The latest coalition fracas occurred in December at the congress assembled to discuss ways to save the Euro. The 'veto' incident acted as a provocation, triggering the re-emergence of an old and deep-seated divide between the coalition partners.
Protectionism & Import Tariffs
In 1906, the UK saw the last of an endangered species of event - a Liberal Party gained a landslide majority. Campbell-Bannerman led a Liberal Party that included Asquith, Lloyd George and Churchill, to victory in an election that revolved around the issue of Tariffs.
It was a battle of free trade against protectionism - a debate over whether to tax imports in such a way as to make home based industry more competitive.
The Liberals' victory owed much to the fact that the Tories were split on the issue - thanks to Liberal Unionist leader & Tory ally Joe Chamberlain. Despite his barnstorming campaign, filled with slogans, attack posters and rallies, Chamberlain was defeated by the solidly delivered bland statistics of future Prime Minister HH Asquith (Marr, 2010).
The Situation at Present
Today the issue has risen again, due to a surge in the economic power of countries such as China and India - countries outside the scope of the employment laws of the European Union. Being on the outside allows these nations to undercut the production costs of those businesses within, due mostly to far lower pay, but also far less protections and insurance, for workers.
This is indeed a serious issue. In 2000 the Council of Europe gathered in Lisbon and agreed a mission statement, declaring that Europe must prepare for 'the transition to a competitive, dynamic and knowledge-based economy' - if its member states were to compete globally.
In the middle of this are the attempts to save the Euro. British Premier Mr Cameron & his negotiating team used a so-called 'veto' in order to gain assurances on protections for financial centres such as London - which considering that international finance is in peril and financial services make up a such a large part of British business, it was an acceptable negotiating position. However there have been accusation of blundering in the use of that negotiation position as a 'take it or leave it' proposition (Alexander, 2011), and suggestions that those tactics may have alienated the Deputy Premier & his Liberal Democrats (Tall, 2011).
This wedge created, Labour have been quick to try and capitalise; but shadow foreign secretary Mr Douglas Alexander's extended hand of alliance to Liberals is not so sure - Labour have plenty of their own internal debates about the wisdom of European integration (Stamp, 2011). This leaves us with the Tories against Europe, the Liberal Democrats for and Labour in the middle unable to decide which or why.
So what about our relationship with the European Union?
As one of the UK's biggest customer bases, it is of undeniable importance. The figure thrown around, that 3 million British jobs depend on European customers, reflects the extent to which the UK depends upon the common market.
And free trade is also undeniably good, enabling innovation and economic freedom, but only when it applies to all elements of the means of production. That means resources, goods, capital and labour. When an imbalance of power occurs, in the favour of capital as accused now or labour as it was accused in the 60s & 70s, it creates conditions ripe for exploitation.
A realistic look at international politics shows the difficulties involved in pursuing such consistency on a global scale through the UN - and so protectionists will claim setting up barriers and intervening through import taxation, even reducing employee protections, as acts not only necessitated by the production-power of cheap labour nations like China, but a pragmatic solution.
Yet that comes across as a negative & defeatist policy.
Free trade - especially when coupled with positive liberty inducing labour laws - is an immensely positive force; the problems we encounter are the results of the inconsistency between the application of those laws across jurisdictions.
The Government Position
The government's actions have been split. The coordinated Tory driven policies - combining the eurosceptic favoured repatriation of social & employment laws and the 'veto' demands that protection of financial centres be ensured, with homefront clashes over pensions - suggest a treasury strategy designed to ease the burden on businesses by drastically rolling back employee protections.
A particular example are the proposals for virtually eliminating unfair dismissal, while increasing the window within which employees can be layed off without payouts (Landau & Snowden, 2011).
More positive were the proposals of the coalition's junior partner Liberal Democrats - a three part strategy for dealing with the 'irresponsible & unjustifiable' gap in pay between the lowest paid workers and the top executives (BBC, 2011). Yet once more this could be a situation where Mr Clegg gets to announce a positive policy, that is simply undermined later by a counter policy from the Tories.
In this case the increasing the power in the hands of employees on matters of executive pay or bonuses may matter very little if those employees are busy working two or three jobs - something that more & more people may need to do to make ends meet, if labour costs are forced down.
Conclusions
The reoccurance of this debate is unsurprising in the current climate. As former Italian Premier & President of the European Commission Romano Prodi (1975) described, protection can be very useful for dragging organisations, market sectors or even an entire economy upwards.
However, positive solutions are needed if the hard earned reforms to the entire nation's welfare are to be defended from surrender to the crisis of the day.
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References:
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+ Andrew Marr's 'The Making of Modern Britain'; Macmillan 2009.
+ Douglas Alexander's 'Labour will make a big, open offer to the Lib Dems on Europe'; in New Statesman; 12 December 2011.
+ Nicholas Watt & Helene Mulholland's 'David Cameron to face down Tory Eurosceptics over new EU treaty'; in The Guardian; 6 December 2011.
+ Stephen Tall's '"An inept negotiating strategy placed in the hands of an inexperienced prime minister" – behind the scenes of Cameron's "veto"'; in Liberal Democrat Voice; 13 December 2011.
+ Gavin Stamp's 'Tory MPs seeking Labour dialogue over "EU overhaul"'; on the BBC; 7 September 2011.
+ Philip Landau & Graham Snowdon's 'Employment law: what the changes could mean in the workplace'; in The Guardian; 23 November 2011.
+ BBC's 'We will "get tough" on excessive boardroom pay - Clegg'; 4 December 2011.
+ Romano Prodi's 'Italy'; in Raymond Vernon's 'Big business and the state: changing relations in Western Europe'; Harvard, 1975.
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