Cameron's prescriptions for Europe miss the point (again)

The Prime Minister wants to talk about growth, but recognising the impact of German plans for collec

David Cameron wants Britain to play an integral role in reforming the European Union. He really does. His speech in Davos today explained how he is committed to reviving the continent's flagging economies with an agenda for boosting growth - deregulation; liberalisation, competitive taxation.

This is a familiar tune. Britain's position under Labour wasn't so very different - accepting a degree of political integration as the necessary price for creating an open, free trading space of continental scale and hoping, over time, to make that space look more like the UK economy and less like the French one.

The problem now, as I wrote in my column this week, is that the kind of diplomacy that is required actually to drive that agenda in the European Council - involving compromise, long-term nurturing of relationships with EU leaders; demonstrations of commitment to the European project - is also the kind of behaviour that the Conservative party generally finds unacceptable in a leader. In other words, Cameron can say this stuff, but he is no closer to getting it done if he can't build the strategic majorities among fellow EU member states to make it happen.

But there is another problem. Cameron's analysis of the EU's growth problems necessarily has to exclude discussion of the effect on demand of choreographed mass austerity - to concede that point would be to admit that the same force is in play in Britain. But clearly this is an issue. In his speech, the Prime Minister praised efforts by eurozone countries to bring their public finances under control - the drive for a fiscal compact led by German Chancellor Angela Merkel - but warned that it was not enough. He encourages the single currency bloc to consider issuing euro-bonds and effecting transfers between states - a true fiscal union, in other words. He essentially told Merkel to dip into her budget to save the euro.

If Cameron understands the inadequacy of Merkel's plans at the level of budget imbalances inside the eurozone, why does he not understand the related problem of German-enforced austerity for the continent draining aggregate demand? Why does he insist on offering only long-term supply-side solutions to the problem of European growth? The answer, I suspect, is that the government does understand the issue but it is taboo because of the coalition's political commitment to make austerity a morally inviolate part of domestic economic policy.

There was a meeting last week of the Franco-British Colloque - a top-level club of politicians, academics, business leaders etc to discuss cross-channel issues. It meets annually and this time the gathering was held in the UK. George Osborne was there and, someone who was present tells me, in the discussions of the EU's growth problem, the Chancellor effectively acknowledged the macroeconomic case against collective European austerity. He simply couldn't accept that it was relevant to the policies he is deploying in Britain. Treasury economists will surely be telling him the same thing: Merkel's fetish for fiscal conservatism is going to drag Europe down.

If Cameron wants to take a lead in promoting growth in Europe he could start by making that point. He can't of course, at least not without repudiating the central tenet of his government's economic policy.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

Photo: Getty
Show Hide image

Unite stewards urge members to back Owen Smith

In a letter to Unite members, the officials have called for a vote for the longshot candidate.

29 Unite officials have broken ranks and thrown their weight behind Owen Smith’s longshot bid for the Labour leadership in an open letter to their members.

The officials serve as stewards, conveners and negotiators in Britain’s aerospace and shipbuilding industries, and are believed in part to be driven by Jeremy Corbyn’s longstanding opposition to the nuclear deterrent and defence spending more generally.

In the letter to Unite members, who are believed to have been signed up in large numbers to vote in the Labour leadership race, the stewards highlight Smith’s support for extra funding in the NHS and his vision for an industrial strategy.

Corbyn was endorsed by Unite, Labour's largest affliated union and the largest trades union in the country, following votes by Unite's ruling executive committee and policy conference. 

Although few expect the intervention to have a decisive role in the Labour leadership, regarded as a formality for Corbyn, the opposition of Unite workers in these industries may prove significant in Len McCluskey’s bid to be re-elected as general secretary of Unite.

 

The full letter is below:

Britain needs a Labour Government to defend jobs, industry and skills and to promote strong trade unions. As convenors and shop stewards in the manufacturing, defence, aerospace and energy sectors we believe that Owen Smith is the best candidate to lead the Labour Party in opposition and in government.

Owen has made clear his support for the industries we work in. He has spelt out his vision for an industrial strategy which supports great British businesses: investing in infrastructure, research and development, skills and training. He has set out ways to back British industry with new procurement rules to protect jobs and contracts from being outsourced to the lowest bidder. He has demanded a seat at the table during the Brexit negotiations to defend trade union and workers’ rights. Defending manufacturing jobs threatened by Brexit must be at the forefront of the negotiations. He has called for the final deal to be put to the British people via a second referendum or at a general election.

But Owen has also talked about the issues which affect our families and our communities. Investing £60 billion extra over 5 years in the NHS funded through new taxes on the wealthiest. Building 300,000 new homes a year over 5 years, half of which should be social housing. Investing in Sure Start schemes by scrapping the charitable status of private schools. That’s why we are backing Owen.

The Labour Party is at a crossroads. We cannot ignore reality – we need to be radical but we also need to be credible – capable of winning the support of the British people. We need an effective Opposition and we need a Labour Government to put policies into practice that will defend our members’ and their families’ interests. That’s why we are backing Owen.

Steve Hibbert, Convenor Rolls Royce, Derby
Howard Turner, Senior Steward, Walter Frank & Sons Limited
Danny Coleman, Branch Secretary, GE Aviation, Wales
Karl Daly, Deputy Convenor, Rolls Royce, Derby
Nigel Stott, Convenor, BASSA, British Airways
John Brough, Works Convenor, Rolls Royce, Barnoldswick
John Bennett, Site Convenor, Babcock Marine, Devonport, Plymouth
Kevin Langford, Mechanical Convenor, Babcock, Devonport, Plymouth
John McAllister, Convenor, Vector Aerospace Helicopter Services
Garry Andrews, Works Convenor, Rolls Royce, Sunderland
Steve Froggatt, Deputy Convenor, Rolls Royce, Derby
Jim McGivern, Convenor, Rolls Royce, Derby
Alan Bird, Chairman & Senior Rep, Rolls Royce, Derby
Raymond Duguid, Convenor, Babcock, Rosyth
Steve Duke, Senior Staff Rep, Rolls Royce, Barnoldswick
Paul Welsh, Works Convenor, Brush Electrical Machines, Loughborough
Bob Holmes, Manual Convenor, BAE Systems, Warton, Lancs
Simon Hemmings, Staff Convenor, Rolls Royce, Derby
Mick Forbes, Works Convenor, GKN, Birmingham
Ian Bestwick, Chief Negotiator, Rolls Royce Submarines, Derby
Mark Barron, Senior Staff Rep, Pallion, Sunderland
Ian Hodgkison, Chief Negotiator, PCO, Rolls Royce
Joe O’Gorman, Convenor, BAE Systems, Maritime Services, Portsmouth
Azza Samms, Manual Workers Convenor, BAE Systems Submarines, Barrow
Dave Thompson, Staff Convenor, BAE Systems Submarines, Barrow
Tim Griffiths, Convenor, BAE Systems Submarines, Barrow
Paul Blake, Convenor, Princess Yachts, Plymouth
Steve Jones, Convenor, Rolls Royce, Bristol
Colin Gosling, Senior Rep, Siemens Traffic Solutions, Poole

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.