Monday, 14 October 2013

EU membership is incompatible with Labour ideology

by Marc Glendening - Campaign director

Ed Miliband's promise to freeze energy prices, whilst simultaneously supporting movement towards a European Single Market in energy, indicates that he, like most of the Labour mainstream, have not thought through the implications of EU membership for social democratic politics.

They refuse to confront the inconvenient contradiction that exists between adhering to certain types of left-of-centre objectives and blind adherence to the EU status quo.

In addition to the Labour leader's commitment to block energy price rises, he recently announced a plan to force UK companies to create a new apprenticeship for a British citizen for every worker they employ from outside the EU. However, it would be illegal under Single Market rules for a Labour government to restrict apprenticeships to UK nationals.

Then there was the vote at the Labour conference on September 25th to renationalise the railways and postal services. Again, not possible so long as Britain remains within the EU.

Brussels is in the process of liberalising these areas of public provision that, on the railways, started with 1991's EU directive 91/440 requiring a division between the operation of transport services and infrastructure management, both with budgets and accounting "separate from those of the State."
[Article 4]

Various EU postal services directives have already seen the most profitable parts of the Royal Mail put out to tender and the latest requires "full market access" to the Royal Mail's business, leaving no realistic option other than privatisation.

Legal appeals

As the Head of Legal website argues, were Labour after 2015 to impose price restrictions on the energy companies this could result in legal appeals by the companies to the European Commission. The EU directives relating to gas and electricity do allow for state intervention in some circumstances relating to 'public interest' and it could be around how this is defined in practice that might open the door for legal challenges.

Whether or not a future Labour government was acting in a non-discriminatory manner (that is to say, not giving certain types of business an advantage over their competitors, in the UK and also across the Single Market) could also be the key to whether price controls in this area were considered acceptable by Brussels. Poland is in the process of being taken to court by the Commission for price regulation.

If the Labour leader seeks to make his price restrictions more acceptable to the energy companies through the offer of state subsidies to cushion their loss of profit, he could also find himself being challenged by the Commission, again on the grounds that this would give UK-based companies an advantage over firms operating from the continent who would not by definition receive this benefit of the freeze in prices. 

Contradictions unchallenged

There seems little inclination on the part of most of those on the centre and right of the party to take on honestly the severe restrictions that EU membership places on Labour to pursue centre-left  polices.

At the Fabian Society debate Preventing a Lost Decade: How Can We Make Europe Work for Growth? at the recent Labour conference, I asked Catherine Stihler MEP how she could reconcile being, as you might expect given her position, an ardent supporter of EU membership and opponent of a referendum, with the Laval and Viking rulings by the European Court of Justice?

These rulings essentially render national minimum wage laws and nationally determined agreements between employers and unions an irrelevance by allowing firms to transport workers from their own countries and to undercut local labour.

The interests of multinational companies now officially take precedence over democratically determined national laws and those of trade unions.

You would have thought, for someone who purports to represent the party of trade unionism and who places the interests of workers over those of big capital, this should not represent such a huge personal dilemma. However, Ms Stihler had no coherent response, that I could ascertain anyway, as to how she resolves this ambiguity.

Ideology hits back

The truth is that all theoretically left-of-centre MEPs have got around this dilemma by, in reality, prioritising the interests of the Single Market and the EU in general over the political philosophy to which they supposedly adhere.

The truth is that, as Karl Marx would have argued, contradictions can't remain contradictions in practice.They get worked out by what people actually do, not what they say.

There are, however, a growing number within the Labour party and trade union movement who do now get it and are prepared to confront the inherent contradiction between desiring social democratic objectives and Britain being in an organisation that is constitutionally committed by EU treaty to the disciplines of the Single Market.

My hope is that more on the left will pipe up and force Mr Miliband to explain what, should he become PM, he will do if Brussels tells him to abandon his energy and apprentice-related promises.

And what will he do if the Commission insists that the EU Services directive is finally applied to the NHS? Does the Labour leader have any political bottom line when it comes to EU membership?

I think we should be told.

written by Marc Glendening - Campaign director, Democracy Movement

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