Labour needs a Commission on Europe

Such a Commission would ask hard questions, but also be more productive than David Cameron's opportunistic offer of a referendum.

So how should Labour respond to David Cameron and Nigel Farage on Europe? The reflex denunciations of opportunism and short-termism - Cameron as a Tory version of the 1970s Harold Wilson - are OK for the time being but do not take us very far.

Ed Miliband has done well to position Labour as not being hostile in principle to a referendum but politely asking where is the agreement to a new EU Treaty or to Britain's a la carte renogiation announced by the prime minister.

But this holding policy is not enough. When I was elected to the European Parliament in 1989 it was the beginning of Labour's decade of euphoria. Jacques Delors had made his famous Social Europe speech at the TUC and the Tories were destroyed by their ERM debacle and Maastricht divisions.

Tony Blair trashed Tory isolationism and mocked John Major 's feeble Europe policy.

When I stood down as leader of Labour MEPs in 2000, the uncritical EU enthusiasm was already fading. The Treasury did not like the Euro. Blair blocked or delayed key pro-worker directives. The Amsterdam and Nice Treaties did not lead to the abolition of Britain as John Redwood declared but nor did they make the EU work better.

North America or the BRICS were far more exciting in economic terms than slow growth Europe.

Foreign policy unity evaporated over Iraq. The Lib Dems came out for a referendum on the EU constitutional treaty, obliging Blair to follow rather than lead in setting the nation's Europe policy.

Europe became a hate word as a new generation of Tories headed by Cameron, Liam Fox, William Hague and IDS competed in scorning and rubbishing the EU. It was impossible to be selected as a Tory candidate unless an oath of dis-allegiance to the EU was sworn.

Cameron broke political links with centre right leaders like Angela Merkel, Nicolas Sarkozy and Jose Manuel Barroso. Nigel Farage emerged as Cameron's dark avatar saying in public what top Tories say in the tea room.

Month by month Cameron found himself being devoured by his own creation. Tory Europhobia took on its own life. It demanded the red meat of an in-out referendum.

Now Cameron has provoked a crisis in Europe with his overt willingness to accept Britain leaving the EU in 2017 and the consequent crisis that will rock Europe in a way not seen since the 1930s. So what should Labour's response be?

There is a short term flurry of Newsnight or Today appearances but Labour needs a long term strategic response to the European question.

After John Smith took over as Labour leader in 1992 he realized that the piece meal approach to the Thatcher revolution of the 1980s was insufficient. Shadow cabinet ministers did not have the capacity to think more widely beyond the demands of tactical Commons oppositionism.

Smith set up the Commission for Social Justice with a broad membership and a wide remit to come up with what turned into the modernized social democracy that won Labour three elections. It brought new younger thinkers and future politicians like David Miliband into active politics.

Ed Miliband should set up a wide ranging Commission on Europe to produce, ahead of the 2015 election, a wide ranging programme for Britain's future relationship with Europe. A Commission on Europe should have a membership well beyond Labour and should search new younger thinkers not the representatives of the Blair era pro Europeans. It should involve business leaders - not those who sign the usual letters to the FT on EU matters but new generation entrepreneurs. Seats should be reserved for thinkers from continental nations.

The Commission should ask hard questions about economic reform, including how to improve genuine cooperation that can lead to greater competitiveness while promoting social justice. It could examine why so many trade unions in the EU still feel comfortable with 20th century oppositionist and confrontational politics rather than the no-strike cooperation with capital that has preserved jobs and training in Nordic or German speaking Europe.

It should propose serious reforms to EU institution including the size and scope of the Commission and how national parliaments could have co-decision powers with the Parliament in Strasbourg.

The question of a referendum is part of the process. But in contrast to David Cameron's opportunistic vote seeking decision to begin by offering us a chance to quit Europe, a Commission on Europe would offer the fresh analysis and thinking that political parties have avoided for more than a decade.

Alan Donnelly was Leader of the Labour MEPs in the European Parliament


David Cameron gives a press conference after an EU summit last October. Photograph: Getty Images
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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.