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If it is to be a "one nation" party, Labour must support an EU referendum

Miliband is making a strategic mistake by aligning the party with an EU political elite intent on exerting control over all 27 members states, regardless of the wishes of each electorate.

Workers walk over a giant EU flag in front of the Parliament building in Bucharest, Romania. Photograph: Getty Images.

What does the one nation ideal mean for Labour’s approach to an in-out referendum on our EU membership? The term 'one nation' surely implies an end to class war politics and an equal voice in the democratic system for individuals from all sections of society. Rule by elites who act in their own interests at the expense of the rank and file, is the main danger to be avoided. If so, on what principled grounds could a one nation political party oppose an EU referendum?

Well into the 1980s Labour was sceptical about the EU. When I was a member of the party in Newcastle upon Tyne at the time of the 1975 referendum, the overwhelming view of members was that the Common Market (as it was then called) was dominated by the interests of business corporations. Rank and file workers counted for little. This view prevailed into the 1980s and was empirically confirmed by the actions of the Thatcher government in 1986.

The claim that the common market was largely an economic co-prosperity zone had some plausibility at the time of the 1975 referendum. It was possible for a nation to veto decisions that were against the interests of its people. So long as this safeguard remained, the EU might have developed into a mutually beneficial system of international co-operation. But the big countries wanted to be able to impose their wishes on other member states. The turning point came with the Single European Act of 1986, which was actively supported by the Thatcher government. The national veto was replaced by qualified majority voting (QMV) in a dozen key areas, including the single market, monetary co-operation and social policy.

In her book Statecraft, Thatcher explained that she supported the wider use of majority voting because she wished to force the other EU countries to eliminate "non-tariff barriers" to trade, which "operated through different national standards on health and safety, regulations and public procurement policies which discriminated against foreign products, and over-elaborate customs procedures". She wanted the power to outvote other countries, because she thought Britain would gain at the expense of other EU members, especially in providing services. Without the increase in majority voting, she said, "the programme itself could not have been driven through in the face of vested interests in member countries whose governments would have been under immense pressure to use the veto".

Her intention had been to impose de-regulation, but ten years later she admitted that harmful regulation had increased. She acknowledged two mistakes. She had naively believed that powers given to the EU to force through the single market would not be used for other purposes. And she had misunderstood the intentions of other leaders. The single market for them was "a device for centralising more decision-making in the hands of Europe".

In truth, she fell into a trap set up the centralisers. They knew she wanted to deregulate to strengthen the single market, and offered her the chance to coerce other EU members, with the intention of using the self-same powers to force the hand of Thatcher and future British governments. In the end, the Single European Act not only failed to extend the single market, Thatcher concluded that its powers had been "abused in order to push corporatist and collectivist legislation upon Britain by the back door". Her intention had been to impose de-regulation on other countries "by the back door" but they had turned the tables on her. The overall effect had been to "reduce Britain’s ability to compete successfully".

The Conservative Party, which had once prided itself on its patriotism, had under Thatcher been willing to surrender self-government for the paltry gain of a bigger market share for UK service providers in other EU countries. Thatcher at least admitted her mistake and perhaps her admission may serve as a warning to the current government. They could usefully take into account the alternative view that Thatcher advocated in Statecraft. She argued that the strategy of a "level playing field" was not as attractive as it sounded. Harmonisation often entrenched unwise regulation. A better approach would have been to allow different nations to compete to discover the best conditions for enterprise. She quotes J.S. Mill, who had argued that Europe owed its success to the ‘plurality of paths’ followed by different nations.

In saying this, she got close to understanding one of the strongest arguments for democratic self-government, one that was stressed constantly by liberal writers including Hayek, the thinker most admired by Thatcher. Human imperfection was such that we should be wary of giving any agency coercive power. In particular, our institutions should avoid granting exclusive or monopoly power, and instead should allow for reflection, double-checking, and the correction of mistakes in the light of experience. We should aim for an open society in which different ideas can be tried out, and in which creativity and innovation can flourish. Just as a competitive market allows consumers to compare companies, so national independence allows comparison between national systems, including their regulatory regimes. Moreover, democracy depends on nations. They make the ideal of government by consent a realistic hope, and the accountability of leaders a practical possibility.

One country could choose to have greater respect for trade unions and stronger workplace protection and set an example to others of what it believes to be best. Another could have light-touch regulation and offer itself for the critical judgment of other peoples. Over time each can learn from the other.

Until the 1980s it had been the policy of Labour to preserve national independence and Ed Miliband’s use of the term 'one nation' seemed to suggest a renewal of that tradition. But at present, Labour’s leadership is in danger of making a strategic mistake by aligning the party with an EU political elite intent on exerting control over all 27 EU nations, regardless of the wishes of each electorate. The ‘one-nation’ theme of recent speeches surely implies respect for the democratically-expressed views of the people of each nation. Not, it seems, if they want to secure independence from the EU. And yet it was Thatcher who willingly surrendered our powers of self-government. Moreover, David Cameron is no better than Thatcher. Cameron has advanced no principled defence of our independence and tacitly upholds the command-and-control mentality of Europe’s self-chosen elite. Labour is missing a chance to be the voice of the public spirited majority.

David Green is director of Civitas