Blair offers EU a change in style

Date: 13/02/1997

A YEAR from now, the British prime minister could well be piecing together an alliance of member states to try to switch attention away from common justice policies and towards fighting fraud and cutting farm subsidies.

At the same time, he and his foreign minister - with the support of several dozen Eurosceptic members of the British parliament - may override the wishes of his finance minister and prevent UK participation in the first wave of countries entering a monetary union.

Sounds familiar?

The difference is that the personalities involved are unlikely to be John Major, Malcolm Rifkind and the isolated Europhile Kenneth Clarke - if the Conservatives' opinion poll deficit is reflected in the results of the general election pencilled in for 1 May.

Instead, the key players would be Tony Blair, the 43-year-old leader of the Labour Party, and his 'shadow' foreign and finance ministers Robin Cook and Gordon Brown.

Outsiders could be forgiven for thinking that precious little would change in Europe if the Labour Party won its first general election for 18 years.

In foreign, as much as domestic policy, the party has learned a hard lesson from four successive electoral defeats: keep your head down on contentious issues and hope the Conservative government is unpopular enough to lose all on its own.

But if a Labour government is elected in the coming months, there is little doubt that its impact on the Union will be profound.

To begin with, the Eurosceptic rhetoric would go. Unlike the Conservatives, the opposition party is not continuously tearing itself apart over EU issues. And while Labour has Union critics within its ranks, such views are by no means the badge of honour among younger members that they have become among Tory counterparts.

“The change in style will probably be the biggest single difference. There will be a more constructive tone and a lot less of the looking-over-the-shoulder at warring sections of the party that we see with the present government,” explains Joyce Quin, Labour's European spokeswoman.

That change, reflecting the remarkable degree of harmony on EU policies at Labour's annual conferences in recent years, confirms the revolution which has taken place in the party's thinking since it fought the 1983 election on a pledge to quit the European Community, dubbed the 'bosses' club' by rank-and-file stalwarts.

“For many Labour Party members, the EU has been seen as a beacon of light during the dark years of Tory government,” says Stephen George, professor of politics at Sheffield University and author of a history of the turbulent relationship between the UK and the Union.

“The attitude of the Labour leadership to Europe is quite measured but, at the very least, the tone will change and that is not an insignificant factor.”

Under Blair's chairmanship, a committee of key shadow cabinet members and senior MEPs, notably Wayne David and Pauline Green (respectively the leaders of the Labour and Socialist Groups in the European Parliament), has been fine-tuning the party's EU policy.

Many see this as proof of an effective partnership between the party's domestic and European wings. But not all Labour members are so convinced.

“There is undoubtedly quite a lot of contact. However, I feel Tony Blair is domestically driven and that the MEPs are plenipotentiaries to, rather than members of, the court,” said one cynic.

The domestic emphasis is understandable, but the Labour leader would be unlikely ever to follow Major's example and implement an across-the-board policy of non-cooperation with his EU partners, as the current British prime minister did at the height of the mad cow crisis last year.

As the election approaches, Labour politicians are stressing this point as a way of compensating for their silence on real policy differences.

“We will be prepared to use our veto on strategic issues if it is in the national interest, but we will not pursue isolation as a policy,” said Robin Cook recently.

In fact, Blair has been busy networking with Social Democratic prime ministers ever since he took over as party leader three years ago. He has built up strong ties with the Netherlands' Wim Kok, Portugal's António Guterres and Denmark's Poul Nyrup Rasmussen.

Labour's links have been reinforced by its participation in the Party of European Socialists, and in the pan-European network which former General Secretary Larry Whitty has nurtured in his new role as European coordinator.

Labour is now seen as part of a wider European political family - something British Conservatives have never managed to achieve.

But despite talk of constructing a Social Democratic alliance of like-minded states, governments will always vote in the Council of Ministers on the basis of national self-interest and not political solidarity.

Which other Socialist administration would campaign for a radical liberalisation of the electricity, gas, telecommunications and aviation markets in continental Europe? Only a Blair government would do this because British Gas, British Telecom, British Airways and Virgin Express all have vital strategic interests in tearing down state monopolies on the continent.

On the other hand, a Blair government would definitely sound Social Democratic on employment and social policy issues.

Labour also envisages more powers for the European Parliament, wider use of majority voting, greater openness and transparency, and a stronger role for regional and local authorities - a stance in line with most other member states.

Similarly, Labour would sing a very different single currency song compared to the raucous sounds now being heard.

Just like the Conservatives, the party is deeply split on the issue - whatever its leaders may say - but the divisions are political rather than nationalistic.

Many of Labour's parliamentary members are highly sceptical about swapping sterling for the euro because they fear the mandate of the European Central Bank will be too deflationary and the fiscal 'stability pact' so restrictive that they will generate mass unemployment. Very few MPs oppose the euro simply because it is foreign.

In Cook, the sceptics have their own champion in the shadow cabinet. The 50-year-old Scottish foreign affairs spokesman with fearsome debating skills has been at loggerheads over the single currency issue with Brown - the man who would conduct the euro-bloc entry negotiations - for three years.

When Blair handed out shadow ministerial jobs in 1994, Cook wanted Brown's job but was considered too Keynesian in outlook. Ever since, he has ensured that his credo - that budgetary policy can still be used to stimulate demand and create jobs - is heard to counterbalance Brown's post-Eighties fiscal orthodoxy.

Cook wanted Labour to rule out the possibility of signing up to the euro in 1999, so as to clarify its position before the election. Brown was adamantly opposed to this.

In the end, Blair managed to find a compromise between his two shadow cabinet heavyweights: Labour would leave its options open but, if the government did decide to join EMU, this would be put to the people in a referendum.

Both factions also agreed that, for purely practical reasons, a Labour government would find it virtually impossible to join the single currency in January 1999, since the legislation was bound to get bogged down in parliament and would then have to be followed by a well-prepared referendum.

It was an elegant compromise and one which prevented the kind of EMU blood-letting going on in the government from spilling over into the opposition.

However, a fortnight ago, Cook reopened the debate - but in a way that nobody would have predicted. Seemingly stung by a statement from Japanese carmaker Toyota that it would think twice about investing in the UK if it were not part of the euro-zone, Cook made what is being seen as a subtle shift in position.

While announcing that Labour was considering postponing EMU entry until euro notes and coins hit the streets in 2002, Cook also warned that “a country that stays out of the European single currency could face penalties” and lose vital inward investment.

By agreeing to remain on the outskirts of the euro-zone for three years and see how it develops, the divided Labour leadership appears to have found a modus vivendi.

Holding this together for the five-year lifetime of a government will be a real test of Blair's super-glue powers.