British jobs for British workers: no politician should ever promise something that he knows is illegal under EU law

A retreat into economic nationalism would be a disaster for Britain

Predictably the global financial crisis has led to an outbreak of social and industrial unrest in recession-ravaged Britain. Not surprisingly, as unemployment rises rapidly, those in work fear for their jobs and those of their families (the number of people claiming unemployment benefit increased by 78,000 in December). When Total, a French-owned oil company, appears to insist on employing exclusively non-British contract workers at its Lindsey refinery in north Lincolnshire, it is hardly surprising that vulnerable "indigenous workers", in the phrase of Derek Simpson, joint general secretary of the Unite trade union, feel discriminated against and that simmering tensions erupt on to the streets, as they have elsewhere in Europe, notably in France, Greece and Iceland. Suddenly the highly charged issues of immigration, open global markets and UK membership of the EU are thrown into the already combustible mix of excessive indebtedness, greedy and reckless bankers, unpaid mortgages, and lost homes and jobs.

Yet there is no direct connection between the collapse of the financial markets, the credit crisis and the apparent insensitivity of the Lincolnshire refinery, which, until a failed attempt to broker a settlement, had seemed intent on taking a hardline stance against employing workers in Britain from Britain. Total's preference for Italian and Portuguese contractors has sparked a range of sympathy strikes among fellow refinery workers across the country. "You can't use the freedom of labour to the exclusion of indigenous labour," says Simpson.

The "wildcat strikes" have led to calls for protectionism - including statements, erratically, from the Labour Health Secretary, Alan Johnson - and attacks on the European Union, creating a strange alliance of Eurosceptic Tories and left-wing protectionists. This alliance should be resisted. A liberal labour market and EU membership have benefited Britain's economy and those who work within it. The labour market in the European Union works reasonably well: when there is genuine demand for work from the more affluent countries there is an influx of workers into Britain from eastern Europe. When that demand declines the reverse applies; the recession has led to a rapid decline in the number of eastern European migrant workers coming to Britain. Moreover, the market works both ways - British workers are employed outside Britain in different parts of the EU.

No one wishes to see a return to the protectionist era of the 1930s, when governments around the world were raising tariffs and when, between 1929 and 1934, world trade overall declined by as much as 66 per cent as countries sought to maximise their exports while minimising their imports.

Gordon Brown is right to warn, as he did at the Davos convention in Switzerland, against the dangers of "deglobalisation", to use an ugly if necessary neologism - against protectionism, while arguing for free and open markets. This is the true Brown: the Atlanticist, the disciple of Adam Smith and Ricardo, the free marketeer, though one with a social conscience and an instinct for redistribution.

Contrast this Brown with the crude, populist sloganeer of the 2007 Labour conference demanding "British jobs for British workers". No politician should ever promise something that he knows is illegal under EU law, especially while preparing for a general election. Voters do not take kindly to being treated as fools, and the disaffected refinery workers have rightly turned Brown's own slogan against him.

The New Statesman believes that we cannot return to the world of closed economies. The forces of globalisation, driven by new technologies such as the internet and the entertainment industry, are irresistible and irreversible. The way forward must be for governments, working in concert, to attempt to mitigate the effects of globalisation, to regulate markets more effectively, while keeping them free and open. The alternative, a retreat into protectionism and economic nationalism, would only make the present crisis even worse.

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