A Social Dimension For A Changing European Union – Social Europe Journal

The so-called Europe debate in Britain has been framed by Prime Minister David Cameron as a false choice between a free-trade, liberalised common market stripped of workplace rights or any social dimension, and exiting altogether. It’s not so much that he’s channelling his inner Thatcherite in arguing that there is ‘no such thing as society’, he’s just denying that the European Union should have any social role.

This is a profoundly unpalatable choice, not just for trade unionists. It is also very dangerous, giving confidence and political momentum to those on the right and to the right of his party (the ‘swivel-eyed loons’ inside the Conservative Party and the ‘Fruitcakes’ outside in UKIP).

Meanwhile it threatens to bleed whatever support still exists for the European Union among working people and ordinary voters already profoundly disaffected by the EU’s role in promoting austerity around Europe. And it worries those inward investors looking to site their operations in Britain as a bridge to the continent, and domestic potential investors interested in the long-term future of the UK economy.

On the one hand, leaving the EU would be disastrous economically. It would relegate the UK to an offshore tax haven even less capable of  rebalancing our economy away from over-reliance on the City towards a revitalised manufacturing and exporting industry. Potential manufacturers are putting investments on hold until they find out whether they will allow them access to an entire European market or not.

And on the other, repatriating control over the social dimension of Europe from Brussels to Westminster would make Britain’s economy less just and less efficient.

The TUC is particularly concerned that workplace rights, painstakingly negotiated over the last two decades since the single market was established, would be under threat.

There are those who argue that we don’t yet know what David Cameron would do if he got control of the Working Time Directive (although his silence about how he would reform it actually speaks volumes). On the contrary, I think we do. Because there was a time when the UK *did* have control over working time, rest breaks and holiday entitlements. It was before the Working Time Directive came into force.

When the UK Parliament last controlled working people’s working time, we had a free-for-all, with people’s working time dependent on whatever their employer wanted or what their union could negotiate through collective bargaining that then covered more people and workplaces. Why would the situation differ if the Directive was repatriated?

It’s not just rest breaks, paid holidays and work-life balance at threat. Equal rights for women, as well as part-time and temporary agency workers are at stake. Even the limited rights British workers have to find out what their employer is up to and to have a collective voice, depend on the European social dimension.

Measures requiring employers to respect people’s rights at work put a higher premium on those workers. Yes, they make them more expensive. But experience from manufacturing to the health service suggests that putting a higher value on workers’ labour encourages employers to invest in skills, equipment and processes, so that working time can be more productive.

That’s why the Netherlands, with some of the lowest working time in Europe, has some of the highest productivity. In an economy like the UK, where productivity has actually fallen since the global financial crisis struck in 2008, we need more value-added employment, rather than more low-skill, low-wage jobs.

And that vision, of investment in skills, in infrastructure and in manufacturing capital, and in productivity, is the answer to Europe’s economic and social woes, too. Unions and progressive politicians are arguing for a new approach that will restore Europe’s competitiveness, like the ETUC’s Social Compact. At the very least, we want to see the European Commission and European Central Bank to stop their current, damaging promotion of austerity and the undermining of collective bargaining (whether indirectly by promoting market freedoms over social rights, or directly, by attacking automatic indexation of wages, maintenance of minimum wages or sectoral wage bargaining mechanisms).

We would want the European authorities to go further – for example giving the ECB a mandate to promote growth and full employment as well as simply limit inflation, and a role as lender of last resort, including the issuance of Eurobonds. We want to see a significant injection of investment equivalent to at least 1% of GDP and possibly more, either co-ordinated by or even implemented by the Commission, as well as an effective Youth Guarantee of employment, training or education, and more investment in skills throughout working life, as well as boosting R&D. The initiative by 11 EU states to implement a Financial Transactions Tax is a useful step forward, as a revenue raising method, but also to reorient the financial sector away from speculation and short-termism, and put finance at the service of the real economy rather than vice versa.

This would represent the high road: increasing domestic demand, promoting trade by making things (and providing services) people can and want to buy, and delivering Governments with the budgets needed to defend and extend quality public services in a virtuous circle rather than the deathly downward economic spiral austerity is imposing.

Even the Chinese have abandoned the low-wage, low-skill route to economic success. A race to the bottom with the Bangladesh economy simply isn’t possible, let alone desirable: it’s a race we can’t and shouldn’t try to win.

This article is part of the EU Social Dimension expert sourcing project jointly organised by SEJ, the ETUC, IG Metall, the Hans Böckler Stiftung, the Friedrich-Ebert-Stiftung and Lasaire.

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