The EU flag blows at Reichstag building is on October 01, 2013 in Berlin. Photograph: Getty Images.
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How Labour will work for real change in Europe

We need to boost Europe’s competitiveness, avoid a race to the bottom on skills and wages and ensure EU migrants contribute to our economy and our society.

This week Ed Miliband made clear that a Labour government will be as bold in defending membership of the EU as we are in pushing for real change in Europe. Because being willing to speak up for our place in Europe, does not mean being deaf to the concerns that some people have about our membership.

Securing Britain’s future in Europe means the UK needs to work for change within Europe: setting out how the EU can be made to work better for Britain. That is why Labour has set out a reform agenda focused on boosting Europe’s competitiveness, avoiding a race to the bottom on skills and wages and ensuring people coming to the UK from other EU countries seeking work contribute to our economy and our society.

First, on the economy, our reforms will help deliver a Europe focused on jobs and growth, not more austerity and rising unemployment.  An EU Commissioner for growth, and an independent audit of the impact of any new piece of legislation on growth, would be key to helping re-focusing Europe towards this key task. Ed Miliband also announced that Labour is working with British businesses – through the CBI – to agree a plan for the completion of the Single Market in key sectors like digital and services, helping create new jobs and expand our economy in the years ahead.

Second, we will put in place reforms to help do more to ensure that EU migrants contribute to our economy, and to our society. We will work for greater flexibility on transitional arrangements for new member states, including extending the period of time that people from them have to wait before being able to come to the UK to look for work. But EU migration is not just about who should be able to come to the UK, it is also about what those already here should be entitled to. That is why Ed Miliband announced that we will address the payment of benefits to those not resident in this country, and will look again at the rules on deporting EU citizens who receive a prison sentence for committing a crime after arriving in the UK.

Labour has made clear that we do not think it is right that EU migrants should have access to all UK benefits from day one of entering the country, which is why we have called on the government to double the time that people coming to the UK from other EU countries seeking work have to wait before being able to claim Jobseeker's Allowance. None of us want to see a race to the bottom on wages and skills between EU workers and local workers. That is why we will take action to ensure the minimum wage is properly enforced, close loopholes in rules for agency workers, and look at EU Directives designed to prevent undercutting.

Finally, we recognise that any agenda for change in Europe must also address people’s concerns about how power is exercised at a European level. Labour does not support a drive towards an "ever closer union". EU cooperation is important but so too is the role of the UK Parliament. To uphold this principle, national parliaments must have a greater role in EU decision making, and we should be prepared to work to bring powers back to Britain where EU cooperation hinders rather than advances our interests.

No one is today calling for more powers to be transferred from Britain to Brussels. But given the uncertainty about precisely what a changing Europe and further integration in the eurozone might involve, Ed Miliband has acknowledged that a further transfer of powers remains unlikely, but possible. That is why he announced that a Labour government will legislate for a new lock: there would be no transfer of powers from the UK to the EU without a referendum. This would not just be a referendum to ratify a decision on powers, because as we saw in other countries, referendums of this kind are too easy for governments to ignore. Instead, it would have to be an in/out referendum, with a clear choice for the public to make on our membership of the EU.

After Ed Miliband’s speech this week, it is clear that the dividing line on the EU is not status quo vs change. The choice in 2015 is between a Conservative Party fast unravelling over Europe, and a Labour Party committed to working to make the EU work better for Britain. Ed Miliband leads a Labour Party united on what is best for Britain – and committed to delivering real change in Europe.

Douglas Alexander is the shadow foreign secretary and Labour MP for Paisley and Renfrewshire South.

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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.