From the TUC

Why I want to see the UK economy getting stronger and fairer in the EU

22 May 2016, by Guest in Economics

This June, our country will make one of the biggest decisions it has faced in a generation.

In campaigning on this issue the first thing I hear on the doorstep when discussing the EU referendum is that the level of debate so far has been very negative on both sides and that what people want are the facts and real vision from their politicians.

I think they are right. The referendum resulted from the splits in the Conservative Party and their fear of UKIP, and as a result the debate has degenerated into the worst forms of negativity and brought out the worst in Westminster politics.

It’s time to turn this debate around, drive out the politics of despair and offer a vision for Britain and Europe, one where we protect workers’ rights, tackle tax avoidance, get to grips with climate change and protect our industries like steel.

We need a vision of the UK in Europe based on hope and solidarity.

With global economic uncertainties combined with this government’s economic incompetence, be it Budgets they can’t make add up or fiscal targets they can’t achieve, the risk of an immediate economic fallout from Brexit is severe.

Last week, the IMF said that in the event of a Brexit:

“plans for additional medium-term budget consolidation may need to be developed to offset the longer-run adverse fiscal effects”

In plain English, if we have a Tory Brexit then we have the likelihood of more Tory cuts to come.

George Osborne has already created a £4.8bn black hole in the nation’s finances. Thanks to George Osborne’s recovery built on sand, our economy today simply is not strong enough to withstand the kind of adverse shock Brexit could create.

With the economy pushed into recession by Brexit, as the Bank of England predicts, the immediate future could be grim. We all know what that would mean under this government – More austerity cuts just to meet their inflexible and flawed fiscal targets.

Which is why I’m keen to present a positive economic case, and give an alternative vision of our economy in Europe. Instead of the politics of fear and division from many politicians in both sides of this campaign, we need to offer voters a politics of hope.

We know that there are pressing issues facing us in the UK that can only be tackled effectively and justly through international co-operation.

Creating a prosperous economy where the prosperity is shared fairly by all. Ensuring basic rights at work, wherever one chooses to work; tackling climate change.

The EU, with all its imperfections, provides us with that forum not just for securing that international co-operation but also translating it into effective action.

One of the cornerstones of a prosperous and fair economy is a fair taxation system.

The shocking scale of tax evasion and avoidance has been exposed by the recent Panama leaks.

Conservative MEPs have voted, again and again, against measures at the EU level to clamp down on obscene levels of tax avoidance.

When bankers’ bonuses were threatened with a clampdown by the EU, George Osborne despatched a very expensive army of lawyers to fight against it the bankers. Luckily he lost.

In contrast our MEPs in Labour and allies in other progressive parties across Europe have been fighting hard in the European Parliament for real action against those, whether the super-rich or major multinationals, who try and duck their responsibilities to society.

They helped draw up EU-wide measures brought in in the aftermath of the “Lux Leaks” scandal, and pushed for full, public, country-by-country reporting of multinational companies accounts, right across the EU.

Of course there’s a lot we can do on tax evasion and avoidance here at home.

But because avoiders exploit the differences in different tax systems, the most effective action is collective action. That’s why EU-wide action on evasion and avoidance matters.

Part of our vision is to see fairness in tax systems not just here, but across the whole continent. Working people everywhere suffer when those who could and should pay their taxes choose not to.

We all want a better, fairer economy that works in the interests of the great majority. Collaboration across borders on employment rights, industrial policy and investment is an essential part of achieving that.

The EU currently provides huge levels of funding to businesses, universities, schools and local authorities in Britain – and at preferential rates.

The EU’s European Investment Bank is lending money to organisations at a cheaper rate than the UK Government can. This is because the Bank has a Triple A+ credit rating, whilst the George Osborne as Chancellor has seen the UK’s credit rating downgraded.

Last year alone the UK received £5.6 billion from the EIB to help to regenerate communities and invest in infrastructure up and down the country.

The Conservatives have consistently blocked a National Investment Bank for Britain that might be able to supply the investment our communities and industries, particularly outside of London, so urgently need.

So with a Chancellor committed to actually cutting investment, that EIB funding represents a lifeline to our industries and communities.

And when faced with the dumping of Chinese steel onto European markets at prices that undercut UK steelworkers it was the EU not the UK government that proposed new tariffs on Chinese steel.

Instead David Cameron’s party have been the ones trying to block it from happening.

The EU proposed a workable, solid, continent-wide action plan on steel, before the crisis well and truly blew up last year. This was blocked by the UK government.

I want to stand up for the rights of workers and communities in Europe, alongside our EU partners.

We’ll take on the arguments about State Aid where we have to. Too many times EU rules are falsely used as an excuse to block progressive measures. Too often the Treasury have used State Aid as an excuse for their own preference for inaction.

Other EU countries don’t behave like this, whether it is the French government supporting their steel industry, or the German government supporting theirs.

But we believe in partnership, and learning from each other. So I’ll be visiting Germany next month to see how they are driving ahead with a 21st century energy policy, with local communities taking ownership of renewable electricity generation.

Germany has set an ambitious target with 100% renewable energy production by 2050. Local ownership of renewables, with the benefits flowing directly back to communities, is a critical part of the plan to get there.

Local ownership is happening already, so far on a smaller scale, in Britain. Visionary councils like Preston in Lancashire are starting to think creatively about how their communities can make better and fairer use of the wealth they produce.

In Preston, this has meant looking to support workers’ co-operatives and working with major employers to support the local economy through better focused procurement. And it’s now being backed by the EU, with Preston Council winning funding to support a network of forward-thinking local authorities across the continent.

One of the fundamental rights the EU protects for its citizens is freedom of movement. I think this is critical. The right of working people to live and work where they choose is a hard-won gain of the labour movement.

Last Wednesday morning the former Secretary of State for Work and Pension, Ian Duncan Smith, claimed that EU immigration was hitting the low paid almost as though the previous six years of his time in office had not taken place at all.

He tried to claim he has the interests of the most vulnerable in our society at heart while he campaigns for Brexit – I don’t believe him, and I don’t think many people will be fooled by his crocodile tears and creative compassion.

This is the Secretary of State who supported cuts to the disabled, cuts to in-work benefits and introduced the bedroom tax. It’s not migrants that have been responsible for the attacks on the poorest and most vulnerable in our society. It has been Iain Duncan Smith himself.

By Thursday morning a report from the London School of Economics came out to completely destroy his argument. The researchers stated that the fall in wages since 2008 was due to the global financial crisis and subsequent recession.

It blew apart the anti-migrant arguments used by some of those campaigning for Brexit.

The stress on the NHS and our school system is not due to increased migration, it is due to austerity. It is this government who have enacted a top down reorganisation of our NHS not Bulgarian nurses. It is their cuts to our schools budget, not Romanian teachers in our schools.

It is not the fault of Polish fruit pickers or Latvian care workers that house-building is at its lowest peacetime rate since the 1920s – it’s the government’s consistent failure to build more homes.

We don’t blame the people who work in our public services, and who make such a contribution to our economy and society, for the state of those public services.

We won’t give an inch to the anti-migrant rubbish of some of those campaigning for Brexit. Blame for the state of our public services, rising inequality, and a shaky economy should land squarely at the door of the people responsible – Number 10 Downing Street.

The Tories may have been captured by UKIP, but we cannot let our country be captured by them too.

The honest, straight forward truth is that our country needs immigration and that rather than costing us money most migrants contribute more than they take. HMRC last week produced figures showing that recently arrived EEA nationals paid £3 billion in taxes, yet claimed only £0.5 billion in benefits.

It helps particular sections of our economy too, like construction. This is a vital part of our economy that should be driving ahead if we are to tackle the housing crisis.

Oxford Economics has said that around 60% of construction firms have experienced hiring shortages of skilled labour in the last 12 months, compared with only 4% in 2013.

One survey by the Royal Institute of Chartered Surveyors found that 27,000 construction projects could be impacted by the current shortage of workers by 2019, and that 66% of firms have turned work away.

Only last week we saw that the construction sector is still struggling to recover from the 2008 downturn. A Brexit could make this worse.

Obviously some local communities are affected by sudden increases locally in immigration. I should know as the MP for Heathrow airport.

If you have a rapid increase in immigration locally you need an injection in funding. Instead many councils are finding themselves with massive spending cuts. That is why I’m advocating a Rapid Migration Fund to mitigate the overspills of immigration that can hit local services badly.

We should stand foursquare for freedom of movement in Europe. The right to travel and seek employment is a fundamental one. This is a Europe of freedom and hope, not barbed wire fences and fear.

It is the next generation who will most benefit from a closer relationship between the EU and our own country.

People of my generation have a very different view of Europe than those of our children. Today many young people regularly contemplate not just travelling around Europe to broaden their horizons, but also to work and gain skills.

Over 15,000 UK students spent up to a year in another European country during the 2013-14 academic year, up 115% since 2007. And who can blame them with the prospect of spending more than £50,000 in three years in the UK, enrolling in other European institutions offers a much cheaper alternative?

And it is a two-way street. EU students at UK universities generate £3.7bn for the UK economy and support over 34,000 jobs in all corners of the country, according to analysis from Universities UK.

It’s not just students but also British workers with 2 million UK nationals living and working in the EU. According to the House of Commons Library by, 2025 half a million people could have emigrated from Britain to the EU.

It used to be the Auf Wiedersehen, Pet generation of UK construction workers looking for work in the EU, but now young computer programmers and students will look to work in the EU to build up their skills base. Those people will then return to the UK and have a huge benefit to our economy.

An economy fit for the twenty first century also has to be a greener economy. And to tackle climate change effectively, it’s important for us to stay in the EU.

One pressing example that has hit the headlines in the recent mayoral elections is air pollution. In the 1970s the UK was known as the dirty man of Europe but the EU stepped in and set strong EU-wide targets on air pollution and nitrogen dioxide levels.

My constituency includes Heathrow Airport with some of the worst polluted air in our country, so I know how big of a problem air pollution is for Londoners. To the shame of this government we still continue to breach these targets today.

The Conservatives have such a bad record on air pollution that environmental law firm Client Earth have taken the Government to court for breaching EU targets – a great example of the EU holding this Government to account for the benefit of our citizens.

Now, of course an organisation representing 28 members is not perfect. Far from it. The EU is in need of a thoroughgoing transformation.

That is why I and the Labour Party are campaigning to remain but reform the EU.

I can well understand concerns on the left, following the scenes of the people in Greece voting by large majorities in referendums for clemency from EU-imposed cuts by the Troika. It has sent shock waves across the anti-austerity movement in Europe.

We can, and must, do better now and in the future. Right across Europe from Germany to Greece, and from Italy to Spain, working people are seriously questioning the European Union’s institutions.

Many of these institutions hold meetings behind closed doors, closed off from the struggles of everyday life.

But if we think we protect our sovereignty by pretending these meetings won’t still be taking place if we leave, or that they still won’t affect us then we are only kidding ourselves. As under a ToryBrexit these meetings will simply be replaced by trade deals, which we all know will also be negotiated from behind closed doors.

Right now in the EU our government are voting against tax avoidance measures and blocking measures to protect steelworkers’ jobs when they think we aren’t watching. So we won’t be helping our democracy by continuing, as George Osborne wishes, for business as usual.

I want to see a more open and transparent EU by ending the secrecy that happens at the European Council and Ecofin conferences. I want the clear light of day to act as a detergent that will rid the EU of some of its less democratic structures.

And now more than at any other time in recent years there’s a growing coalition across Europe who share this desire.

Rather than leaving we should instead stay to make this positive case, and those of us who truly want to strengthen our sovereignty will be passing up this huge chance by voting to leave next month.

The problem for our country isn’t Europe.

Scratch the surface in most places and you’ll find the problem is this Conservative government.

And we cannot let them ruin it for the rest of us, just because there is a civil war in the Tory party.

We need Labour and its allies across Europe to fight for the reforms that will benefit working people right across the continent.

We will use the levers available in the EU to protect our steel industry from cheap Chinese steel.

We will instruct our MEPs to vote in the European parliament on measures to help clamp down on tax avoidance by multinationals and the super-rich.

Labour would use the EU to give power to the British people and stand up to bullying multinationals. Not cut us off and expose us to its very worst.

That is why I will be campaigning for the UK to be stronger in the European Union under a Labour government.