In a speech today at the London Business School, Ed Miliband set out Labour’s policy on an EU referendum: unless there are further transfers of powers, there won’t be one. Here’s what he said:
It is great to be here at the London Business School. For fifty years, in the teaching you provide you have made a major contribution to helping businesses succeed across the world.
And today I want to talk about an issue that I know is close to your heart: Britain’s place in the European Union. I want to set out why I believe our country’s future lies in the EU. Why the EU needs to change. What that means for the next Labour government’s position on Britain’s membership of the European Union. And our policy for our general election manifesto for the next Parliament.
I want to start with events in Ukraine. In recent weeks, we have been reminded of what the European ideal means. One of the most striking sights of this year has been those pictures we have watched of young Ukrainians waving the EU flag. For them Europe is an ideal: a symbol of a better future, of peace and prosperity.
And that was the original case for the European Union: Securing peace among the countries of Western Europe as they emerged from the horrors of the Second World War. Then taking in countries that had been locked behind the Iron Curtain.
What events in the Ukraine reveal is that this ideal remains strong. At its best, the European Union is a set of countries committed to working together for democracy, human rights and the rule of law. What has been happening in the Ukraine is a reminder of how some countries outside the EU look upon the European Union.
Of course, Ukraine is also a test for the European Union. And we see some of the challenges of uniting 28 countries around a common approach. But it is in our national interest to work in this way. Britain continues to punch above its weight in the world. But with power moving to China and India, Britain exercises more influence because it is also part of a group of countries of 500 million people.
Our country can tackle the major problems of the world far more effectively inside the European Union than it can on the outside. And that is true not just when it comes to Ukraine.
From climate change to crime and terrorism to promoting democracy around the world, Britain is stronger as part of the EU. Because the only way to respond to problems that cross borders is with countries working together. Not standing apart. So the case for Britain’s place in the EU is about our strategic influence in the world.
But it is not just strategic. It is also economic. The economic case for membership is overwhelming. Our membership of the EU gives Britain access to a market with hundreds of millions of people. With 21 million companies. Generating 11 trillion pounds in economic activity. Almost half of all overseas investment in the UK comes from within the EU. Directly providing 3.5 million jobs. And much of the rest of the investment into our country comes because we are part of the single market.
In addition, our membership makes Britain’s businesses better too. Competing in that single market with the best companies in the world drives competitiveness and innovation for firms in all parts of our economy: from cars to computers, phones to pharmaceuticals.
Exit from the EU would put all these gains at risk. Either we would end up outside the single market or even if we could stay within it, it would be under terms and rules dictated by others. That would be bad for Britain.
So the benefits of being in the EU are strategic and economic. And they are also about the character of our country. I believe in an outward looking Britain. A confident Britain. A Britain that wants to learn from how things are done elsewhere. Because we know that we can hold our own with the best in the world. Not a Britain that shrinks away. Turns inward. Or a Britain that feels threatened by working with other countries.
Sometimes it is worth seeing yourself as others see you. People that I meet internationally, don’t want Britain to leave the European Union. They feel deeply that it would make Europe, indeed the world, a poorer, less successful, less secure place. They want us to play our part. Because they know that is the lesson of history.
It was an outward-looking Britain that gave refuge to my parents and helped defeat the Nazis. It was an outward-looking Britain that didn’t shrink away from its international obligations during the Cold War. And it is an outward-looking Britain, with our global cities, that remains the envy of the world, as the 2012 Olympic Games showed.
So we need to be in the EU, not out of it. Outward-looking, not inward-looking. But my case for Britain in the EU is not a case for the status quo. It is a case for change.
Some people say to me that the reason there is scepticism about the European Union is because we have not shouted loudly enough about its benefits. I do not agree. The reasons for scepticism are real. And to understand why change is important, we need to understand the sources of that discontent.
There are three separate issues that we need to confront.
First of all, there are a set of economic issues that have driven what people feel. We cannot separate the growth in doubts about the European Union from Britain’s wider economic situation and the problems in the Eurozone. There are still over 20 million people without jobs across Europe today. And 5 million young people looking for work. British businesses, especially small businesses, often feel that EU regulation doesn’t help our competitiveness, but gets in the way. There is an obvious connection between the prosperity we have here at home and our sense of whether the European Union is working for us.
Second, large scale migration from countries new to the EU has undoubtedly been a major factor in people’s doubts. People greatly value the ability to move around Europe. With more than two million of our own citizens estimated to live in other EU countries. And immigration brings benefits to our country, making it richer, economically, socially, culturally. But there is a genuine concern about the impact that the pace of change has had here. Especially about a race to the bottom in wages and conditions.
This is not prejudice. And these concerns are and must be Labour’s concerns. Indeed, the foundation of Labour’s whole economic argument is that we must avoid a race to the bottom for low wages and low skills. And that must be true also when it comes to the European Union.
Progressive politics is and must also be capable of responding to the concerns people have around the benefits system. Solidarity between those receiving benefits and taxpayers must be built, through a system in which people can have faith. That is true in general and it is true when it comes to migration from abroad.
That is why we have to address particular examples around benefits, which may be small in cost, but exacerbate a sense of unfairness at a time when people feel hard-pressed.
The third source of scepticism is about the way the European Union works. This is part of a wider concern that people increasingly have about major institutions and the way they exercise power. In May, we will be conducting the European elections. And I pay tribute to Labour MEPs and the work they do, seeking to reach out to the people they represent.
But there is a fundamental challenge of accountability in the European Union: We live in a world where so many issues require cooperation across national boundaries, but where people’s fundamental political identity remains the nation state. I believe people do recognise the need for cross-border action when it comes to the single market or countering crime, terrorism and climate change.
But people want to know that power is only being exercised at the EU level when it is absolutely necessary. Because they see accountability to them as operating through our Parliament. In this context, people ask: if there are 18 countries in the Eurozone which might wish to integrate further, could this lead to further powers being transferred away from our country? So the three sources of scepticism that I see are about economic challenges, the impact of EU immigration and about the exercise of power. And they all need to be addressed.
Fourteen months ago, David Cameron gave a speech about these issues and set out his attempt to address them. He set a date of 2017 for a referendum on whether we should leave the European Union. We should be clear about what has happened since then.
Companies all around the world have come to the view that this is placing great uncertainty over their decisions to invest in Britain. The CBI has said the government’s plan is a “diversion” and “distraction” from “the economy, jobs and the cost of living”. While global companies from Nissan to DHL have openly warned of the dangers of exit. And the inherent uncertainty caused by a referendum on this arbitrary timetable has been made far worse since. Because David Cameron has: No clarity about what he is negotiating for. No support for his treaty change from the rest of the European Union. No strategy for achieving it. And no definitive answer even as to whether he would recommend staying in or leaving the European Union.
His promises on Europe are undefined, undeliverable and are now unravelling. None of this is an accident. On the substance of what he is negotiating for, the only way David Cameron can get through the time between now and the general election, is on the basis of obscurity.
Because he is caught between the demands of his backbenchers, many of whom want to leave the European Union, and the reality about what he knows could be negotiable with our European partners. He cannot tell us what he is negotiating for because if he does it will be clear that either he will fail to satisfy his party or set demands in Europe that he will inevitably fail to achieve. And what have we learnt about the mood among our European partners with whom he would have to negotiate any change on the basis of unanimity?
The answer was clear from the visit of Chancellor Merkel two weeks ago.
She offered no support for the government’s timetable or its plan for treaty change. He needs unanimous support. But he has none. This is important because the deep antipathy there is towards his proposals and his timetable will inevitably limit what he can achieve. Even the Prime Minister knows this is a negotiation. And no amount of bluster can hide that fact.
And because he cannot spell out his negotiating demands, and because the prospects of treaty change on his timetable are so slim, he still cannot tell us the answer to the most basic question of all: Whether he would definitively recommend a yes or a no vote in a referendum. That is why what he has done has sent such a chill down the spine of businesses round the world.
David Cameron was elected as leader of the Tory party on the basis that they should stop “banging on about Europe”. He may well have been genuine. But now he offers only that. And worse. A Conservative government after 2015 dominated not by how we tackle the cos-of-living crisis, protect the National Health Service, get jobs for our young people. But by an all-consuming and damaging obsession with whether we should leave the European Union.
You don’t need to look into the crystal ball to see what it would mean. We’ve seen it all before between 1992 and 1997 when John Major was Prime Minister. A weak Prime Minister buffeted by events. And we know where the centre of gravity in the Conservative Party now lies. Britain outside the European Union. Robbed of influence and power. That is why their position on Europe makes the Conservative Party so dangerous to the prosperity of our country. And why a Prime Minister who should know better is acting from a position of weakness not strength, party interest not national interest.
Our priority would be different. Instead of this approach, we need one driven by the national interest. Which keeps the country’s focus on the biggest issue facing us: the future of our economy and the cost-of-living crisis. Which understands that Britain’s future lies in the EU. But reforms the EU to make it work for Britain.
My vision is of a European Union with a proper focus on building a high skill, high wage economy. Working together on issues like climate change, crime and terrorism. And flexible in the different ways that countries collaborate together, protecting the interests of those outside and inside the Eurozone. So let me tell you how a Labour government would make the European Union work better for Britain.
First, economic reform.
This is where our focus needs to be in the years ahead. Making the European Union better support our prosperity. Changing an EU budget where 40% is still spent on the Common Agricultural Policy. We need more of the money to be spent on public goods that help our economy grow, like infrastructure, energy and innovation. And tackling crucial issues like youth unemployment. Britain accounts for one in six unemployed young people across the EU. This should be a major part of our agenda within the European Union but it is not under this government.
And the European Union needs to be far more focused on how we strengthen growth across Europe. We need to drive forward the completion of the single market in digital, energy and services. I am pleased to say the CBI has agreed to help develop proposals about how to complete the single market. And make it easier for British firms to take advantage of the opportunities the single market provides.
We should also use Europe’s strength to negotiate trade agreements with other parts of the world. As well as moving as fast as possible towards securing the Trade and Investment Partnership between the EU and the US. We can’t do these things being led by a party that is halfway to the exit door. And there are areas where power over economic issues needs to come back to national parliaments. Like over the flexibility of rules on state aid to help companies.
And as we drive the single market forward, we also need to clarify that our vision for Britain means that some key public services must have special protection.
Like the NHS. This government has deliberately tried to expose the NHS to the full force of EU competition law. The next Labour government and our MEPs will work to make sure the NHS is protected from that law, so that patients are always put first.
Second, we need to show we can act on people’s concerns about immigration. There need to be fair rules on what happens when people come here and rules which prevent a race to the bottom in wages and conditions. Our agenda for reform is different from the Conservative Party. After 1997, it seemed that all major parties in Britain had decided to accept the social chapter which gives people guarantees over certain rights.
Now some Tories want to weaken rights to paid holiday, maternity leave and other social rights. These protections are not only good for employees. They are also good for British business because they prevent firms elsewhere in Europe seeking a competitive advantage by undercutting working conditions.
Rather than weakening these protections, we should be defending them. And we should be doing more to stop the race to the bottom, including as a result of immigration. There are many more things we could already do in Britain today.
We should ensure that the law on the minimum wage is properly enforced. We should stop companies using tied housing as a way to sidestep the minimum wage. We should take action here at home on loopholes in rules for agency workers which allow wages to be unfairly undercut. And we should be looking at EU directives, like the posted workers directive, to make sure they are effective. We must also look at the issues raised by new countries coming into the European Union. To be clear, there is no likely prospect of new entrants in the short term. But this gives us a chance to take stock of existing transitional arrangements to avoid the race to the bottom.
Transitional controls allow countries currently in the EU to restrict free movement of workers from new accession states for a so-called “adjustment period” of seven years. This is designed to allow countries to converge to similar levels of prosperity.
As Douglas Alexander said a year ago, we should look again at these arrangements. I believe we should look at giving countries far greater flexibility, including significantly lengthening the maximum permitted period of transition.
And we should look at other options too. We must also take action to protect the integrity of the benefits system. British people recognise that Britain gains when people come here and contribute. But they don’t believe that people newly arrived should have exactly the same rights as people who have contributed throughout their lives. The benefits system in fact already recognises this.
But we need to act on areas of particular concern. So we should look at changing the period for which people have to be present in the UK before they can claim JSA from three months to six months. We believe this could be done under existing arrangements.
And as Yvette Cooper has said, family benefits such as Child Tax Credit and Child Benefit should not be sent abroad to children not living here in the UK. This simply undermines support for the system. There is also an issue of people who commit crimes here having recently arrived from other European countries.
If people abuse their right to be in another member country, we need to seek greater flexibility for member states to deport them. So we need to learn the lessons of the past on enlargement and immigration. And ensure fair rules in which people can have trust. Third, we also have to tackle the concerns people have about power in the European Union and where it is exercised. We need to strengthen the power of national parliaments, including with a “red card” system.
If enough national parliaments express concern with a piece of EU legislation then the EU should abandon it or respond to a demand for change. In the longer term, we need to continue to seek to deal with what people see as the excesses of the European Union, like a separate parliament building in Strasbourg.
And we need to respond also to the anxieties people have about the changing shape of the EU. I am clear that under Labour, Britain will not be part of an inexorable drive to an ever closer union.
But I understand the worry about such a drive. And the worry that there might be a further transfer of powers away from Britain and to the EU. Now, there are no current proposals from other countries for such a transfer of powers.
And I do not believe this is the direction in which Europe should head. Indeed, I think some powers should come back the other way. But we cannot be certain about the emerging shape of Europe. So today I am announcing that the next Labour government will legislate for a new lock. Not simply a referendum on any treaty change proposing a transfer of power. Because there have been too many referenda like that in other countries which have been ignored. But a lock that guarantees that there will be no transfer of powers without an in/out referendum.
Without a clear choice about whether Britain stays in the EU. Now, from what I have said about proposals coming from the EU for such a transfer of powers, I believe it is unlikely this lock will be used in the next Parliament. But the British people know, given the history of the EU, as well as uncertainty about precisely what an integrating Eurozone might involve, that it remains possible and they need a guarantee.
This is the set of conditions under which the next Labour government would have an in/out referendum. So this is where Labour stands. As we go into the general election, I am clear the priority for the next Labour government is the cost-of-living crisis.
Not a costly and damaging debate about exiting the EU. We will do the right thing for our national interest. And I want the message to go out to businesses around the world, that under a Labour government, Britain is open for business and is clear we want to remain an engaged and committed member of the EU.
With a clear lock that guarantees that there will be no transfer of powers from Britain to the European Union without an in/out referendum. The alternative is David Cameron’s approach.
A year on from his speech, an agenda he can’t even set out because he is caught between his backbenchers who really want to leave and his knowledge that it is in our interests to stay in. And the prospect after the next election of an ungovernable Conservative Party with a Prime Minister pulled this way and that and the British people paying the price.
Because of the damage to our national economic interest. With Labour we know Britain’s future remains in the EU. And we will reform it. Protecting millions of jobs. Our priority should always be the national interest. Only a Labour government can now protect it.
And that’s what the next Labour government will do.