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Europe: modern and inevitable, or simply passé?

The central tenet of New Labour under Tony Blair has been that we must be closely integrated into a Social/Christian Democratic Europe; while his programme has been presented to the people as building on the foundations left by Thatcherite conservatism, his party's actions so far in office have slowly but steadily moved to a harmonisation of our practices with those of central Europe- whether in the labour market, or in the social charter, or devolution and a Britain of regions, or 'tax harmonisation', or in such apparently small things as stamp duty (actually a recipe for serious house-owner immobility). He has proclaimed that this is both inevitable and 'modern'. He has tried to paint the Conservatives as anti-European for trying to stand on the ground of the status quo- 'in Europe but not run by Europe'. But the truth is that, unpopular as they still are, they are on these matters basically in tune with public opinion, which will prove an impossible hurdle for Mr. Blair to overcome in pursuing his European programme.

For Labour has misunderstood the European issue, just as for years it misunderstood the socialist issue. New Labour has made itself over on socialism, presenting a 'middle way'- a sort of bowdlerised free market. But on Europe it shows its heart still lies with socialism. Labour's love affair with Europe began when M. Delors, then head of the European Commission, announced to our Trade Union Congress conference in the late 1980s that Europe would press forward a Social Agenda to 'complement' the Single Market which he painted as Thatcherite project- as indeed conceptually it originally was. From then on, Labour dropped its previous hostility to the EU (remember the young Blair's 'anti' position?), seeing it now as a way of reversing the hated Thatcher reforms by the back door. This reversal could never be sold to the British people as a free-standing package; but Labour's idea was that it would be accepted as part of the dispensation from an 'inevitable' Europe.

For this strategy to proceed it is necessary for us to accept that more and more integration into continental Europe is indeed inevitable. Yet both history and analysis of our current situation suggest the opposite: that our separation from the continent and our progressive integration into a global order led by the USA are the inevitabilities of today.

Let us start with politics- easily the least controversial part of this discussion. It is plain that Britain's history has been dominated by the desire to stay independent of the continent's many imperial projects; and that partly in response to those projects it sought a counter-balancing force in the Empire and Commonwealth, the world's first successful 'global' project. The Anglo-Saxon world was born and formed the basis for the alliances in two world wars to resist continental expansionism. Turning from history to the present, we see that this Anglo-Saxon world is seeking to build a free trade environment based on the World Trade Organisation, supported by the military force of the North Atlantic Treaty Organisation in maintaining international law and order. Politically, the European element in these arrangements is fairly puny: it goes along, grudgingly from force majeure, with what it sees as an alien free trade philosophy led by an uncongenial monopoly superpower.

But, you will rightly say, we joined Europe because of economics; we were repeatedly told that we were too small to 'go it alone', better to join a 350-million European market. There was also a view within the Foreign Office (and the US State Department- witness Dean Acheson's dictum that 'Britain has lost an empire but not yet found a role') that we should join for political reasons, to 'punch above our weight'; however, that view is now a minority one among our diplomats, as shown by the recent correspondence in the Sunday Telegraph. Indeed, in serious recent episodes affecting our interests- the Falklands, the Gulf War, and Kosovo for example- it has been our alliance with the US that has served both our and their interests. That point has not been lost in the White House either, whatever the State Department may have tried to say.

But if economics was the reason, we can now see we were badly mistaken. With the four economic things that Europe has done- customs union, the single market, harmonisation and the single currency- our interests have been badly served. The customs union has given us protection and high prices for food and manufactures, of both of which we are heavy net importers. This implies that while our farmers and manufacturers gain, the rest of us lose far more and would be better off out, giving them compensation. The single market has been a vehicle for harmonisation of standards upwards and hence the reduction of consumer choice; our consumers would be better served by rival UK and continental standards with plain old free trade. Harmonisation has proved to be a method by which socialism can be reimposed on us. And the single currency would give us a 'one-size-fits-all' monetary policy that would most of the time not suit us at all.

Both modernity and inevitability suggest we will not continue along this road for very long, at least unless some very drastic changes occur in the 'European Way'- changes which are most unlikely since they would run counter to the whole history of the European Community since it was founded in the 1950s. The present Tory policy of 'in Europe not run by Europe' is a sound attempt to buy time, which at least goes roughly with the grain of British interests. But the logic of those interests implies that we will choose to strengthen our attachment to the global (and the truly modern) world being led by the United States. Joining NAFTA looks like the best ultimate way to achieve this- it gives its members free trade with whomever they choose together with the muscle of a big club against free trade abusers. It would give Britain the chance to maintain its global course while seeking in a friendly spirit to retain free trade and close politico-economic co-operation with the continent.

Patrick Minford is professor of economics at Cardiff Business School  

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