Seize the moment at Wales TUC

The Wales TUC has a brilliant opportunity to reconnect the trade union movement with its main root in struggle for democracy. Deeside Trade Union Council are calling on delegates to recognise the full dangers to democracy and trade union influence of the growing rush to join the single currency.

The origin of the single currency idea in the profoundly centralist enterprise of the European Union, led by the Round Table Of Industrialists which drive the EU along, was reflected in Britain by the Tories signing of the Maastricht and Amsterdam Treaties without a referendum, and the refusal of the current government to go to the people on the Nice Treaty. In fact the only country to have a referendum on the single currency was Denmark and they rejected it, and the people of Ireland, concerned about their sovereignty and neutrality have similarly voted against Nice.

We now face the paradox of our new government wanting to see the trade unions launch the campaign for the euro through a referendum. This now raises the question in fact whether we have the right to contemplate voting away the national democratic powers of Britain at all. National self determination is surely not something trade unionists can have the option of removing with so much of our history here, and throughout the world bound up with the extension of the democratic and workplace franchise. Trade unionists as representatives of 26 million workers in Britain require a framework of democratically accountable and therefore removable political representatives in Parliaments, Assemblies and local councils in order that we can pursue our reform programmes, social policies and economic goals.

These objectives are ultimately bound up with the independence of a national government that must be able to set exchange and interest rates and utilise our reserves and manage public expenditure according to domestic needs without interference from, those we do not elect ourselves.

In recent history some trade unions who have been most disadvantaged by the drive to the euro and the effects of the Amsterdam Treaty have been the most passionate about early euro entry. Much of the enthusiasm has been based on the feeling that ‘Europe’ gave us more favourable employment rights than the Tories. All of the legislation in Europe has not prevented mass unemployment in the eurozone which is more than twice as high as here, a pensions crisis and a pulling apart of welfare services across the continent. Nor has it stopped the drive to privatisation of key industries and services demanded by the Treaties. Everything from railways, to air traffic control, to hospitals and soon education has to be privatised. The local infrastructures in agriculture like abattoirs, so essential in economically friendly policies and disease control also had to be broken up by EU directive. As a result the tragedy for our farming of not just foot and mouth disease but the set aside policy and high food prices.

Trade unions have failed to look properly at politically economic questions also. At heart we have lost sight of the fact that most of our domestic production, 80% in fact is domestically consumed and most of our foreign trade and investments and inward investments are with the world beyond the EU. A single currency would tie us to one part of the world only.

There has also been a reluctance by some trade unionists to look at the recent figures produced by the Office of National Statistics concerning manufacturing. Firstly, between 1992 and 1999 manufacturing employment in Britain rose by 0.5 percent, while in France it fell by 10.2 per cent and in Germany by a staggering 17.3 per cent. As an illustration, Vauxhalls (General Motors) has shed 11,000 jobs in Germany as a result of global over capacity. Giving up control of your exchange rates and interest rates as the single currency demands means a national government is only left with wages and unemployment levels to massage the economy in a dip. Furthermore, the key interest rates, the long term ones required by manufacturing investors, have always been lower in Britain than the rest of Europe, where lower short term interest rates partly reflect the lower levels of home ownership.

Overall British exports to the European Union have risen substantially despite the fall in the value of the euro. In the second quarter of 1999, British exports of goods and services were worth nearly £29,566 million. They were worth £33,713 million in the third quarter of 2000. Britain recorded a trade surplus with the eurozone in September 2000 for the second consecutive month, the first time this has been achieved since statistics were gathered in 1988. Kate Barker, Chief Economist at the CBI said that although profit margins of British manufacturers were being squeezed because of the collapsing euro, “Exports to the eurozone have held up much better than anyone expected.” European consumers will not stop wanting our products simply because we are outside the euro.

Inward investment continues to flood into Britain. In December 2000, the ONS reported that the quarter to September 2000 recorded a forty per cent increase over the year before creating record levels of inward investment of £311 billion. Interestingly investment into Britain from countries in the eurozone actually tripled in this period. In a huge poll undertaken recently for financiers Ernst and Young in France it was revealed that only 45% of inward investors in France believed membership of the euro gave business a competitive advantage. 56% of the companies surveyed incidentally said they intended to move investments out of France and favoured Britain as the alternative.

While staple and bedrock industries like textiles and clothing and metal working continue to be hit desperately hard and there is a clear lack of an industrial strategy to deal with this, high tech manufacturing industries in Britain, always less exposed to short term currency fluctuations, have boomed, electronics output for example has risen by almost half in the last three years. Between 1997 and September 2000, output in the overall engineering sector rose by 13 per cent, and in manufacturing as a whole by 7.9%. Some, notably the CBI, have said that the relative success of manufacturing means that we could even join the euro at a higher rate than their previous guesstimate of 2.70 DM. A dangerous prospect indeed, but an indication of the continued strength of the British economy outside the euro.

As Gordon Brown reminded us recently “mistaking exchange rate stability for stability across the economy” could be dangerous and we should remember that only 15% of British companies trade directly with the eurozone and would benefit from a fixed exchange rate.

This is in stark contrast to the economies within the eurozone which are exporting capital at a rate of knots. In the year to June 2000, there was a net outflow of capital from the European Union of £125 billion. Most of this went to the United States to purchase corporate assets.

Those who have argued that the strong pound is the problem, have got it partly back to front. The German mark strengthened against sterling for decades yet the German export markets expanded. No German industrialists at that time argued that they should abolish the mark.

For trade unionists faced with redundancies and the pain and suffering of poverty and uncertainty at work every day, statistics do not provide comfort and there is no consolation in the fact that Britain remains the fourth largest economy in the world. But the consequences of continuing to prepare for a euro which will demand an end to our ability to produce across a band of manufactured goods and an end to our ability as a nation to exercise democratic control over the key levers of the economy would clearly reverse our fortunes. In addition, manufacturing trade unions should take note that one of the many vetoes Britain lost in Nice was that over industrial policy.

Trade Unions above all others should not be fooled into think the euro offers milk and honey. We should be at the forefront of arguing for rebuilding Britain as a manufacturing based, independent nation trading fairly on the world market. If we don’t the fortunes of coal and steel and railways since our EU membership will merely be a foretaste of a more terrible decline.

Doug Nicholls is Secretary of Trade Unions Against the Single Currency, TASC, 301 The Argent Centre, 60 Frederick Street, Birmingham, B1 3HS, Tel: 0121 683 0283, Fax: 0121 683 0284, [email protected]

The euro: bad for trade unions is available from Bread Books, PO Box 1806, Coventry.

Please also contact in Wales Dominic MacAskill, Wales Trade Unions Against the Single Currency Convenor, c/o CCTUS, 131 Crwys Road, Cathays, Cardiff, CF24 4NH. 07779 140118, [email protected]



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