foreign policy

General election 2015: Britain and the European Union – are there alternatives?

A couple of weeks ago, I bemoaned the lack of discussion about foreign policy in the general election campaign. On that occasion I wrote that none of the main parties had ‘dared to mention foreign policy at all’ and that the campaign lacked any sort of ‘discussion about Britain’s role in the world, the degree and veracity of Britain’s international ambitions and the country’s place in an ever-changing and increasingly uncertain global environment.’

Strong words indeed. But I may be prepared to eat them. For judging by recent developments it is as though the political world took note of my criticisms and responded accordingly. This week in fact saw two notable developments in the campaign concerning Britain’s place in the world.

The first came on Friday, when Ed Miliband travelled to Chatham House to set out Labour’s foreign policy priorities. The speech did much to highlight how British policy will likely develop under a Labour government.

For a start, a Miliband administration would likely cut the armed forces less than if the Conservatives remain in power after 7 May. As is usual – and perhaps understandable – for any politician, he refused to be drawn on specific figures. But he went further than most, rejecting ‘the extreme spending cuts that the Conservative party propose’ and calling Cameron’s already savage cuts to defence ‘truly catastrophic’.

Miliband also made clear that Labour would be committed to what he called ‘hard-headed multilateralism’. The party leader was at pains to stress that the biggest challenge to Britain today does not come from nation states but from those threats that cross national borders – in particular Islamic terrorism, climate change and migration. For Miliband, such issues can only be dealt with if ‘we work with allies across the world and seek to strengthen not weaken multilateral institutions.’

As part of this, Miliband’s analysis centred on Britain’s future in the EU. As he rightly put it, Britain is ‘stronger as a leading partner in the EU […] it is precisely our influence within the EU which makes us more influential in the world.’ The thrust of his critique was that under Cameron Britain has shirked its responsibilities and reduced its influence, not least because the prime minister has endangered Britain’s EU membership at the behest of ‘political forces in his own party and by his fear of other political parties in our country.’

The second main event of the week was not unconnected to Miliband’s speech: the announcement by Douglas Flint, chairman of HSBC – Britain’s largest bank – that his company’s board is actively considering whether it should relocate the bank’s headquarters out of London. Flint cited ‘regulatory and structural reforms’, including forced changes to the bank’s structure and the UK bank levy, as reasons why a change was under discussion.

But it was the uncertainties facing the British banking sector, and most obviously worries about potential British withdrawal from the EU under a future Conservative-led government, which appear to have hastened the review. As Flint put it at the company’s AGM in London, reforming the EU would be ‘far less risky than going it alone, given the importance of EU markets to British trade.’

There is perhaps some irony in the HSBC announcement. Relocating a company’s headquarters is not a cheap undertaking, and might well prove more trouble than it’s worth. And then there’s the matter of where to place the building – Hong Kong has emerged as the most obvious substitute, but the decision to put a bank’s finances under the glare of Chinese scrutiny is not one to take lightly.

Putting these developments to one side for a moment, all this talk of impending EU exit and ensuing economic doom and political obscurity has got me thinking. What would British exit from the EU – ‘Brexit’ as it’s often called – look like? What are the alternatives, if any?

It is a discussion that has been had many times before, and I don’t here in any depth want to recite what Parliament, the CBI, the European Movement and various academics have all already said on the matter. A few points are worth mentioning, however.

Some, especially Eurosceptics such as Conservative MEP Daniel Hannan, support membership of the European Free Trade Association (EFTA). Britain was instrumental to founding EFTA in the late 1950s and was a signature to the Stockholm Convention establishing the association signed in January 1960, before it left to join what is now the EU in 1973. The story goes that by rejoining what is a free trade area based on intergovernmental organisations, rather than a customs union like the EU, Britain would be free to set its own tariffs and tax rates and to negotiate its own foreign trade agreements.

But EFTA is a smaller player on the world stage. And joining EFTA doesn’t necessary mean less interference from ‘Europe’: EFTA states often participate in EU foreign policy operations; the organisation is represented by a Secretary General in most international trade discussions in the same way that the Commission represents the member states of the EU; the EFTA council and parliamentary assembly perform somewhat similar functions to the EU’s Council of Ministers and the European Parliament of old; and topics such as health services, energy, climate change, maritime policy and the environment feature regularly on EFTA’s agenda. This is not to mention that a UK return to EFTA is far from assured.

Others talk of the ‘Norwegian model’. This consists of being a member of EFTA but still accessing the EU’s Single Market through the European Economic Area (EEA), an agreement between the EU and EFTA established back in 1994. But there’s an obvious downside: although not an EU member, Norway contributes to the EU budget – a considerable amount when compared to Britain’s own per capita net contribution – and accepts the rules relating to the free movement of people – the much maligned policy which allows civilians from any EU member state to work and reside in the UK – without any political input whatsoever. And the EFTA Court, established to ensure compliance with the rules of the Single Market, is a supranational body not unlike the European Court of Justice. Even the Norwegian prime minister recognises problems in this arrangement. Then there’s the ‘Swiss model’, which closely echoes the Norwegian model but excludes services, a sector so vital to the British economy.

Beyond Europe, some remain hopeful that Britain might reinvigorate Commonwealth trade – an argument that seemed antiquated even in the 1960s – or join a North American free trade area, despite the fact that the US wishes Britain to remain in the EU.

This is what is most perplexing about the current debate over Britain’s future in the EU. The Union might not be perfect, and alternatives doubtless exist, but the options available to Britain are clearly second bests. This is why all of the main party leaders – David Cameron, Ed Miliband, Nick Clegg and Nicola Sturgeon – support Britain remaining a member of the EU. If others want Brexit, they need to explain why such poor alternatives offer Britain, and Europe, a better future. Even the briefest examination of these options suggests they don’t. This is why I might not eat my words just yet. Miliband’s speech and HSBC’s announcement were both welcome interventions in an otherwise foreign policy-free election. But they are just the beginning of a debate that the country deserves about its future.

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General election 2015: where is the foreign policy?

UKIP defections, Labour surge, leaked memos, non-doms, nuclear bombs, paid volunteering, police numbers, fiscal autonomy, fruit pickers and Joey Essex (again) – this week the election campaign has had it all.

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But perhaps the most significant intervention this week came on Tuesday when Tony Blair, the three-time election winning Labour leader still very much reviled and revered in equal measure, delivered a speech on Britain’s relationship with the European Union (EU). Blair was unequivocal in his condemnation of David Cameron’s policy of holding a referendum on continued British membership should the Conservatives win a majority on 7 May. In what he called a ‘momentous decision’, Blair explained:

I believe passionately that leaving Europe would leave Britain diminished in the world, do significant damage to our economy and, less obviously but just as important to our future, would go against the very qualities that mark us out still as a great global nation.

Unsurprisingly, then, Blair went on to suggest that there is neither a sound economic nor business case for British secession. A referendum would, as he put it, merely ‘take precedence’ over other, arguably more vital issues facing Britain today, not least the health of the health service. It might even irk a Scottish electorate still less than convinced of its commitment to the United Kingdom to vote for independence. Nor, Blair insisted, are the Conservatives on firm ground when they assert that a referendum is a necessary and welcome exercise in democracy:

I am aghast at some of the arguments used as to why having such a vote is ‘a great idea for democracy’. Apparently we should have a referendum because its 40 years since we last had a vote. That is seriously an argument for doing something of this magnitude and risk? A sort of ‘keeping us on our toes’ thing? So should we do the same for NATO? Or have periodic referendums not just in Scotland but all over the UK just to check popular feeling?

Of course, Blair here conveniently forgot his own party’s track record on referenda. It was, after all, the Labour party of the 1970s that committed Britain to its first ever national plebiscite – over the issue of British membership of the then European Community. And Blair himself agreed eleven years ago, almost to the day, to hold a referendum on the new constitution proposed for the EU. To be fair, as prime minister did so reluctantly and only in the face of strong opposition from within the party hierarchy – his trusted Health Secretary, John Reid, his deputy, John Prescott, and the then Foreign Secretary Jack Straw all argued that a referendum was necessary if Labour had any hope of performing well in either the 2004 European Parliament elections or the next general election. Weakened by the backlash to the war in Iraq, Blair had little choice but to submit the constitution to a vote. In the event, it was only a twist of fate – Blair’s commitment to a referendum compelled his French counterpart, Jacques Chirac, to hold one, effectively sealing the fate of the constitution – that saved Blair the embarrassment of having to go through with it.

Even so, the speech was doubtless Blair at his best, sharp in his analysis, cutting in his critique. It was also Blair on familiar territory. He developed a line of argument that he has preached many times before, even if he failed to practice it when he was in office. As he put it in his speech on Tuesday:

[E]ven as Britain declined in relative importance to the USA as a global power, we were able to maintain a position as one of the world’s leading nations. We kept our alliance with America strong. We entered the European Union partly to ensure our position. These are the two well-founded pillars of British foreign policy. And they’re mutually reinforcing. Through these alliances we exercise a power greater than our relative size would otherwise bring us. As one of the world’s traditional powers, this is a sensible strategy for us to pursue in order to be able to hold our position.

For Blair, EU membership has always been a pragmatic decision; a way of harnessing much greater influence than Britain can muster on its own in order to guide politics on a global scale. But Blair’s vision of twenty-first century foreign policy-making has also always used, and clearly continues to use, twentieth-century language: the notion of Britain leading Europe, exercising power and influence as a major actor in the international system and carrying weight in the likes of Beijing and Washington greater than it really should simply by virtue of geography and history. Blair’s Europeanism, like his foreign policy more generally, is conservative by its very nature.

Like him or loathe him, however, Blair’s speech was undoubtedly a landmark in the election campaign. That Blair is still espousing a global role for Britain is not in itself either noteworthy or new. But what is significant is the fact that a Labour politician today, or for that matter a politician of any political party, dared to mention foreign policy at all. For what has really marked this election campaign out has been the complete dearth of discussion about Britain’s role in the world, the degree and veracity of Britain’s international ambitions and the country’s place in an ever-changing and increasingly uncertain global environment.

Admittedly, foreign policy is rarely an election winner. Most recent works on the 1983 general election tend for instance to argue that, while the ‘Falklands factor’ did the Conservatives no harm, the war did not of itself propel Margaret Thatcher to a second election victory. It is also the case that discussions over certain aspects of British foreign policy have formed key moments in this election campaign. Take this week for instance, where the renewal of Trident was a major part of the Conservatives’ campaign. And, moreover, the EU itself has been part of the electoral battle, as it was most prominently in last week’s leaders’ debate.

But this is not to say that foreign policy does not matter. In fact, an Ipsos MORI poll conducted late last year placed foreign affairs as the sixth most important electoral issue for voters, ahead of unemployment, taxation, care for the elderly, pensions and housing. If you combine foreign affairs and the EU, the stances taken by political parties were shown to be as important as education and schools in helping voters decide which party to vote for. And yet, where we have seen foreign policy mentioned in this campaign the discussion has been simplistic at best. Trident wasn’t about defence but about Miliband’s perceived character flaws. And issue of the EU has really been conflated with that of immigration and used by UKIP as a stick to beat the other parties. This is politics at its most crass.

This is a little surprising. For Labour, foreign policy is an obvious area on which to attack Cameron’s performance as prime minister. Since he entered Downing Street in 2010, Britain has fallen from being the fourth largest defence spender in the world to the sixth. Saudi Arabia now spends more on its military than the UK. While reduce expenditure reflects reduced ambition – an understandable position in a post-Iraq setting – the collapse in defence spending has reflected a more general decline in what Britain pays for its diplomatic service. And with fewer diplomats comes less diplomacy. Commentators have pointed to the failure of the Foreign and Commonwealth Office (FCO) to anticipate the Russian invasion of Ukraine. This is perhaps a little unfair – the FCO did not anticipate the Soviet invasion of Czechoslovakia in August 1968, a time when the Cold War was still being fought and Britain’s diplomatic service was at its strategic apogee – but it is the case that whether over Russia, Syria or Libya, Britain’s influence has waned. This is not to mention the measurable drop in Britain’s standing in Washington, let alone in the capitals of Europe and the institutions of the EU.

For the Conservatives, meanwhile, foreign policy is one area where Ed Miliband is truly untested. The Labour leader’s foreign policy is essentially an anti-policy – he, apparently, opposed the Iraq War ­– but it is hard to fathom where the post-Blair Labour party stands on matters all things foreign. Iraq, moreover, remains toxic for the Labour party. The legacy of Blair’s decision to commit British armed forces to the conflict still has the potential to rip the Labour movement apart. This is one reason why Labour today is wary of foreign policy becoming an election issue. But if the Conservatives were to make it one, it would be very uncomfortable for Miliband.

Both sides, then, are ‘weak’ on foreign policy. But this is not a sufficient reason for the issue to be excluded from the campaign. Blair made the point that close relations with the United States and the EU are two of the central pillars of British foreign policy. Both, it seems, are now crumbling. It is only right that we debate what will replace them.