control for all eurozone economies? And if the markets continue to turn against the euro, does Labour have any ideas for an orderly restoration of national currencies?

These are not academic issues. If the eurozone simply unravels, this will have immediate and terrifying consequences for the basic functioning of the world economy – and ours. No business and no family in Britain would escape their impact. So how would Ed Miliband and his team prevent them?

I have looked very hard for answers. I have not found them in Ed Miliband’s output. I have not found them from Ed Balls, the Shadow Chancellor, although he sends me messages regularly about his five-point plan for the British economy. There are good and bad things in that plan (for example, what is the point of cutting VAT on Ferraris?) but its prime common feature is its pervasive parochialism. It treats the British economy in isolation. It is a throwback to the era when British Chancellors tried to manage the British economy with modest domestic packages: I can almost hear Jim Callaghan saying “a touch on the tiller”.

A few weeks ago the Shadow Foreign Secretary, Douglas Alexander, delivered what was billed as a groundbreaking speech on Labour’s attitude to the EU. Most of it was familiar stuff… Britain must stay in to keep access to the single market and to amplify British influence in the world. The major new developments were a hardening of Labour’s position against joining the euro and a clumsily-worded suggestion that “we should engage now with the fact that Germany is seeking treaty change and seize this opportunity to safeguard the rights of non-euro members” – a general position very little different from David Cameron’s. He had nothing important to say about the future of the European economy and Britain’s relationship with it.

To be fair to Ed Miliband and his team, they are not alone in evading big decisions on European issues. All too often, Labour leaders have viewed them through the lens of domestic or internal party politics. The Attlee government missed a crucial chance to join the European Coal and Steel Community, forerunner of the Common Market, because Herbert Morrison was afraid of offending the Durham miners. Hugh Gaitskell lined up against the Common Market in 1962 partly from genuine belief in the Commonwealth but also because his stance united the Labour party. Harold Wilson, his successor, saw the issue almost entirely in terms of party management. It is fair to say that only two Labour leaders since the war have stuck to a personal position on European integration: Michael Foot against, John Smith for, and neither became Prime Minister.

Within the Labour party, European issues have never been as interesting as nuclear weapons, or public ownership, or foxhunting, or the party’s own rules and procedures. After the departure of the SDP, they were rarely if ever debated at Party Conference. The party’s hostility towards the EU softened in the 1980s only because Mrs Thatcher became so furious with it, not because of any real shift in the party. In the 1990s, Labour’s overwhelming objective was to exploit the convulsions over Europe in the Tory party and to present an image of unity and moderation. In consequence, internal debate on Europe was damped down even further. The party arrived in office in 1997 with almost no commitments on European issues and with very few MPs (in its landslide majority) with any kind of clear position on Europe.

The biggest European decision facing that government, on joining the euro, was resolved not by any guiding principle but by Tony Blair’s relationships with Gordon Brown and Rupert Murdoch. Much of its policy was invented by a rogue spin doctor in a pub. The five conditions for joining the euro were created after the government decided not to join. Both in boom and bust, that turned out to be a lucky choice and the party has done nothing about the euro since then except to congratulate itself on staying out of it.

Today, facing a coalition government on the edge of meltdown over Europe, it must be even more tempting for Ed Miliband and his team to follow Labour’s example in the 1990s – to attack the beleaguered Tory Premier and say as little as possible about their own policy.

That strategy carries a big political risk for Ed Miliband. It gives him a position by default. If he is against David Cameron’s decision, it means that he is for the EU agreement. If, as is only too likely, the agreement fails to resolve the eurozone crisis and there is a new EU crisis summit, many voters will think that David Cameron was right and Ed Miliband was wrong.

Ed Miliband now needs to get his name on a new plan for the European economy – something distinctively different from what is on offer now from both Angela Merkel and David Cameron. The plan should be based on getting jobs and growth back into all European economies, including ours – and on democratic control. If that entails the end of the euro as we know it, he should say so without tears.

By doing so, he would give voters a major reason to believe in his Premiership apart from not being David Cameron.

A former adviser to Denis Healey and Gerald Kaufman, Richard Heller in 1998 published Do Not Go Gentle Into That Good Night, to warn Labour against the euro. His new novel The Network http://www.amazon.co.uk/NETWORK-Richard-Heller/dp/0955674018/ref=sr_1_1?ie=UTF8&qid=1310120716&sr=8-1
ignores the eurozone crisis, as Jane Austen ignored the Napoleonic wars.

13. December 2011 by rkh
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