Tribune, 29 November 1991

Paul Anderson examines the tensions underlying Labour’s apparent unity on European policy
Giles Radice, the Labour MP for Durham North, de­scribes Labour’s change of policy on Europe as “perhaps the most profound and important in its post-war history”; the Sunday Timesquotes with approval a Tory backbencher calling it “the most spectacular conversion since St Paul saw the light”.
Indeed, party policy is emphati­cally not what it was in the early eighties. Then Labour called for British withdrawal from the Euro­pean Community. Now it is in favour in principle of economic and monetary union (EMU) and Euro­pean political union (EPU). It has spent much of the past year berat­ing the Government for its luke­warm attitude in the Intergov­ernmental Conferences on EMU and EPU in the run-up to next month’s summit in Maastricht. The Labour message today is that Britain under the Tories lags be­hind the other 11 EC countries on the single European currency, the European central bank, the Social Charter, greater powers for the European Parliament, qualified majority voting in the Council of Ministers and expansion of the EC.
As Neil Kinnock, Labour’s leader, put it this week: “It is essential that we are central to the process in the Community in order to serve the vital national interests of the United Kingdom in a future which is inextricably linked with that of the rest of Europe.”
It would be wrong, however, to exaggerate the extent of the transformation. Labour’s position falls a long way short of endorsing a fed­eral Europe. Indeed, it shows all the signs of being a compromise between Euro-enthusiasts and Euro-sceptics in the party leader­ship. It is skilfully constructed to allow everyone in the Parliamen­tary Labour Party but a handful of out-and-out federalists and diehard anti-Marketeers to inter­pret it as an endorsement of his or her own position – and it is quite feasible that Labour’s unity be­hind it will hold until the general election. But it is a compromise nonetheless.
The commitment to a European central bank is qualified by a call for an enhanced role for Ecofin, the Council of Economic and Finance Ministers. If Labour had its way, Ecofin would set the external ex­change rate of the new single cur­rency. According to the Shadow Chancellor, John Smith, this week, this means that interest rates would be determined in the medi­um term by “a dialogue between Ecofin and the central bank”.
The formulation is vague (al­though probably not vague enough to be acceptable to several EC countries, notably Germany, that want the central bank to be fully independent). But it is adequate to secure support not just from the PLP’s growing band of Euro-en­thusiasts but also from those MPs, many of them centre-left former anti-Marketeers, who are worried that a central bank will be politi­cally unaccountable and inevitably fiscally conservative.
Similarly, the agreement in principle to a single currency is hedged around with the proviso that “real economic convergence” takes place beforehand. Again, the phrase is indeterminate enough for those who want EMU in any event but just enough to placate the large number of PLP doubters who believe that, in its current state (and at the pound’s current valuation), the British economy simply cannot cope with EMU.
On political union, the story is much the same. Labour’s endorse­ment of greater powers for the Eu­ropean Parliament and qualified majority voting in the Council of Ministers on social and environ­ment policy is supported as a small step forward by Euro-enthusiasts; most Euro-sceptics are satisfied by its rejection of a “European federal super-state” and insistence that the EC be expanded as well as deepened.
In the same vein, Labour’s firm stance against a European defence community pleases both the major­ity of the Atlanticist Right, which is concerned not to undermine NATO, and the tendentially (but these days not overtly) nuclear-pacifist Left, which does not want the creation of a West European nuclear super-power.
It is a measure of the success of the compromise on Europe that only 16 anti-Market Labour MPs refused to back the Labour leader­ship’s amendment to the Govern­ment’s motion on Maastricht in the Commons last Thursday. A mix of hard-left Campaign Group members and Atlanticist Keynesian right-wingers, they do not constitute a coherent group.
Most would agree with the as­sertion of Peter Shore, the veteran right-wing Labour MP for Bethnal Green and Stepney, that “we shall find ourselves handcuffed and chained under economic and monetary union. No instruments of policy will be left for us to use”. Most would also accept his argument that British democratic self-gov­ernment is under threat. But the Campaign Group anti-Marketeers – now close to becoming a minori­ty even in the Campaign Group – are repelled by what they see as the anti-Market Labour right’s nationalist rhetoric, its assump­tion that common European foreign policies are wrong because they would downgrade Britain’s alliance with the United States, and its willingness to work with Tory right-wingers for a referendum on EMU. The Labour anti-Marketeers are unlikely to be able to put up much of a fight in the next few months.
Nevertheless, it is unlikely that party peace on Europe will be maintained much beyond the elec­tion, whether Labour wins or loses, if indeed .it lasts that long. Al­ready, politicians at every level of the party express worries, mostly off the record, about the ambiguities of the current policy.
By no means all of them are Eurosceptics. Although Mr Kinnock is scathing about federalism (“No one serious is arguing for it,” he told a press conference this week) there are plenty of Labour MPs, from Ken Livingstone and Harry Barnes on the hard left, through several senior shadow cabinet figures on the centre-left, to the traditional right-wing Euro-enthusiasts, who are now prepared more or less explicitly to advocate federalism, in some cases even expressing support for a European defence community.
If the government manages to steal Labour’s pro-Europe clothes by finding a way to sign the EPU and EMU treaties at Maastricht, there will be significant pressure for Labour to stop hedging its bets and adopt an even more pro-EC position before the general elec­tion.
But there will also be counter­vailing: pressure from Euroscep­tics, who, although diminished in number, remain a significant force even in the Shadow Cabinet. Ger­ald Kaufman, Bryan Gould, Margaret Beckett and Michael Meacher are discernibly cooler towards the EC than many of their colleagues, and will do what they can to resist embracing Europe any more enthusiastically either before or, more probably, after Britain goes to the polls.
There is little doubt that Labour is less divided on Europe than the Tories – but it is by no means as united as first impressions sug­gest. Even if the current compro­mise holds until the election, which is by no means certain, the party can look forward to some hard-fought battles over European policy in the next couple of years, particularly if it is in office.
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