The Tory EU rebellion is about neo-liberalism, not British sovereignty

The Conservative Eurosceptic tradition in Britain presents itself as patriotic. Yet the rhetoric on sovereignty hides the real goal: unfettered markets and unregulated banks.
Dionyssis G. Dimitrakopoulos
26 October 2011
The Greeks say ‘you sleep the way you make your bed’. This applies to David Cameron in particular. He is paying the price for years of appeasement of his party’s right wing. Back in 2009 he promised to introduce a UK Sovereignty Bill “to make it clear that ultimate authority stays in this country, in our Parliament”, ignoring the simple fact that this country is a member of the European Union by virtue of an act of parliament, namely the European Communities Act of 1972. Moreover, his constant references to the possibility of a ‘transfer of power to the EU’ is disingenuous since, rather than being lost to ‘unaccountable Brussels’, these powers are – in fact – exercised largely by representatives of national governments.

Yet, the issue (or, rather, the fiction) of sovereignty is nothing more than a fig leaf; a rhetorical device that is deployed so as to hide the essentially neo-liberal message of Tory Euroscepticism. Now that they are in government – albeit only as part of a coalition – they see the crisis in the eurozone as an opportunity to put a wedge between this country and the EU. In their eyes, the EU is now the sole origin of political and legislative action protecting Europe’s citizens from the excesses of unfettered markets - and it is therefore the enemy. Two key examples substantiate this claim.

First, many on the Tory right who are Eurosceptics (such as John Redwood) are also amongst the most vocal critics of any attempt at the level of the EU to regulate the banks and other financial institutions, opting instead to act as cheerleaders of financial deregulation just months before the credit bubble burst. Some among them – like George Osborne – often claim that although they want to see regulation introduced in that sector, this would work only at the ‘global level’ thereby effectively giving veto power to other major financial centres such as Hong Kong, Singapore, etc. So much for ‘sovereignty’. It is not a coincidence that on the day of the contentious vote in the House of Commons the prime minister’s official spokesman was eager to let it be known that protecting the City of London would be a key priority for a renegotiation of the EU treaty.

Crucially, this comes less than a year after a survey conducted by YouGov for the Fabian Society on EU membership. It showed that, while 45 per cent of the respondents believed that Britain’s membership of the EU is a ‘bad thing’, clear absolute majorities wanted EU countries to:

- co-operate more closely on regulating banks and financial institutions (53 per cent)

- tackle climate change (55 per cent)

- agree minimum levels of workers’ rights so that EU countries cannot under-cut each other with cheaper labour or lower regulation (55 per cent).

In addition, 47 per cent believe that the EU should agree minimum levels of taxation on large businesses so companies cannot relocate to whichever countries offer the lowest tax rates.

The second major example that illustrates the neo-liberal substance of the ‘Eurosceptic’ rebellion is the vehement opposition to even mild measures that seek to turn the European integration into an endeavour that benefits people as much as it concerns businesses (as Stuart Weir has discussed). Yesterday Michael Gove said he would like to see regulations governing "whom we can hire, how we can hire and how long they work" taken away from Brussels. While Cameron and Gove were said not to be speaking on behalf of the Government, their statements should be seen as part of a long history.

Number one on the Conservatives' black list is the EU’s Working Time Directive. Back in 2007 the Conservative party’s policy review group on competitiveness (led by John Redwood) recommended the abolition of the Working Time Regulations. The EU-related section of the agreement between the ruling coalition’s parties states that they ‘will (…) work to limit the application of the Working Time Directive in the United Kingdom’. Surprising though it might seem to many, its prominence is not undeserved. This directive reflects the conflict between a neo-liberal vision of the UK and the EU as a whole couched in unfettered markets, and a centre-left alternative that acknowledges that rules and institutions are necessary if market power is to be harnessed for the benefit of the many.

Enacted in 1993, the directive creates statutory rights that many of us now take for granted. It establishes compulsory minimum standards regarding the amount of time an employee can be required to work (48 hours per week on average, including overtime). It also creates provisions intended to protect vulnerable workers, such as those who regularly work at night, rights to daily and weekly rest periods, in-work breaks, as well as four weeks’ paid annual leave. It is such a mild attempt to help humanize capitalism that even the New Labour government found it acceptable, due to the flexibility of some of its key provisions.

The Tories’ opposition to the directive is so deeply-rooted (it has survived five party leaders) because it owes a lot more to their ideological commitment to unfettered markets than it does to the directive’s European origin. For them, employment issues are best left to the market, to particular firms and individual employees. This not only leaves workers' vulnerable, but is tantamount to arguing that there is no reason for public authorities to intervene, for example, to protect motorway users from over-worked lorry drivers, or patients from over-worked doctors in training.

Faced with the same kind of issues back in the early 1990s, John Smith, then Labour leader, saw the EU’s drive to improve workers’ rights as ‘essential in transforming a market for business into a Community for people’ and the British (i.e. Tory) opt-out as ‘an absurdity’ tantamount to denying British citizens ‘the social rights, the social opportunities and the social advantages which the whole Community wants for its citizens’. Castigating the Major government in July 1993 for persisting in ‘the policies of social devaluation which lie behind the opt-out from the social chapter’ and ‘fail[ing] to understand that low wages, inadequate skills and persistent under-investment are the real drag anchors on Britain’s economic performance’, Smith argued instead that Britain has ‘no future as the sweatshop of Europe’, trying ‘to compete against Taiwan on wages rather than against Germany on skills’.  

Mr Cameron and many in his party appear to believe that legislation that improves workers’ rights (including paid annual holidays and improved maternity rights), and efforts to curb the devastating power of financial markets is not in Britain’s interests. This is the real meaning of the Tory EU rebellion. As to how realistic it would be to ‘repatriate’ powers over employment and social issues to Britain, would the governments of the other member states agree to this when they know that these powers would be used to under-cut competitors?

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