Ed Miliband speaks at the CBI conference in London in 2012 - his decision not to guarantee an in/out referendum could help to drive a wedge between the Tories and business. Photograph: Getty Images.
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Why Miliband is right not to promise an EU referendum

Guaranteeing an in/out vote would have shifted the debate back onto Tory territory and could have wrecked a future Miliband premiership.

Ed Miliband has stood firm against the europhobes. As I revealed he would last month, the Labour leader has confirmed that he will not match David Cameron's guarantee of an in/out EU referendum in the next parliament. In an article in today's FT (to be followed by a speech at the London Business School at 10:45am), he announces that a public vote on the UK's membership will be held under Labour if new powers are transferred from Britain to Brussels (a tougher version of the coalition's referendum lock, which only mandates a vote on specific treaty changes). But crucially, he also makes it clear that he does not believe this condition will be met: "It is unlikely there will be any such proposal in the next parliament." In other words, don't expect a referendum under Labour. Miliband, who, as one shadow cabinet member told me, has always been "instinctively opposed" to a vote, has merely provided himself with some protective cover.

There are plenty who argue that his decision not to match Cameron's pledge is a profound misjudgement. They warn that it will allow the Tories to frame Labour as unwilling to "trust the people" and make it easier for them to lure back UKIP defectors (as the only main party committed to a referendum). But the truth is that Miliband's decision not to guarantee a vote is one of the wisest of his leadership. 

Far from being a clever ruse to wrongfoot the Tories, a referendum pledge would have shifted the debate back onto Conservative territory and enabled Cameron to claim that a "weak" Miliband was dancing to his tune. Aware of this, the Labour leader will maintain his laser-like focus on living standards, the issue which has defined the agenda since his conference speech and on which his party continues to enjoy a substantial lead over the Tories. As he has said before, "I think what we see is the Conservative Party talking to itself about Europe when actually what they should be doing is talking to the country about the most important issue that people are facing, which is the cost of living crisis. That’s what Labour’s talking about; that’s the right priority for the country." 

Amongst other things, the party's focus on growth, rather than a fantastical renegotiation plan, will help to drive a wedge between the Tories and business (it is no coincidence that Miliband's article was placed in the FT and that his speech is at the London Business School). As one Labour source told me, while many large firms disapprove of Labour's stance on energy and banking, they are far more troubled by the threat of EU withdrawal under a Conservative-led government. Martin Sorrell recently revealed that he and others had told Cameron that "if he were to drop the referendum he would be a shoo-in". That's almost certainly not the case (as Sorrell appeared to forget, most voters support a referendum) but it shows how desperate businesses are for Britain to remain in the EU. 

Cameron's charge that Labour is denying the people their say is one that some MPs fear will haunt the party during the general election campaign. Yet there is no evidence that the Tories' pledge will succeed in winning back significant numbers of voters from UKIP, most of whom have far wider grievances, or that it will define the 2015 contest in the way that some Conservatives hope. As polling by Ipsos MORI has consistently shown, the EU does not even make it into the top ten of voters' concerns (it is currently ranked 18th). Labour strategists would like nothing more than for the Tories to make one of their main dividing lines an issue that most voters do not care about. The more time the Conservatives spend "banging on" about Europe, the less time they spend talking about the issues - the economy, jobs, housing, public services - that might actually help them win the next election.

The public may favour an EU referendum but then they invariably support a vote on any issue if given the choice. The salient point remains that just 2 per cent regard it as "the most important issue" facing Britain (compared to 90 per cent of Conservative backbenchers)  and just 6 per cent regard it as "one of the most important issues". Lord Ashcroft's recent study of Tory-leaning voters found that even for them an EU referendum is "a sideshow". He wrote: "A surprising number of those we spoke to did not realise it was even on the agenda, and were nonplussed when they found out it was. Those for whom it is important know all about it (though they sometimes doubt it will come to pass even if the Tories win). But to make it a major theme of the campaign would be to miss the chance to talk about things that matter more to more people." If there is an electoral cost to Labour from refusing to match Cameron's promise, it will likely be too small to make a difference. 

Miliband has rightly judged that the dangers of a cast-iron guarantee far outweigh any potential benefits. This is not least because he recognises that he has a good chance of being in power after the next election and does not want the opening years of his premiership to be dominated by a referendum that a Labour government would find harder to win than a Tory one. A public vote to leave the EU in 2017, against Miliband's wishes, would shatter his authority. 

Those who claim that his referendum stance will harm Labour's election chances are the same who claimed that Cameron's pledge last year would unite the Tories, reverse UKIP's advance and even overturn the opposition's poll lead. It achieved none of these - and Miliband is right to reject their representations. 

George Eaton is political editor of the New Statesman.

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How a small tax rise exposed the SNP's anti-austerity talk for just that

The SNP refuse to use their extra powers to lessen austerity, says Kezia Dugdale.

"We will demand an alternative to slash and burn austerity."

With those few words, Nicola Sturgeon sought to reassure the people of England, Wales and Northern Ireland last year that the SNP were a party opposed to public spending cuts. We all remember the general election TV debates, where the First Minister built her celebrity as the leader of the anti-austerity cause.

Last week, though, she was found out. When faced with the choice between using the powers of the Scottish Parliament to invest in the future or imposing cuts to our schools, Nicola Sturgeon chose cuts. Incredible as it sounds the SNP stood shoulder to shoulder with the Tories to vote for hundreds of millions of pounds worth of cuts to schools and other vital public services, rather than asking people to pay a little bit more to invest. That's not the choice of an anti-austerity pin-up. It's a sell-out.

People living outside of Scotland may not be fully aware of the significant shift that has taken place in politics north of the border in the last week. The days of grievance and blaming someone else for decisions made in Scotland appear to be coming to an end.

The SNP's budget is currently making its way through the Scottish Parliament. It will impose hundreds of millions of pounds of cuts to local public services - including our schools. We don't know what cuts the SNP are planning for future years because they are only presenting a one year budget to get them through the election, but we know from the experts that the biggest cuts are likely to come in 2017/18 and 2018/19. For unprotected budgets like education that could mean cuts of 16 per cent.

It doesn't have to be this way, though. The Scottish Parliament has the power to stop these cuts, if only we have the political will to act. Last week I did just that.

I set out a plan, using the new powers we have today, to set a Scottish rate of income tax 1p higher than that set by George Osborne. This would raise an extra half a billion pounds, giving us the chance to stop the cuts to education and other services. Labour would protect education funding in real terms over the next five years in Scotland. Faced with the choice of asking people to pay a little bit more to invest or carrying on with the SNP's cuts, the choice was pretty simple for me - I won't support cuts to our nation’s future prosperity.

Being told by commentators across the political spectrum that my plan is bold should normally set alarm bells ringing. Bold is usually code for saying something unpopular. In reality, it's pretty simple - how can I say I am against cuts but refuse to use the powers we have to stop them?

Experts - including Professors David Bell and David Eiser of the University of Stirling; the Resolution Foundation; and IPPR Scotland - have said our plan is fair because the wealthiest few would pay the most. Trade unions have backed our proposal, because they recognise the damage hundreds of millions of pounds of cuts will do to our schools and the jobs it will cost.

Council leaders have said our plan to pay £100 cashback to low income taxpayers - including pensioners - to ensure they benefit from this plan is workable.

The silliest of all the SNP's objections is that they won't back our plan because the poorest shouldn't have to pay the price of Tory austerity. The idea that imposing hundreds of millions of pounds of spending cuts on our schools and public services won't make the poorest pay is risible. It's not just the poorest who will lose out from cuts to education. Every single family and business in Scotland would benefit from having a world class education system that gives our young the skills they need to make their way in the world.

The next time we hear Nicola Sturgeon talk up her anti-austerity credentials, people should remember how she did nothing when she had the chance to end austerity. Until now it may have been acceptable to say you are opposed to spending cuts but doing nothing to stop them. Those days are rapidly coming to a close. It makes for the most important, and most interesting, election we’ve had in Scotland.

Kezia Dugdale is leader of Scottish Labour.