Labour divisions over EU emerge as MPs launch pro-referendum group

Labour for a Referendum, which has the support of 15 MPs, aims to force Miliband to commit to holding an in/out EU referendum after the next election.

In recent weeks, Ed Miliband has had much fun mocking the Tories' divisions over Europe, but his party now faces some of its own. A new group - Labour for a Referendum - will be launched today with the aim of forcing Miliband to commit to holding an in/out vote on EU membership after the next election. The organisation has the support of 15 Labour MPs, including Keith Vaz (a former Europe minister) and former Northern Ireland spokesman Jim Dowd, three Labour council leaders and more than 50 councillors. It is directed by Labour activist Dominic Moffitt and chaired by John Mills, the founder and chairman of JML and a party donor. 

Vaz said:

I believe that it is the democratic right of the people to make that decision for themselves. I support Labour for a Referendum’s call for the party to support a referendum in our next manifesto.

Dowd said: 

I have been a supporter of this cause for many years and firmly believe the Labour Party must commit to a referendum before the European elections  next year. As the Tories tear themselves apart over this issue, Labour for a Referendum provides the opportunity to unite the party on giving the people a say on our future in the EU.

Its parliamentary supporters are a mixture of the Labour left, who regard the EU as a capitalist club, and the Labour right, who lament its erosion of national sovereignty. Here's the full list: Ronnie Campbell, Rosie Cooper, John Cryer, Ian Davidson, Jim Dowd, Natascha Engel, Frank Field, Roger Godsiff, Kate Hoey, Kelvin Hopkins, John McDonnell, Austin Mitchell, Grahame Morris, Graham Stringer, Keith Vaz.

Three of these MPs, Cryer, Hoey and Hopkins, have also offered their support for the Tory amendment "regretting" the absence of an EU referendum bill from the Queen's Speech.

After Miliband used his speech at the weekend to Progress to reaffirm his opposition to an EU referendum pledge (at least for now), the group warns that Labour "must not let the Conservatives and Liberal Democrats steal a march on this issue and potentially prevent Ed Miliband standing on the steps of Number 10 in 2015." While most in Labour rightly recognise that the EU is not a priority for voters (just 1 per cent name it as "the most important issue" facing Britain and just 7 per cent name it as one of "the most important issues"), some shadow cabinet ministers are concerned that the party could suffer if Miliband is seen to be denying the people a say.

With this in mind, the group highlights past quotes from Ed Balls and Jon Cruddas suggesting that Labour should consider pledging to hold a referendum if elected. Balls said in February: "As long as we don’t allow ourselves to be caricatured as an anti-referendum party, which we’re not – we’ve absolutely not ruled out a referendum...if we allow ourselves either to be the ‘status quo party’ on Europe, or the ‘anti-referendum party’ on Europe, then we’ve got a problem...I think we would be pretty stupid to allow ourselves to get into either of those positions", while Cruddas, speaking before his appointment as the head of Labour's policy review, said in October 2011: "This is about democracy. This is about respecting the people. Successive generations have not had a say on the European debate. This will fester until a proper open discussion is allowed. If we do not have a real referendum then anger and resentment will grow. We have to be bold and let the people into this conversation."

While Miliband has (rightly, in my view) refused to match Cameron's offer of an in/out referendum, it's worth noting that he has said that Labour would not repeal the coalition's EU "referendum lock" under which a public vote is triggered whenever there is a transfer of powers to Brussels. But today's launch will increase the pressure on him to signal that the promise of a referendum on EU membership is at least under consideration for inclusion in the party's manifesto.

It's worth remembering, of course, that it was once Labour, not the Conservatives, that was most divided over Europe. The 1975 referendum on EEC membership was called by Harold Wilson after his cabinet proved unable to agree a joint position (Wilson subsequently suspended collective ministerial responsibility and allowed ministers to campaign for either side, an option that David Cameron may well be forced to consider) and Michael Foot's support for withdrawal was one of the main causes of the SDP split in 1981. Today's launch is a reminder that those divisions have not entirely been consigned to history. While the Tories are now split between 'inners' and 'outers', in Labour the fundamental europhile-eurosceptic divide persists. 

Labour for a Referendum warns that the party "must not let the Conservatives and Liberal Democrats steal a march on this issue". Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Getty Images.
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How austere will Philip Hammond be?

The Chancellor must choose between softening or abandoning George Osborne's approach in his Autumn Statement. 

After becoming Chancellor, Philip Hammond was swift to confirm that George Osborne's budget surplus target would be abandoned. The move was hailed by some as the beginning of a new era of fiscal policy - but it was more modest than it appeared. Rather than a statement of principle, the abandonment of the 2019-20 target was merely an acceptance of reality. In the absence of additional spending cuts or tax rises, it would inevitably be missed (as Osborne himself recognised following the EU referendum). The decision did not represent, as some suggested, "the end of austerity".

Ahead of his first Autumn Statement on 23 November, the defining choice facing Hammond is whether to make a more radical break. As a new Resolution Foundation report notes, the Chancellor could either delay the surplus target (the conservative option) or embrace an alternative goal. Were he to seek a current budget suplus, rather than an overall one (as Labour pledged at the last general election), Hammond would avoid the need for further austerity and give himself up to £17bn of headroom. This would allow him to borrow for investment and to provide support for the "just managing" families (as Theresa May calls them) who will be squeezed by the continuing benefits freeze.

Alternatively, should Hammond merely delay Osborne's surplus target by a year (to 2020-21), he would be forced to impose an additional £9bn of tax rises or spending cuts. Were he to reject any further fiscal tightening, a surplus would not be achieved until 2023-24 - too late to be politically relevant. 

The most logical option, as the Resolution Foundation concludes, is for Hammond to target a current surplus. But since entering office, both he and May have emphasised their continuing commitment to fiscal conservatism ("He talks about austerity – I call it living within our means," the latter told Jeremy Corbyn at her first PMQs). For Hammond to abandon the goal of the UK's first budget surplus since 2001-02 would be a defining moment. 

George Eaton is political editor of the New Statesman.