The Socialist Unity Network

Socialists and the European Union

Martin Wicks

A Serious Discussion Needed In the Labour Movement.


The discussion taking place in the media in relation to the European Union and the question of a single currency has centred around the deep divisions within the Tory Party. However, there are divisions within the Labour movement over the questions raised by the Maastricht Treaty and the prospect of a common currency for the member states. Considering the importance of the issues there has been a dearth of serious discussion in the Labour and trade union movement.

            Swindon TUC has decided to produce this Bulletin in an effort to promote discussion in the local labour movement. The opinions contained within are those of the author. We are prepared to circulate material with a differing viewpoint. The questions raised have a crucial bearing on what action a government elected by working people will be able to take, or will be restricted from taking. Also posed are questions about the ‘global market’, which has created massive unemployment both in Britain and internationally under the pressure of increasingly cut-throat international competition. The growing tensions within this market, recently took the United States and Japan to the brink of open trade war.

            It is necessary that we all are fully aware of the implications of the decisions which politicians will make over the next 5 years, supposedly in our name. Most importantly it is necessary to have a conscious discussion about the interests of working people (including the unemployed and the impoverished) and what policy would best serve those interests. What follows is intended merely to be the first contribution to the debate.





1. The European Union - The Historical Background.


During the Second World War US aid took the form of Lend-Lease. The Mutual Aid Agreement of 1942 signed by recipients of Lend-Lease, reflected US objections to trade barriers of any kind, including Britain’s system of imperial trade preferences. The signatories thus agreed to “the elimination of all forms of discriminating treatment in international commerce” and to the reduction in tariffs and trade barriers. This was an ultimatum from the US which would utilise the War to build its international economic domination. From a position of overwhelming strength, ‘free trade’ was to the advantage of its giant monopolies. This ‘free trade’ approach would be enshrined in the General Agreement on Trade and Tariffs, signed in Geneva in 1947 by 23 states.

            The US had benefitted enormously from the war. The level of production of its economy doubled. However, the change to a peace-time economy presented it with the threat of contraction. There was a debate in ruling US circles as to how to overcome this danger when faced with a war ravaged Europe which did not have the resources to provide a post-war outlet for the goods of a much expanded US economy. Some elements amongst these ruling circles, for instance, wanted to reduce Germany to an agricultural country rather than to rebuild its advanced industrial economy. However, this faction lost out and the Marshall Aid Plan was agreed (actually called the European Economic Recovery Plan) in 1947. In the following year the Foreign Assistance Act released the US funds agreed. However, Marshall Aid was not given country by country. As part of the deal it was agreed (US imposition, of course, since the recipient countries could hardly afford to turn down the conditions) that those receiving the aid would coordinate their economic activites and planning in order to gain the full benefits of the program. The 16 countries involved agreed to meet as a Committee of European Economic Cooperation. The US insisted that the CEEC be a permanent organisation which would administer the program. This was the origin of the Organisation for European Economic Cooperation, set up in 1948. Its immediate preoccupation was to allocate the funds.

            A Council of Ministers from the participating countries was formed, with British involvement. A series of special committes were set up, including a European Payments Union in 1953.

            Thus the initial impetus towards European union came from the efforts of the US to rebuild the European economies and to open up international trade to its businesses. Moreover, as one writer has put it: was apparent that to all intents and purposes the program was the economic complement of President Trueman’s expressed political intent to organise western Europe in an ideological alliance against the Soviet Union and Communism.

(Derek Urwin, The Community of Europe.)


            Of course there were those elements within Europe who had a political belief in a European union. In 1947 these forces were brought together in an International Committee of the Movements for European Union. In May of 1948 A Congress of Europe was held in The Hague and demands agreed for a European Assembly, a Charter of Human Rights and a European Court.

            In 1948 Britain signed the Treaty of Brussels, a 50 year pact “for collaboration in economic, social and cultural matters and collective self-defence”. It was agreed to form a Council of Europe “consisting of a ministerial committee meeting in private and a consultative body meeting in public”. The statute of the Council of Europe was signed at the Treaty of Westminster in 1949 by 10 states, and arrangements agreed for the establishment of offices in Strasbourg.

            A Council of Ministers was set up together with an unelected Assembly which could only make recommendations to the Council of Ministers. In May 1950 the Assembly, frustrated by the lack of response from the Council of Ministers, sent a list of proposals directly to the national parliaments. They were positively received in the six countries which would form the EEC in 1957. The British Parliament reiterated the view that the Council should merely be a meeting place for discussion.

            Effectively, 1950 marked the end of the efforts of the pro-Europeans to involve Britain in moves towards political and economic union. Robert Schuman, a French Minister, proposed a pooling of coal and steel reserves to be administered by both the national states and a supra-national authority acting together with the aim of eliminating all tariffs in these industries. The plan was seen as a first step towards European integration underpinned by a rapprochement between France and Germany. Schuman’s declaration stated:


The pooling of coal and steel production will immediately provide for the establishment of common bases for economic development as a first step in the federation of Europe, and will change the destinies of those regions which have long been devoted to the munitions of war, of which they have been the most common constant victims.


Hence the long term aim of federation was at the base of the document.

            Britain refused to join the ECSC. The Labour Party rejected it as something which would limit its ability to strive for democratic socialism in Britain “and to apply economic controls necessary to achieve it”. Prime Minister Clement Attlee reiterated that it would be impossible for Britain “to accept the principle that the most vital economic forces of this country should be handed over to an authority that is utterly undemocratic and is responsible to nobody”.

            The ECSC Treaty of Paris was signed by 6 states in April 1951, with the objective of a common economic market and the political aim of a supra-national authority. The institution to run it was an High Authority with the term of office of Commissioners of 6 years. Jean Monet the driving force behind European union was appointed President. This body could direct investment or actual prices and production, and punish those who ignored its decisions. It could influence the national coal and steel industries without being countermanded by national government. Funding for the HA was not from governments but from taxation levied on coal and steel production directly from the firms concerned.

            The EEC was set up in 1957 when the Treaty of Rome was signed. It was founded on the concept of a ‘free market’ and the progressive reduction of trade barriers so that a common economic market would be formed and in the long term a political union. There were a number of ‘social’ aspects to the Treaty, including a declaration in support of equal pay for equal work, and the establishment of a Social Fund to provide for retraining and resettlement. However, the main content of the treaty was to create the conditions for the eradication of national barriers to trade within the EEC. As one writer commented:


The Community had to be seen to be more than a device to enable capitalists to exploit the common market; otherwise it might not be possible to persuade the peoples of the community to continue to accept the disciplines of the market.

(M.Shanks, European Social Policy Today & Tomorrow. Pergamon Press, 1977.)


Millions of people would later suffer under those ‘disciplines’, with the re-emergence of mass unemployment on a European level.

            In the 1970s the EEC adopted a Social Action Program which produced directives on equal pay, equal treatment of work, collective dismissals, and transfer of employment. These directives stemmed from the Treaty of Rome which aimed for harmonisation of laws and regulations in member states which directly affected the functioning of the common market or were deemed necessary as community objectives. Hence the social policy had more to do with equalising conditions affecting competition, you could say rules governing the exploitation of labour, rather than any deep seated concerns with the rights and conditions of working people. They wanted to ensure there was no ‘unfair competition’. But in any case action under the Articles which these directives flowed from required unanimity. This would present obstacles, as we shall see later.


British Entry.


The Heath government took the decision to enter the EEC. This was ratified by thereferendum organised by the Wilson government in which there was a 2 to 1 majority in favour of entry. British alloofness has been based on the international nature of British trade (with its far flung colonial markets) not to mention the national arrogance of a ruling class which was slow to accept the decline of what was once the world’s leading imperial power. However, the post-war decline of Britain convinced its ruling circles that in order to survive economically it had to place itself inside the emerging European market.

            Just as there were divisions within the British ruling class and the employers’ ranks, so there were divisions within the labour movement, with pro and anti groupings both within the Labour Party and the unions. Not only did the Labour Party Prime Minister call for a ‘yes’ vote when his Party called for a ‘no’ vote but members of his cabinet campaigned in opposite camps.

            Within the labour movement there was much talk of the EEC as a “capitalist club” and the fact that it was founded on ‘free market’ ideas. Yet many on the left expressed their opposition in terms of defence of ‘British sovereignty’. That is why you had the spectacle of Labour and Tory MPs appearing on the same ‘no’ platforms, as if the main problem was ‘national’ rights rather than the social and political interests of working people. As a youngish delegate to Reading Trades Union Council I can remember some heated debates on this issue of sovereignty and unity with right wing Tories as if we had the same interests as them.

            At any rate the referendum sent Britain into the EEC.







The Trades Unions.


            So far as the trades unions were concerned their hostility to the EEC remained, as indeed it did amongst the majority of the membership of the Labour Party. As late as 1981 the TUC Congress passed a resolution for withdrawal.

            However, as the 1980s wore on and the EEC introduced a series of social policies, it began to look like Nirvana compared to the dire situation in Britain where the Thatcher government organised a systematic political and legal offensive against the trades unions. To trade union officials who had previously been welcomed into ‘the corridors of power’, for ‘beer and sandwiches’ in Downing Street (when Wilson was PM), and had been involved in tripartite bodies (trades unions, employers and government) such as the National Economic Development Committee, European talk of ‘social partnership’ and ‘dialogue’ seemed very attractive indeed.

            In 1985 the EEC Council of Ministers approved a white paper which included 300 measures intended to remove physical, technical and fiscal barriers to the free movement of capital and labour within the EEC, with the aim of creating a Single Market by the end of 1992. Early in 1988 the Council of Ministers established a Committee to discuss the timetable for moves to economic and monetary union.

            After the 1987 election defeat the Labour leadership overhauled its policy and became pro-European, dragging the TUC General Council in its wake. In 1988 Jaques Delors (the French Socialist Party EEC Commissioner) was invited to speak to the TUC Congress. His speech was well received by many, if not most trade union leaders. He spoke of the moves to monetary and economic union. He declared that social dialogue and collective bargaining were essential pillars of a democratic society.

            At that Congress Ron Todd, TGWU leader declared.


The only card game in town is in a town called Brussels and it is a game of poker where we have got to learn the rules and learn the fast.


            Two years later the 1990 TUC declared that:


It will be impossible in the long run to successfully conduct economic policy in isolation from the moves towards economic and monetary union within Europe.


            The Maastricht Treaty which prepared the practical implementation of the Single Market (enshrined in the Single European Act) was supported by the Labour Party and the TUC, although there were critical voices. NALGO and MSF opposed, whilst the TGWU was critical, but overall the majority of unions supported “further integration through a common currency and a central European bank” The majority view was that despite unpalatable aspects of the Treaty “the only alternative - a Britain outside the EU - was simply not a viable option”.


Why the ‘Single Market’?


            Before we look at the various aspects of EU policy and what the attitude of the unions ought to be, it is necessary to consider what is the motivation behind the formation of thet Market. Whilst it is true that the Treaty of Rome looked towards this end the practical difficulties of governmental differences and conflicting ‘national interests’ made the process much slower than had been hoped: the 1970 target proved to be hopelessly utopian.

            The main impetus for the formation of the Single Market in the 1980s was the economic conditions which existed on the international scale. The increasingly cut-throat competition in the ‘global market’ has led to the creation of economic blocs. The European Single Market is fundamentally a means of fighting off competition from North America and Japan. The Japanese, of course, have used Britain as a means of getting inside the EU and taking advantage of the free movement of capital and goods.

            The committee set up by the Council of Ministers in 1988 to report on moves towards economic and monetary union thus stated:


Costs will be down. Prices will follow, as business, under the pressure of new rivals previously protected, is forced to develop new responses to a novel and permanently changing situation...The Single European Market will propel Europe onto the blustery world stage in the 1990s in a position of comparative strength and on an upward trajectory of economic growth into the next century.


In other words the end of all protectionism would create an intensification of competition within the EU. The ‘spur of competition’ would make businesses more efficient and innovative in this Darwinian struggle for the survival of the fittest.

            It is therefore based on free market logic and the struggle for the success of ‘European’ capital. The cost of this competition has been heavy and borne by working people who have suffered the results of rationalisation, restructuring, and what is now politely called ‘down-sizing’. That is why unemployment has been so high in Europe. Unfortunately, the TUC and Blair’s New Labour fully accept this framework - ‘the realities of the global market’.


The Global Market.


What is this ‘global market’ which receives so much attention now in the media and is spoken of by ‘New Labour’ leaders? According to one financial journalist:


People may be in chains but in the 1990s capital has become free. It has burst out of the restrictions imposed by national governments and now goes virtually where it will, whatever the consequences on individual economies. Perhaps for the first time it is now possible to speak of a single world financial market.

(Philip Coggan, How The City Works, Penguin.)


Dennis Healey makes a good witness to judge this ‘new world’ insofar as he cannot be accused of being a left winger and was at the heart of political events in the post Second World War situation. In his memoirs he has written:


The financial disorder of the last ten years...started, I believe because the oil crisis led to a massive accumulation of bad debt by the private banks, which they tried to offset by increasing their lending to other clients. It then got completely out of control with the introduction of computer technology into the financial markets. This produced a triple revolution in which globalisation was accompanied by deregulation and innovation, making the international financial system exceptionably vulnerable to shock.


The instability of this international financial system which Healey refers to resulted from the decline of the Bretton Woods system which was introduced in 1944. Under this system international finance was based on the dollar (convertable to gold) and fixed exchange rates related to it. This system based on the dollar reflected the economic domination of the giant US economy.

            In order to sustain its levels of production the US was forced to launch the Marshall Aid plan to rebuild the war ravaged economies of Europe and Japan. Over the course of the next decades the rise of West German and Japanese economies in particular, undermined this US domination. In 1971 the Bretton Woods system collapsed. Nixon unilaterally ended the convertability of the dollar into gold in order to defend it. This marked a new era of floating exchange rates which brought to an end a period of relative stability.

            The oil crisis, when OPEC countries quadrupled the price of oil, threatened to push the world economy into recession. OPEC countries were estimated to have effectively taken $68 billion dollars out of the world economy. Obviously the oil buying countries had considerably less money to invest whilst the oil producing countries did not have the population to import goods to such a level. Most of this money was held in dollars in European banks. In an effort to prevent a recession, billions of dollars were lent to Third World countries, which built up enormous debts. Hence developed the international debt crisis which has weighed on the world economy ever since.

            The growth of the global financial markets in a regime of floating exchange rates has had a profoundly destabilising effect. Healey comments:


These capital flows from one country to another were managed by young men in the dealing rooms of big companies as well as in financial institutions, who had square eyballs from watching their computer screens. Their minds were square as well; they treated money as a commodity, like coffee beans or grains of rice, and made a market in money without any reference to the underlying economic realities it was supposed to represent. Yet the flows of capital managed by these gilded young lemmings had become the main influence on exchange rates, and through exchange rates on trade, prices and interest rates which in turn influenced the rates of growth in every country.


These ‘gilded young lemmings’ were taking decisions which would impact on the lives of countless millions of people without the least consideration of the consequences of their actions. With the ‘international financial revolution’ we truly entered the era of ‘Casino capitalism’, with futures markets and ‘junk bonds’: little more than gambling, making money out of money. Even a died in the wool social democrat like Healey warned:


The finance revolution, and the computer revolution which has made it possible, have produced a world all too reminiscent of Britain two or three centuries ago when greed infected honest citizens with a speculative fever, which produced strange collective madnesses like tulipmania and the South Sea Bubble. At that time the consequences were limited largely to the speculators themselves. Today the consequences of a similar speculative fever have produced a global financial system so fragile and yet so interdependent that it is vulnerable to many possible sources of breakdown and its breakdown could plunge the western world into a recession quite as damaging as the Great Slump of the ‘thirties, with political consequences even more dangerous.


            The competition in the global market has of course, led to a massive destruction of jobs as companies strive to ‘make themselves lean’, engage in round upon round of ‘restructuring’ and ‘down-sizing’.

            The consequences for Third World countries weighed down by debts most often incurred by military regimes for gigantic prestige projects, have been absolutely catastrophic. Under instructions from the IMF and the World Bank these countries have been forced to carry out deflationary measures, cuts in social services and state funding for local industries and so on. Whole industries have been wiped out and vast sections of the population impoverished, forced to struggle to survive in the ‘informal sector’. These brutal measures have been imposed in order to prevent bank failures in the west as a result of defaulting on loans by these countries. They have been forced to turn to export crops in order to raise money to repay the interest on their debts. Countries which were previously self sufficient in food have been reduced to begging as the majority of their population is malnourished in some cases teetering on the brink of starvation. The big powers and the international financial institutions have imposed what might without exaggeration be described as a disguised holocaust on Third World populations.

            Between 1973 and 1982 Third World Debt rose from $130 billion to $610 billion. In 1987 it broke through the $1,000 billion barrier. Between 1982 and 1990 $418 billion dollars more than was received was paid over by the Third World countries to the rich nations. Writer Susan George points to the fact that this is the equivalent of six Marshall Plans being squeezed out of the poor for the benefit of the rich, in order to stop the big western banks collapsing as a result of their lending to Third World military regimes. Despite the fortune paid over  to the North the debtor countries found themselves with 61% greater debts at the beginning of the 1990s than in 1982. Susan George accurately identifies this as “a resource outflow on a scale far outstripping any the colonial period could command”.

            How does this relate to our discussion on the EU? The fundamental point is that the official leaderships of the labour movement accept entirely the framework of the ‘global market’. Or as Blair himself has put it in his pompous fashion:


The single biggest transforming element in the context of defining economic policy is the globalisation of the markets. If economic policy is constructed in defiance of that then it won’t work.


In other words economic policy must be based on competing within this global market as a given condition about which nothing can be done. A Labour government within the context of the EU has therefore to base its policy on out competing Japan, the US and others. Such an extraordinary position of prostration before the ‘realities of the global market’ means acceptance of the relation of forces between the TNCs and the Third World countries, the IMF and World Bank. In a recent speech Shadow Foreign Secretary Robin Cook. spoke of ‘relieving’ this burden on these countries. However, he was not speaking of cancelling debts for which the populations have no responsibility, but of merely limiting the amount they continue to pay. In other words he accepts that they must continue to pay billions to the big banks, on debts for which the population of these countries are not responsible, in order to keep afloat these banks!

            Partnership between labour and capital on this national terrain means not only the abandonment of the interests of working people, but also those of the impoverished millions who have been thrown into a state of oppression and despair in order to preserve the profits of the western banks and to preserve a financial system based on super-exploitation. And the purveyors of such views have the audacity to call themselves socialists!

            In her book “The Debt Boomerang”, Susan George exposes the cost to the general populace in the major capitalist countries of this debt regime, the money that is effectively charged to the general populace in order to sustain the banks.


The impact of third world debt fallout in the North is much less well known - doubtless because the consequences of debt are far more serious and life threatening in the South than in the North. Nevertheless, we believe it is vital to show how such a seemingly distant phenomenon in fact harms nearly everyone in the North...ordinary citizens of debtor and creditor countries have every interest in joining forces to demand an entirely new approach to third world debt. Although people in the South are far more grievously affected by debt than those in the North, in both cases, a tiny minority benefits while the overwhelming majority pays.


Instead of seeking to unite ‘ordinary citizens’ of these countries the Labour leadership places itself in the same camp as the very forces which are responsible for the dire circumstances suffered by the majority of the population of the planet. Instead of solidarity with the poor they accept common interests with European capitalists in their struggle to win in the global market.


2.       EU - The Political & Social Content.


Social Partnership & Business Unionism.


            The TUC has supported the idea which is common currency in the EU of ‘social partnership’; that is, that the employers, employees and government all have a common interest and should work together for ‘economic success’. To a large degree this is based on the German model which is supposed to have fired the post-war economic success of what was a ruined country.

            In our view this subordinates the interests of workers to the profitability of capitalist firms. Moreover, it accepts that workers have the same interests as their own employers and compete with workers of other nationalities. It therefore presents our friends as our enemies and our enemies as friends.

            In the trades unions this has found the worst expression in the case of the AEEU where they agreed a deal with Hoover to concentrate production in Cambuslang. In return for  extra jobs, for a wage freeze, flexibility and a host of other concessions, they connived in the closure of the factory in France at Dijon. Despite the protests of the French unions and the Scottish TUC, Jimmy Airlie, long-time ‘left winger’ defended the deal in his usual robust and boorish way. So much for international workers solidarity!

            Of course, not all unions have sunk to the level of the AEEU, bolstered as it is now by fusion with the scab outfit the EEPTU. However, there are already clear indications that acceptance of the concept of ‘social partners’ is dragging the trades unions rightwards towards business unionism. It was the EEPTU which pioneered business unionism in this country. In place of the usual efforts of recruiting workers at the factory/office level, the EEPTU sold itself to the employers as a ‘responsible’ union seeking partnership with them. In reality it was offering a docile union in return for the right to collect subs from the workforce. The EEPTU was the extreme wing of business unionism, as is now well known, conniving with the owners of the Sun. It was granted recognition in return for helping them to cobble together a scab workforce during the Wapping dispute.

            Business unionism was pioneered in the United States where it has succeeded in reducing union density to 15% of the working population. During the recession years of the 1980s business unionism in the US agreed to a host of ‘take back’ agreements: cuts in jobs and wages which were considered necessary as a result of ‘market conditions’. Business unions have been prepared to see working people pay the cost of mass unemployment in order that the union apparatuses can survive.

            Many trade union leaders have revered the results of close collaboration between employers and the unions. Jack Adams of the TGWU was recently in Swindon to visit Rover. He praised the success of the firm which was supposedly based on this collaboration. Of course, in monetary and market terms this is undeniable. However, this success has been at the expense of the destruction of a large percentage of the jobs which existed in the old British Leyland, and the destruction of the independence of the unions.

            So long as the trades unions continue to accept that profitability and market competition are the key criteria then they will fail to defend the jobs of their members. For many years now, especially since the miners’ strike, there has been no significant resistance to redundancies, with a line of least resistance (no compulsory redundancies) being followed.

            With a considerably reduced workforce in many companies the remaining workers have often had improved wages but at great social cost to the working class as a whole, through virtual acceptance of mass unemployment. ‘Social partnership’, based as it is on the concept of the common interests of workers and employers, in the context of fighting the good fight in the conditions of the ‘global market’, can only serve to worsen the employment situation since a labour movement which subordinates workers’ interests to ‘economic success’ will fail to fight for the social interests of working people, the unemployed, and the poor. Those interests can only be fought for on the basis of a rupture with capitalism and a policy based on production for social needs rather than profit (more on this later).


All Aboard the EU Partnership Express?


            Whilst the TGWU and other unions are hardly about to adopt the measures that the EEPTU did, there are worrying signs as to their direction having swallowed ‘social partnership’ whole as a desirable aim. In February of this year, it was reported in the Guardian that four trades unions (the TGWU, the GMB, RMT and ASLEF) had agreed ‘in principle’ to the proposal put to them by a consortium comprising two major German businesses, together with Costain, which was seeking to bid for the contract to build the Channel Tunnel Rail Link. According to the report, in return for an investment of £300,000 they would get a seat on the Board.

            Whoever wins the bid to build the Rail Link will not only own it but would be given European Passenger Services, the company which runs trains through the Tunnel. Involvement in such a scheme would pose the obvious contradiction of unions supposedly opposing rail privatisation and yet supporting the building of a private Rail Link (should they take the plunge). Their policy is for the renationalisation of the entire network yet if they were to follow this course they would not only be supporting a privatised rail link, but sitting on the board of the company owning it; a company running it not for public service, but to make a profit!

            Such trade union involvement, however, would have implications reaching far beyond the question of the railways. Any unions participating in such a scheme would in effect be buying union recognition from the consortium. Some would no doubt point out that trades unions have financial investments in private companies. The author of this bulletin is opposed to such investments. However, leaving that aside, such a deal is entirely different. The unions would be buying the right to recruit from a private company. What would their representatives on the Board be there for? To defend the interests of their members or to see their investment flourish? Such involvement would necessarily mean subordinating the interests of the union members to the profitability and ‘success’ of the firm. This is the whole logic of ‘social partnership’.

            For any of these trades unions to take the decision to buy their way into this, or any other consortium, would be a fateful decision. It would place them into the camp of business unionism. Such a decision would have its own logic. If you invest your members’ money into a private company in order to win recognition, why not do it in other companies, or in relation to other projects? There would be no reason not to, other than financial constraints. Such a step would pose a dangerous precedent for the labour and trade union movement.

            Bill Morris wrote a denial in the Guardian, though it is a source of some worry that it did not express any opposition to the idea, merely saying that if any such offer was received the union executive committee would decide on it. The recent RMT AGM overwhelimngly opposed any involvement and determined to campaign against any other trades unions following this road.

            The RMT executive committe had not even discussed the issue, though Jimmy Knapp failed to deny that he or some other union officer has been involved in meetings, even though such involvement would be completely at variance with union policy and without the authority of the executive committee which is the ruling body of the union in between AGMs. The recent AGM overwhelmingly opposed involvement in this or any similar scheme and called for the TUC to oppose any union involvement.

            The only trade union leader to comment publicly was John Edmonds of the GMB who said that the offer was a reflection of the fact that in Europe businesses recognised the benefits of working with the trades unions. Long live Social Partnership and get ready to count the profits (or the losses, of course)!


Enter King John.


            The Labour leadership, from 1987 onwards has promoted the concept of ‘social partnership’. It was under the impetus of the moves towards a single market, that erstwhile proletarian rabble rouser and bruiser John Prescott, together with Robin Cook and Gordon Brown, brought out a policy document on ‘Public Sector - Private Sector Partnership’. This now forms the cornerstone of Labour’s economic policy.

            Based on the premise that the resources that a Labour government would have at its disposal would be severely limited, it argued that it would be necessary to draw on private investment in order for Britain’s decaying infrastructure to be rebuilt. Labour did not want to be seen as ‘the party of taxation’, therefore they would not fundamentally alter the taxation regime that the Tories had introduced. They would therefore create this Public Sector - Private Sector partnership.

            The document also included a number of other ideas such as leasing arrangements, whereby, for example, private sector companies might build new trains and lease them out rather than sell them outright. This would, ran the argument, enable new stock to be built which otherwise might not be built because of lack of funds.

            We have already seen what this means in relation to the London Underground Northern Line. The new stock is to be built by GEC which will own the trains and lease them back to LU for £20 million per year. Staff currently employed by LU to maintain trains and carriages will be transferred over to GEC. In other words this is a means of back-door privatisation. This is the content of the Public Sector-Private Sector partnership.

            When other big infrastructure projects are launched, such as the rebuilding of the West Coast Main Line, it is most likely that whoever wins the franchise to build the new track will own it.

            This is undoubtedly a trend which is growing across different industries. Recently in Swindon we heard of the prospect of a new wing of the Princess Margaret Hospital being open to tender from private firms, including Tarmac. According to local trade union officials, if this project does go ahead then the new building would be leased to the NHS and most likely all the staff, except the medical side, would be employed by the private owners.

            All this means in practice that Labour has gone over to privatisation, as a result of its refusal to support increased taxation (even on very high earners) as necessary for funding public services, and under the pressure of its European policy.


The Social Charter.


            Those union leaders who consider the EU to be ‘progressive’ point to the Social Charter. It was adopted in 1989 as “a declaration of principles”. It covered conditions of employment, minimum pay, freedom of association, right to bargain and strike, training, and Health & Safety. This was a very nebulous document full of high sounding but amorphous language, with references to ‘fair remuneration’ and ‘a decent standard of living’. It was in any case, under pressure from Britain, watered down considerably. It was accompanied by an Action Program supposed to facilitate its implementation. But as one writer has indicated:


...this (program) eliminated all references to collective bargaining and freedom of association as objectives of EU community action. This was justified by the developing principle of subsidiarity.


Thus many of the ‘principles’ were left to be implemented, or disregarded, by the member states. Of the principles which were seen as suitable for EU action many were to be introduced by ‘recommendations’ or ‘opinions’ but in reality were not binding on member states. Hence, despite all the hype, of 17 draft directives subsequently introduced, 10 dealt with Health & Safety alone. At the Treaty of European Union agreed at Maastricht in December 1991, a Protocol on social policy was signed and an agreement reached by 11 of the 12 states, with the British government ‘opting out’.

            Article 1 of the Treaty redrafted Article 117 of the Treaty of Rome. The objectives of the EU now included ”promotion of employment, improved working conditions, social protection and dialogue between management and workers”.

            Through Article 2 ‘qualified majority voting’ was extended to cover not only Health and Safety, but working conditions, information and consultation of workers, equality between men and women, and the integration of those excluded from the labour market. However, all this was severely limited by Article 2,3 which demands unanimity for legislation on social security and social protection of workers, protection on termination of employment, collective defence of the interests of workers, conditions of employment for third country nationals residing in the EU and financial contributions for job creation. In addition Article 2,6 excludes from the EU legislative process, “pay, the right to association, the right to strike, or the right to impose lock-outs.” Thus the crucial issues for working people are excluded from EU legislation.

            Even in the article which extends ‘qualified majority voting’ we have merely     requirements. It stresses the need “to avoid imposing administrative, financial and legal constraint in a way that would hold back the creation and development of small and medium sized undertakings.”

            Hence most of the legislation that has been introduced, which we can use to our advantage, centres on Health & Safety, rather than employment rights and trade union rights in general. In any case, paper rights are not necessarily enforced, as the case of women’s wage levels shows two decades after equal pay legislation was introduced.

            Clearly, any legislation which gives us the opportunity to drag up our conditions from the parlous state into which they have sunk, must be seized. However, that is no reason to promote illusions that the Social Charter will offer some wondrous world in which workers will have a host of rights, and bring about an end to inequality and the loss of democratic and trade union rights. As we have indicated earlier the Social Charter is both a means of propaganda to sell the EU to the mass of the populace and a means of an ‘equal playing field’ on which competition takes place. In any case it subordinates social policy to neo-liberal economics. The gap between the rhetoric and the reality of this competition - destruction of jobs and impoverishment of large sections of the population - is massive.


Works Councils.


            The TUC and many trades union leaders look to the extension of the Works Council system to the UK as a progressive step towards ‘social partnership’. They look to the German model where such Councils have been in existence for many years. They are supposedly a means of giving workers a stake in the firm. In reality Works Councils are a forum for identifying the interests of the workforce with the success of a company. They are organised on the basis of elections not of union reps but from the workforce overall, although in Germany 76% of Works Council reps are trade union members. They are a forum for ‘consultation and information’ rather than negotiation.

            The European directive of September 1994 makes it obligatory for Companies with more than 1,000 workers in their base country, plus more than 150 in two other EU countries, to set up a European Works Council. More than 100 large British companies will be covered by this directive as well as companies such as Ford, Philips, Nissan, Sony. They have two years to set them up. Although they will not have to include British representatives owing to the government’s opt out, most companies will probably include reps from factories here.

            United Biscuits has already reached agreement with the unions on a European Works Council, whilst Coats Viyella has said it will follow suit. The viewpoint of the UB Human Resources Director gives an interesting indication of the usefulness of such bodies so far as the management is concerned.


We believe that a workforce that understands the objectives of the business and the pressure on it is better able to respond to necessary operational change.


The agreement reached with the unions says that:


both the management of United Biscuits and its employees and representatives believe that the interests of the business, and therefore the welfare of all those involved in it, are best served by there being a joint understanding of the performance of the business, of its operating environment and market places, and other matters of genuine mutual concern.

            In other words it will be an arena for informing the workforce reps of pre-determined decisions taken according to ‘market needs’ and promoting ‘necessary operational change’ (job loss and speed up).

            Of course, Works Councils can be an arena of conflict, but they were founded on the basis of the supposed common interest of workers and employers, and the participation of British trades unions will undoubtedly be on such a basis which accepts ‘social partnership’. Should such Councils be set up then it is probably in the interests of the unions to seek to win all positions on them, but without illusions as to what they are, and at all times defending their complete independence from the employers. They might be used to develop links with trades unions in the other countries in which a particular company operates, but defence of the interests of employees requires a break from the idea of common interests with the employer.


3.       Monetary Union.


            The institution of a single currency will divest elected national parliaments of powers in relation to economic policy. Monetary policy will be under the control of a European Central Bank. The monetary criteria on which the single currency will be based is:


·       a budget deficit not to exceed 3% of Gross Domestic Product.

·       government debt not to exceed 60% of GDP.


            To implement such criteria many countries which are currently well outside these targets will have to either raise taxes substantially or make massive cuts in social spending, or a combination of both.

            If any country exceeds these strict monetary limits then the Council will make recommendations to its government to remedy the level of deficit. Should a government refuse to follow these recommendations or fail to bring its deficit ‘under control’, then sanctions could be imposed, including fines.

            In fact the European parliament has pointed out that the recommendations of the Council for dealing with the problems of member states will not be published, nor even declared to the Parliament of the state in question. The European Parliament, which supports monetary union, has pointed out that:


...when economic policy making takes effect (under monetary union) the scope for parliamentary influence will suffer at national and European level since national Parliaments will lose their ability to discipline national governments because the Council will act by qualified majority, while the European Parliament will only be notified after the event...


            The consequences of this will mean the dictation of deflationary policies, cuts in government spending which will affect the social conditions of working people and the poorest sections of the community.

            The European Parliament has also bemoaned the fact that:


...European Monetary Union appears to be exclusively geared to stability; (the European Parliament) while acknowledging the importance of stability, calls for deflationary effects to be prevented when the member states meeting the strict convergence criteria gear their policy to these criteria; calls for the objective of responsible growth and a high level of employment and social protection to be taken equally seriously, even though there is no provision as yet in the Treaty for specific binding measures in this regard.


Such protection and employment policy is of course, in contradiction with the strict monetary criteria on which Maastricht is based. Moreover, it is whistling in the wind when the European Parliament which had been seeking ‘co-determination’ with the Council has neither achieved that nor has it any legislativery powers whatsoever.

            Whilst voting for ratification of the Maastricht Treaty the EP, in addition to the above comments, made some scathing criticisms of it. Its statement on the Treaty drew attention to “major shortcomings”.


·       It fails to provide any economic policy authority “with adequate democratic legitimacy” to counterbalance the power of the European Central Bank.

·       It does not provide a ‘co-decision’ making power whereby the Parliament and the Council of Ministers would have the same decision making powers over legislation. The Council will be able to act unilaterally in the absence of agreement with the European Parliament.

·       It fails to provide for Parliamentary assent for future Treaty changes or measures concerning citizenship.

·       It introduces a provision allowing Council unilaterally to repeal international agreements to which both Parliament and Council had previously given their assent, and to adopt sanctions without Parliament’s approval.

·       “Deplores the fact that when economic policy making takes effect, the scope for national parliamentary influence will suffer at national and European level since national Parliaments will lose their ability to discipline national governments because the Council will act by a qualified majority, while the European Parliament will only be notified after the event; is shocked by the provision that recommendations to the individual Member States will normally not be disclosed, even to the Parliament of the Member States concerned.”


            When you consider that these are the criticisms of supporters of monetary union it indicates the problems that a single currency will create. It would be impossible to carry out a policy based on the broad interests of working people, the poor and the unemployed when a strict monetarist policy was imposed by a European Bank over which we had no control. They key question here is not ‘national sovereignty’ but the fact that the social and political interests of the mass of the populace of all European countries would be undermined by such a policy. For these reasons the labour movement should oppose monetary union on such a basis.


4.       Withdrawal?


Does all this mean that withdrawal from the EU is the only option for a labour movement wishing to follow a socialist policy? No. It is my view that to campaign for withdrawal from the EU would be to take a nationalist direction. We do have to face up to the realities of the ‘global market’, though not by capitulating to them like Blair and co. A socialist government in Britain, or any other country, would have to base its survival, in the face of the efforts of international capital to undermine it, on building international support amongst the working population, the labour and trade union movements. A socialist policy would inevitably bring it into conflict with the EU institutions, based as they are on the ‘free market’ and the strict monetary criteria. Social spending involving a deficit above the 3% level would lead to demands to ‘control’ its spending and sanctions might follow.

            Such a government would have to appeal to all those political and trade union forces throughout Europe which are opposed to the existing political basis of the EU. It would have to seek to build a Europe wide movement in support of pro-working class policies and for a break of the EU from its ‘free market’ and monetarist basis. It would be foolish to underestimate the scope of such a task. Nevertheless, it would provide the only hope of survival in the face of efforts by the American rulers and European capitalists to destroy what they have always feared - the example of another road. Their effort to destroy the Nicaraguan government, for instance, was not based on some fear of its power (this is a country the size of Wales) but that the example it set based on attempting to serve the needs of the impoverished population might light a spark which would flare up elsewhere.

            Instead of proposing to withdraw from the EU those forces in the labour movement here, which are opposed to its political and economic basis, should concentrate their efforts on building links across Europe with like-minded people and engaging in debate about what the EU is, and the need for an alternative based on social needs and not on subordination to the ‘global market’ at the expense of the majority of the population.

            Does this mean that it is possible to reform the EU with the prospect of a socialist Europe? This will be tested out in practice. However, if the insularity of the British labour movement is to be overcome then there has to be a multiplication of Europe-wide and international contacts at every level, to open up a practical road to European and international working class solidarity. We should have a perspective of a political challenge to the institutions and pro-capitalist foundations of the EU. Such a challenge, if it takes the form of withdrawal, would only mean isolation rather than the building of a movement within the EU which would support such a challenge.


Fortress Europe.


            The 1985 Schengen agreement reached by 5 countries - France, Belgium, Luxemburg, Italy and West Germany aimed to create a border free zone within the EU. This ‘Schengen space’, expanded to nine countries, came into operation on March 26th 1995. Whilst it was presented as the closing down of barriers to the movement of people it presented another aspect to ‘aliens’. The French paper Le Monde observed:


The initial object of Schengen, the free movement of persons across the space formed by the nine countries signature to the accord, has shifted to the other aspect - an air-tight (common) external frontier and stricter controls on immigration.


            The concrete goals of the Schengen accords were:


·       generalising the criteria for accepting and rejecting visa applications, and fixing a common list of countries from which a visa would be required.

·       each state to refuse admission to any person considered “undesirable” by any other member state.

·       a central computer system to be set up to record the identity of and information about all persons subject to control or considered “undesirable”.

·       fining airlines and ferry boat operators if they carry a passsenger into the ‘Schengen space’ without the necessary documents. As a result transport operators now carry out their own checks outside the Schengen area, and refuse passage to anyone they suspect does not meet the entry criteria.


            Since 1988 the Schengen committee pilot group has been working in three areas: enlarging the number of signatories to the agreement, standardising police legislation in each country, and organising the Schengen Information System - a massive computerised surveillance system which already carries 5 million files, largely of “undesirable aliens”.

            The police force of every member state and the visa issuing consular offices of non-EU countries now have a link to this ‘electronic fence’. The supra-national database is not subject to the data protection acts of member states.

            Although the frontiers have been taken down even long term residents who are not EU passport holders are supposed to report their presence through a written Declaration of Entry on the Territory of each member state!

            The supposed ‘struggle against illegal immigrants’ has been used to justify the extension of police powers. In France, spot checks can be carried out within twenty kilometres of any border. Schengen also gives national police forces the right of pursuit across national boundaries. In Britain, of course, the Tory government has strengthened powers to deal with ‘illegal immigrants’ much more quickly, denying them the right of appeal.

            Over the past few years the growth of fascism and racism in Europe has been very marked. The electoral success of barely disguised fascist parties together with the increase of racist attacks, notably in the reunified Germany, but in other countries also, has been a cause of great concern. However, there is an almost universal state racism which has been employed against immigrants. Whilst guaranteeing free movement of EU citizens, ‘Fortress Europe’ presents barriers to people from outside the Union. In practice that means black people. The racists pose the problem of immigrants as the cause of most of the problems faced in Europe. The Schengen accords and the methods they apply in practice, despite the anti-racist words of the European governments, feed this racist propaganda by pandering to the view that Europe is faced with a flood of immigrants coming in to take ‘our jobs’ and ‘our houses’. In reality immigrants in Europe, from the ex-colonial countries have served as a source of cheap labour, tending to do jobs which the nationals will not do. Schengen tends towards the criminalisation of people fleeing from poverty or violence from countries exploited by the old imperial powers.

            The free movement of working people across national boundaries should be counterposed to what is in fact a racist policy. It is black people who languish in camps for ‘illegal immigrants’ such as the new one at Campsfield in Oxford. The labour movement should challenge the notion that we are threatened by a massive wave of immigrants, and demand full political rights for immigrants.


National Sovereignty?


At the recent RMT AGM there was a big debate on the question of the EU and monetary union. One of the resolutions spoke of the defence of ‘British sovereignty’. The mover of the resolution quoted Lord Tonypandy to indicate the breadth of opposition to monetary union. He referred back to the debate in 1974 and derided those who had opposed joint platforms with Tory MPs. Just because you agreed with Enoch Powell on Europe, he said, it did not mean you agreed with him on anything else! This sort of motivation for opposition to Maastricht enabled Jimmy Knapp to say that opponents of the EU within the labour movement would end up in the camp of John Redwood and the little Englander opponents of further integration.

            It is one thing to talk of defending the national sovereignty of an oppressed country, such as Cuba or Nicaragua, which the United States has attempted to undermine. Such national sovereignty socialists should defend. But the sovereignty of an imperialist country like Britain, albeit a declining one, is another matter entirely. When the right wing speaks of defending British sovereignty they are defending Britain’s ‘global role’, defending the position of British capital in relation to its major competitors; hence their fears of ‘domination’ by the Deutschmark. Yet they were never bothered by the domination of the dollar!

            To identify the interests of working people with defence of ‘British sovereignty’ confuses the real issues at the heart of the debate over the EU. The interests of working people are international or they are nothing. This is even more so today where the globalisation of the money markets and the power of the Trans-National Corporations limit the ability of any government to control a national economy. There are no national solutions to these problems. That is why it is necessary to endeavour to build a Europe-wide opposition to the ‘free market’ EU on the basis of the social and political interests of European and other workers as a whole. This can only be done through an internationalist opposition to the EU as currently constituted. If the ‘global market’ and the Trans-National Corporations are to be challenged it will not be done on the national terrain, but through the combined efforts of workers across the globe who break with the so-called ‘national interest’ which binds them to ‘their own’ rulers.



At the RMT AGM, Jimmy Knapp said that we could only influence the direction of the EU from inside. But the question is, in what direction do the labour and trade union leaders want to influence it. The majority of them accept the basis on which the Single Market was set up: to compete in the dog eat dog ‘global market’. Instead of approaching the question from the standpoint of the interests of the working class, the oppressed, the impoverished (not to mention the starving) on the international level, they tie the interests of workers to the coat-tails of their exploiters and ‘success’ of ‘our’ capital. These leaders have yet to challenge the monetarist basis of Maastricht and they appear to accept that global competition in its most modern form is a fine thing!

            So far as this writer is concerned ‘influencing the direction of the EU from inside’ can only have any socialist content if it means challenging its free market basis, the monetarist basis of Maastricht and opposing such a monetary union.

            Our policy should not be based on British withdrawal because it is necessary to unite with other European workers in challenging the capitalist foundations of the EU; challenging the anti-democratic nature of the EU institutions and building a united front to fight for the interests of working people against the efforts of the employers in all the countries to make us pay the cost of the increasingly cut-throat international competition which has destroyed millions of jobs.

            To withdraw would isolate Britain and its labour movement. As we have indicated earlier the application of a socialist policy would inevitably lead the employers and their governments in Europe (and the US, of course) to seek to isolate and destroy such a government. To apply a socialist policy would ubdoubtedly bring us into conflict with the EU institutions and the political basis on which they are founded. It would be necessary to prepare for such an eventuality by building practical links across Europe, with those forces who understand the anti-democratic and pro-capital basis of the EU.

            We should seek to build a European movement of trades unions and political organisations which would:


1.    oppose the ‘free market’ basis of the EU.

2.    oppose the monetarist basis of the Maastricht Treaty.

3.    oppose the undemocratic domination of the European Commissions and the Council of Ministers.

4.    demand legislative powers for the European Parliament.

5.    support full political rights for all immigrants and the pulling down of the walls of ‘Fortress Europe’

6.    oppose a single currency controlled by unelected bankers.

7.    campaign for a job creation program and the introduction of a 35 hour week.

8.    oppose privatisation of the railways and public utilities.

9. seek international collaboration between trades unions and political organisations to tackle the domination of the ‘Third World’ countries by the TNCs, the IMF and World Bank.

10. support the demand of workers in ‘Third World’ countries for the cancellation of the debt.


On such a basis working class organisations would begin to counterpose their own solutions in contrast with the ‘free market’ policy of the EU. Jobs cannot be defended nor new ones created without a fundamental break from ‘social partnership’ and ‘global competition’.






April 2004

this article originated as a discussion document for Swindon TUC written in 1995

For Socialist Unity ~ For Internationalism ~ For Peace ~ For Justice ~ For Unity ~ For Socialism