Category: European Union

Corbynism (or why Nuneaton has a point)

I think Jeremy Corbyn would be an electoral disaster for the Labour Party from which it would take at least 10, probably 15 and quite possibly 20 years to recover. Too many of his supporters seem either indifferent to electoral success or utterly unaware of what that requires – but they’re right that the rest of us haven’t talked enough about policy. So here are a few of my concerns about his policies.

Jeremy says some things I support but don’t believe the British people will currently buy (a clear defence of higher taxes, though not necessarily his specific ones). There are also some I support and think they might well buy (universal childcare). But much of Corbynism isn’t just unelectable, but ill-thought-through, impractical and downright wrong.

Housing policy

Jeremy is calling for rent controls, with rent levels fixed in relation to earnings. Sounds wonderful: so why doesn’t Shelter buy it?

If you just cap prices in a situation where you haven’t got enough of something and too many people want to buy it, odd things start to happen. In this case, lots more people might sell rather than buy. Granted, we’ve all been saying we want more people to be able to buy homes. But what happens to people who can’t afford a deposit (or the still-uncapped mortgage payments) if the rental stock reduces too rapidly and the total housing supply doesn’t increase fast enough to match?

Will landlords just become more discriminating about people’s characteristics rather than the price they charge (‘No DSS’)? Will they cut back even further on things like repairs? Or will they subdivide properties more and more? More nuanced policies might be a different story (look at the rest of Europe, or the 2015 Labour manifesto), but just legislating a problem of supply and demand out of existence won’t work.

Jeremy is also proposing to extend some kind of ‘right to buy’ to the private sector. First of all, that seems a very odd spending priority for housing: our primary problem is insufficient stock, so why spend however much money on yet more subsidised ownership? (And since people in social housing have lower average incomes than private renters who can afford even a discounted property, isn’t it an odd distributional choice too?)

Second, how on earth would you control the cost? Right to buy may have done great damage, but at least councils actually owned the asset which was being flogged off: here, the state would have to pay the difference to landlords. (I suppose we could theoretically just take people’s property and give it to someone else at an enormous discount. Good luck getting that past the European Court of Human Rights.)

Third, why would you ever rent out a property if you could have it taken off you at any time? Like it or not, plenty of people can’t or don’t want to buy: they need a reliable private rented sector. By all means talk about how to improve it. But treating private rent with such abandon could really harm people who desperately need somewhere to live.

NATO membership

Jeremy has said he wants to leave NATO – our principal defence guarantee. Right now, our ‘if all else fails’ policy is NATO and, via NATO, the US commitment to Europe. We know that Jeremy doesn’t intend to raise defence spending way beyond 2% of GDP – it’s just about the only thing he’d definitely cut. There’s arguably an implicit defence guarantee in the EU treaties, and we have a European Defence Agency to co-operate on procurement, but these are a) pretty vestigial and b) exactly the kinds of things Jeremy won’t want the EU doing (assuming we stay in: see below).

So, given the rapidly rising costs of defence, Corbynism is offering us a radically reduced domestic capability, the abandonment of our key security guarantee and no replacement for either. That is not a defence policy. It’s crossing our fingers and hoping everyone will be nice to us forever.

EU membership

Jeremy has said he wants to fight for ‘a better Europe’, though we still don’t have a definite answer on how he’ll vote in the EU referendum.

Labour should, apparently, set out its own position on reform negotiations – which is fine as far as it goes. But almost nothing on David Cameron’s shopping list is going to appeal to Jeremy – and I doubt anything on Jeremy’s list will appeal to Cameron. The only real question is how much further Cameron will succeed in taking the EU away from Jeremy’s ideal.

If Jeremy might vote No, what would be his alternative? The European Economic Area (most of the free-market regulations without any say)? A Swiss model (slightly fewer regulations, slightly more say, but not a model the rest of Europe will ever offer)? No deal at all (and new tariffs on half our trade)? What makes him think Britain would discover the joys of radical socialism after voting with UKIP? And how does it help climate change negotiations to weaken one of the better players in said negotiations?

Again, this isn’t a policy. It’s a vague statement that the EU should be different, with no route map to change it.

The list goes on. You can’t talk about a ‘wealth tax on massive incomes’, fail to recognise that wealth and income are different things, conflate annual wealth taxes with one-off windfall taxes and expect to be taken seriously. You cannot talk about £50 billion of uncollected tax as though you can easily collect it in one fell swoop and expect anyone to think your sums add up. You cannot describe ‘not reducing our deficit as quickly’ as ‘funding’ free tuition and expect anyone to trust you not to wreck the public finances.

We’re not the Green Party: we’re supposed to be choosing a future Prime Minister. You cannot ask to govern a country with policies like these – not because they’re unelectable, but because they’re unworkable. Nuneaton wouldn’t buy Jeremy’s pitch: but we shouldn’t even be trying to sell it.

The single market: you can’t write the rules of the game on your own

It’s one of the interesting things about the Conservative Party’s EU crises: the militant Europhobes force the more moderate Eurosceptics to sound both more and less anti-EU. So we have David Cameron referring to the European Union’s achievements as a “precious thing” at the same time as he talks about using the eurozone crisis to repatriate powers from Brussels. Boris Johnson accepts that the City wouldn’t want the UK to find itself without a vote on single market rules, while he argues that we should opt out of pretty well everything else. And David Lidington talks about repatriation of powers, in order to “feel comfortable with membership of the EU”.

Lidington is no swivel-eyed Brussels-hater: he can see why some form of European co-operation matters. And clearly, you can have major opt-outs within an EU framework (the euro, the abolition of passport controls, large areas of justice and home affairs) – and this will increase for the UK and for at least some other EU member states, as the eurozone integrates further.

However, the fact that other EU member states are going to need to integrate further in order to make the eurozone viable does not mean that they will suddenly agree to grant the UK a whole series of opt-outs on existing agreements. The UK already has pretty much zero goodwill left right now with most of its European partners. It isn’t hard to see exactly what they would think of London for deciding to halt the very measures it has called for the eurozone to take – which it has called vital for the sake of the global economy – in order to settle a purely domestic debate about ‘Brussels’. Furthermore, they would be very likely to do exactly what they have already done with the Fiscal Compact: that is, move ahead outside the EU Treaties and hope to incorporate the new measures later on. Depending on the exact reforms involved, this could be more difficult to achieve, but the amount which can be done without Britain’s say-so is likely to be a great deal more than Tory hardliners like to think.

Part of the problem is that the British are underestimating the commitment, when push comes to shove, of most of Europe’s political elites to the euro. They always do. They assumed that EMU would never actually happen; then they assumed it would never launch in 1999; many of them assumed in 2011 that eurozone governments would let the eurozone fall apart. They won’t – partly because they’re terrified of the consequences (and rightly), but also because they are committed to European integration in a way which London is not. British elites (mostly) see the putative collapse of the euro as an economic disaster: so do most continental ones, but they also see it as a disaster for the European idea. In the end, therefore, the rest of Europe simply will not be willing to let British self-obsession wreck the whole show: and the experience of the Fiscal Compact shows that they will probably find a way to stop it from doing so.

The other point which the British fail to see is the way in which other governments view their particular demands. Many Britons talk about focusing on the single market and nothing else. For most other Europeans, social and employment law aren’t separate from the single market, but part of the package. In order to remove barriers among ourselves to commerce and trade, we have some common rules to ensure that national rules aren’t putting new barriers in place. Most of these are meant to ensure that our laws are similar enough that we can recognise each others’ and thus operate freely in each other’s countries. From the point of view of other Europeans, if we’re going to remove those barriers, then part of the common framework should be a certain set of minimum standards of how European workers are treated, to prevent a race to the bottom.

So other European governments are going to see this as an attempt to access the single market without playing by its rules – and to undercut their own businesses in the process, by being allowed to treat employees in a way which none of them would tolerate. This is one thing from developing countries, who frequently compete on labour costs, for obvious reasons: it’s quite another thing from a fully developed country which joined the Social Chapter over 15 years ago. Furthermore, it’s dangerous to the whole concept: if one country can unpick bits and pieces of the single market, why can’t another? And where does it all stop?

Some commentators in Britain talk about Germany as a potential ally in helping London here. If anything, Germany is likely to be particularly stern in its opposition: it takes rules seriously. Angela Merkel may well want Britain to be involved in moving the EU in a free-market direction: that’s different from letting Britain drop the regulations and leave the others to it.

It’s perfectly true that other EU members want to ensure that eurozone integration doesn’t exclude non-euro countries from decision-making about the single market, either in theory or in practice. That is a separate, crucial debate. However, no other EU government wants to unravel large parts of what the EU has already created or to allow one country to duck out of anything it sees as inconvenient. And they won’t allow Britain to impose it on them.

If I were an MP in today’s EU debate

“Mr Speaker, I do not intend to vote for the motion put forward by the right honourable Member for Bury North (Mr Nuttall). Nor do I intend to support the amendment from the right honourable Member for Brighton Pavilion (Ms Lucas). But I do accept that they have pointed, whether they intended to or not, to a failing which too many of us in this House have shared. For too long, we have allowed the case for European co-operation to go by default. We have allowed too many myths to root themselves in our debate about European co-operation. Those of us who believe in that project risk reaping a whirlwind in years to come: and the very incoherence of the motion before us exposes how much we have allowed to go by default.

“Perhaps the first thing honourable Members on all sides should recognise is this: the United Kingdom cannot, however many ballot papers its authorities may put together calling for any particular proposal on its relationship with the rest of the EU, impose that proposal upon its twenty-six fellow member states. This is not a matter of anti-democratic resistance by Berlin, Paris, Brussels or any other capital: it is simply a fact that this country has signed up to treaties, multilaterally negotiated and individually ratified, which impose obligations. If it wishes to leave, pure and simple, it may do so. It cannot rewrite the rules to suit itself, with major consequences for its neighbours, and then simply present the document for their signature.

“Any referendum question which proposes to guarantee anything more than our continued membership of, or definite departure from, the European Union is thus a fantasy. We might almost as well call a referendum on our preferred approach to devolution in Catalonia. There is no way that France, Germany or anyone else will let us use such a referendum as a means of overriding their own electorates – who, I should add, are very likely to see Conservative Members’ desire for opt-outs and half-way houses as the worst sort of social dumping. It cannot and will not pass. Honourable Members do no favours to their own call for an honest debate by touting such a proposal.

“The second thing honourable Members would do well to recognise is this: Britain’s departure from the European Union would not terminate the EU. However much some Members may wish it away, there will still be an organisation covering most European states, which pools sovereignty for common goals. Mr Speaker, to believe that our own policies will cease to be affected by the organisation including our most important trading partners, our nearest neighbours and our only direct borders is to believe in fairy tales. We might be a larger Norway – even a larger Switzerland – but, outside the EU, that is what we would be.

“This sort of fallacy has produced the absurdity where Britain, in return for not joining in an EU initiative, has to beg to be allowed into the very meetings which decide its fate. I am certainly not calling for British entry to the Eurozone now. But we cannot delude ourselves. The Eurozone crisis endangers our economy as much as anyone else’s. Not being in the euro allowed us the luxury of competitive devaluation in 2009; it may limit the size of our contribution to funding a solution to the crisis today. But if disaster strikes, it will not stop at the white cliffs of Dover; and not being in the Eurozone means we can do less to stop it from striking.

“Do we wish to be in that position in the Single Market, asking Ireland, or Denmark, or Finland, to put our case in the Council of Ministers as the rules are decided: rules which we must then accept as the price of access to that market? That is what Norway, Iceland, Liechtenstein and Switzerland do. Many in this place complain of this or that EU regulation as it is: do they believe that the other members of the Union will do a better job of stopping new ones without Britain at the table? We might be exempt from the Common Agricultural Policy and Common Fisheries Policy: but, Mr Speaker, does the House honestly believe that these are more important to the British economy than liberalising services – worth 70% of that economy?

“I agree with the Eurosceptics that this is about democracy. It is about co-operative democracy versus impotent separation. It is about the right of this country, sitting at the top table in Brussels, to share in decisions which affect us all – and defending that right from those whose dislike of shared decisions runs so deep that they prefer imposed decisions instead. We have, for far too long, allowed Eurosceptics to capture the language of democracy. Perhaps they believe that, so long as they keep ministers in London rather than in Brussels, it does not matter that they will be waiting by the fax rather than drawing up the text.

“Mr Speaker, if the House wishes to make our relationship with the EU more democratic, it could more profitably put its own affairs in order. Our Parliament is strikingly behind the times in scrutinising its government’s actions in the EU. Where is the campaign to make Ministers more accountable to this House for their decisions in Brussels? Who lobbies for the importation of the Danish, or Finnish, or Austrian models of scrutiny? Does the honourable Member for Bury North not worry that his honourable Friends have no input into their negotiating brief from this House?

“Too many of those who want to leave the EU do not really want to do it on democratic grounds at all. They want separation. They believe – perhaps they want to believe – that we can and should minimise our involvement with our nearest neighbours; they are willing to sacrifice great influence over all EU rules for the sake of meagre insulation from some EU rules. Mr Speaker, it is a very poor bargain for this country to strike.

“Mr Speaker, in return for pooling some sovereignty with our neighbours – and sacrificing some formal control over some decisions – we gain enormously in our practical ability to change the circumstances in which we find ourselves. The European Union requires us to share some formal power, but I can think of few political arrangements which do more to increase this country’s real power over its own destiny – on the economy, on environmental policy, on international trade, on relations with Iran.

“No credible government of this country is likely to support the wilder anti-Europeanism embodied in this motion: as the Foreign Secretary can testify, the most hardened Eurosceptic tends to make the most surprising accommodation to reality on entering office. The referendum questions are the definition of a false choice. They would do nothing to settle the divisions in Britain on this issue; they are no substitute for representative democracy doing its work. They are based on an entirely false set of assumptions about what Britain can and cannot demand; their purchase comes from an entirely false set of assumptions about the nature of our EU membership. That such a thin set of proposals can be seen as serious proposals shows how many myths pro-Europeans have left to fester.

“I believe it is time for pro-Europeans to nail their colours to the mast. I accept we have failed to make the case for Europe to many of our fellow citizens. But we cannot start to do that on the basis of a false set of choices. Nor can we do it by passing the buck to a referendum and relying on the natural tendency of referendums to favour the status quo. This is our job: I hope the House will reject the motion and then start doing it.”