Ed Davey: this is a pro-European coalition

Lib Dem Energy Secretary claims the government is more pro-European than Labour was.

For those Tories convinced that David Cameron has sold out to the europhile Lib Dems, Ed Davey's interview with Rafael Behr [which appears in this week's New Statesman] is powerful evidence. The Energy Secretary declares that the coalition may come to be seen as "more constructive, more engaged and indeed more pro-European than its Labour predecessor".

He mischievously adds:

It's not just Liberal Democrat ministers but Conservative ministers who are really engaged with their European counterparts.

Some of the relationships that he [Cameron] is building are very important. What the coalition government is showing time and again is that by engaging with Europe you actually look after Britain’s national interest more effectively.

His comments are tailor-made to provoke a eurosceptic backlash against Cameron - many Tory MPs are still furious that the Prime Minister hasn't delivered on his promise to "repatriate powers" from Brussels.

Elsewhere, Davey insists that Britain could still join the euro in the future [if not before 2020]:

You’d be an unwise person to ever rule something out totally.

You just don’t know what’s going to happen and given the uncertainties in our economy, I think it would be reckless to rule any of your options out.

It's notable that the Lib Dems are now the only one of the three main parties not to rule out euro membership. For Labour, Ed Balls has declared that "there's no possibility anytime in my lifetime of a British government joining the euro", while the Tories have long ruled out membership of the single currency. 

But Davey is far from the only political figure to suggest we could still give up the pound. Here's a list of some of the most notable.

Tony Blair, 13 November 2011

"I think we will join the euro. I think the chances are the euro will survive because the determination, particularly of the French and the Germans, is to maintain the coherence that they've created in Europe."

Michael Heseltine, 20 November 2011

"So should Britain join the euro now? Of course not. But we should not exclude the possibility. This is what separates us from the eurosceptics. We still say that if it becomes in Britain's interest to join we should. They say that even if it were in Britain's interest to join we shouldn't.This could -- sooner than we think -- become much more than just an academic question."

Paddy Ashdown, 21 November 2011 (£)

"If and when the economic circumstances were right and to Britain's advantage, we should certainly consider doing so [joining the euro]."

Peter Mandelson, 14 November 2011

"He [David Cameron] should say that while it was right for Britain not to join the single currency as it was previously constructed, if Germany were to act responsibly, Britain would peg sterling to a reformed euro and in the long run even consider joining the regime."

Ken Clarke, 25 July 2011

"Certainly nothing is going to happen in the next decade but I find never say never in politics is a very good rule".

Energy Secretary Ed Davey said it would be "reckless" to rule out euro membership.

George Eaton is political editor of the New Statesman.

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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.