Safeguarding British interests? Is that really why David Cameron vetoed EU treaty change?

David Cameron had always promised to safeguard British interests when it came to EU treaty change. Most notably, that meant vetoing any deal that would require the UK to cede further sovereignty to the EU or a tax on financial transactions (a Tobin or ‘Robin Hood’ tax). Despite the significance of the proposed treaty change for the strength and viability of the Eurozone, something undoubtedly in Britain’s interest, the Prime Minister was adamant from the outset that both would be deal breakers where he was not willing to concede.

Consequently, and to the delight of Europsceptics, Cameron vetoed EU treaty change. Instead, the remaining EU states (minus the UK) are now likely to sign up to an ‘inter-governmental accord’ – essentially an agreement without the robustness offered by a treaty.

Cameron maintained that safeguarding British interests would be his priority in any negotiations. And in his capacity as Prime Minister, it’s difficult to argue against that approach. But it’s debatable if British interests were wholly behind his decision to veto EU treaty change. Given Britain’s relative insularity and aversion to supranationalism, surrendering further sovereignty to the EU would always be a thorny issue to say the least. Furthermore, given this aversion, any treaty change would have been met with significant opposition from Conservative backbenchers in Parliament.

While he surely realised the significance for the Eurozone, had Cameron not used his veto he was faced with the wrath of his own party. This isn’t exactly a British interest but had he decided otherwise, Cameron would have returned to a hostile reception from his own backbenchers. Instead, Cameron has returned a hero to many in the Conservative party as he surely knew he would. The Eurosceptics have celebrated Cameron using his veto with many hoping this may even prefigure a shift in Britain’s relationship with the EU and a possible referendum. Cameron may not be a popular figure amongst EU member states but he has avoided a political backlash that could have done much damage to his leadership and political career.

While many would disagree, Cameron may have perceived his decision to use his veto as a reflection of his fellow MPs’ views – a valid perception given they are elected representatives – and as a result one of British interests. But the extent to which his opposition to a Tobin tax can be considered as safeguarding British interests is also questionable.

Cameron, George Osborne et al have argued that the financial sector plays such a significant role in the UK economy that a Tobin tax would be to the detriment of the UK. They argue it would compel the financial sector to relocate abroad and risk the not-inconsiderable tax revenue and jobs created by the sector. Cameron therefore unashamedly declared his intention to protect the City of London during negotiations on EU treaty change.

As I wrote in a previous post on the proposed UK banking reform, measures that might not please the City of London would not lead to a mass exodus of the financial sector from the UK. Were a Tobin tax to be introduced within the Eurozone, indeed some might make the move elsewhere. Yet given this would be applicable to the entire Eurozone, this would surely mitigate that risk. The government’s previous argument of alienating the City of London with a UK-only Tobin tax is therefore less applicable than it previously was.

If too big to fail isn’t fitting, too big to antagonise certainly seems appropriate when considering the government’s stance towards the financial sector. Cameron’s consideration of the financial sector when discussing the safeguarding of British interests is telling as in this instance he sees the two as inseparable. According to the Financial Times, hedge fund managers are now the biggest donors to the Conservative party. Coincidence that their interests are perceived by Cameron as one of national interest? I think not.

Were a Tobin tax to be introduced, it’s likely they’d be some annoyance in the city. But this would hardly be to the extent that averting the tax could be considered to safeguard British interests.

While many outside his party may disagree with his decision, Cameron arguably used his veto to safeguard what he perceived to be British interests. However, he certainly safeguarded his leadership and the interests of the City of London along the way. And while he might defend it as otherwise, Cameron’s decision to use his veto wasn’t exclusively based on safeguarding British interests per se.

Following Cameron’s veto, Britain is now faced with isolation and a loss of influence within the EU. The inter-governmental accord isn’t as rigorous as treaty change but it is nonetheless a forum that the UK will not be party to. Furthermore, this could be a move Cameron comes to regret, especially if it ends up threatening the same British interests he claimed to be protecting by using his veto.

The public sector national strike - why it was about more than just pension reforms

The UK-wide public sector strike on 30 November was primarily over the government’s proposed reforms to public sector pensions. Essentially, the government wants public sector workers to work for longer, pay more in pension contributions but receive a reduced pension based on a career average salary rather than their salary at the time of retirement. But the strike wasn’t just about the trade unions and their members’ opposition to pension reform. It was just as much about articulating the frustrations of a public sector that has been demonised by the coalition government and the right-wing media.

The strike also held significance for politicians and unions. For politicians, this wasn’t limited to the government as the strike represented a dilemma for the Labour Party in its unwillingness to support or condemn strike action. And for the unions, the biggest strike action since the general strike of 1926 bolstered their legitimacy, despite claims from the government that they failed to represent members in calling for strike action.

The proposed pension reforms are based on the recommendations of the Independent Public Service Pensions Commission, the Commission led by former Labour MP John Hutton (now Lord Hutton). John Hutton’s tenure as Secretary of State of Work and Pensions would suggest him to be suitably experienced to chair the Commission. Yet it’s hard to ignore the fact that he was invited to do so to give the proposals some credence as a Labour politician; effectively doing the bidding of the Conservative-led coalition government.

Regardless of the political party or persuasion of the Chair of the Commission, the government clearly sought reform in line with the Commission’s eventual recommendations. Admittedly reform might be necessary but reform of this nature arguably isn’t.

With the population living longer, there’s bound to be a gap between pension contributions and pension payments. Therefore increased contributions in some form are necessary to bridge the gap without overly relying on the taxpayer to achieve this. On that basis, I don’t oppose a reasonable increase in the pension age and/or in pension contributions (although it should be noted that this was actually addressed in pension reforms by the Labour government in 2007 which were agreed with the unions). But an overall reduced pension, particularly for low paid public sector workers, is simply unnecessary and unfair.

The government has defended the proposed reforms as necessary and said that public sector workers earning less than £15,000 and those close to retirement will see no change to their pension contributions. That still leaves millions of public sector workers that would be adversely affected.

While the unions may appear to take a hard line approach in public, privately, the ‘more for less’ approach is surely the sticking point for them too. Furthermore, as Dave Prentis, General Secretary of UNISON wrote in the New Statesmen, many believe the reforms are merely a way to generate extra money to put towards the deficit. It’s a cynical but hardly far-fetched notion, particularly given the coalition government’s perception and targeting of the public sector.

The coalition government (most notably the Conservative MPs within it) has sought to vilify the public sector from the outset and it has been subject to much unwarranted opprobrium in what appears to be ideologically driven disdain. Ironically, taking this stance towards the financial sector would be much more appropriate in reflecting the public mood – an observation clearly lost on the government.

Nowhere in the public sector has been immune from austerity measures, including redundancies. Announcements of the latter have been almost celebrated by the government which merely serves to put the boot in and illustrate the government’s disdain for the public sector.

Many public sector workers would acknowledge that there is inefficiency and waste in the public sector that is just as frustrating for them as it is for their fellow taxpayers in the private sector. But amidst the inefficiencies and need for austerity measures remains the valuable contribution many public sector workers provide. Nonetheless, the government continues in its contempt for the public sector while devaluing the valuable work of teachers, medical professionals and other public servants.

The coalition government and the ring-wing media would have the public believe the public sector is getting an easy ride while the private sector bears the pain of austerity. However, there’s clearly no truth in that whatsoever.

The government would have hoped that the strike would further alienate the public in any support for the public sector and the unions. Nonetheless, a BBC survey commissioned prior to the strike suggested 61% of people empathised with the public sector workers taking strike action. It’s not overwhelming, but it’s certainly a measure of support and perhaps the government will have to rethink its approach towards the public sector if it seeks to capture the public mood.

In another political implication of the strike, Ed Miliband again missed the boat in refusing to support or condemn strike action.

Miliband’s stance has achieved little beyond causing frustration amongst the left within the Labour Party and its traditional supporters. In seeking to portray Labour as a centrist party and appeal to the electorate that once supported New Labour, Miliband has further attempted to distance himself from the left and the unions (without actually opposing the principles behind the strike). However, he hasn’t done it with much aplomb and it’s yet to pay dividends for him or the Labour Party. It’s also bound to frustrate the unions who continue to account for the majority of the Labour Party’s donations.

In the build up to the strike, the government continually attempted to undermine how representative strike action was of union members’ desires. The government was at pains to bring to the attention of the public the relatively low turnout of some of the ballots for strike action – perhaps prefiguring attempts to introduce a minimum turnout when unions ballot members on industrial action.

Consequently, poor turnout for the strike itself would have undermined the unions’ legitimacy in calling for strike action. It would also have provided the government with an opportunity to challenge how representative the unions actually are of members’ desires.

Speaking of turnout, it’s worth noting that in the 2010 general election, the Conservative Party, the most vocal partner of the coalition government in their anti-union sentiments, only gained 36% of the vote. And that was in an election that saw 65% turnout. Therefore only 23% of the electorate actually voted for the Conservative Party – hardly basis to pontificate about the legitimacy of strike action based on the results and turnout of the ballot for strike action.

The number of public sector workers that decided to strike certainly suggests the unions have the support of their members. The government must surely now realise that the anger and frustration shown towards the proposed pension reforms is palpable and isn’t down to rabble-rousing by the unions or limited to pockets of the public sector. Going forward, the unions can have confidence in their legitimacy in representing members’ wishes in negotiations on pension reforms and the government should be wary of assuming otherwise. Indeed, union leaders are surely relieved that the strike action had the response it did.

During Prime Minster’s Questions on the day of the strike, David Cameron referred to the strike as “a damp squib”, further example of the government’s arrogance and lack of empathy for the public sector. Yet the extent of the strike action would certainly suggest otherwise. According to the BBC, 29 unions backed the strike which resulted in the closure of 18,342 schools. That’s hardly a damp squib.

It’s difficult to gauge how those outside the public sector perceived the strike action. There has been some support from individuals that empathise with the grievances that led to the strike. Furthermore, the number of public sector workers that decided to strike, many for the first time, has perhaps shown that they are genuinely aggrieved and justified in their opposition.

Only a day before the strike, the Chancellor’s Autumn Statement announced the current two-year pay freeze for public sector pay would be followed by a 1% cap on pay increases – essentially a pay cut when considered against inflation. Further redundancies in the public sector were also announced.

Public sector workers don’t expect to be exempt from shouldering necessary austerity measures alongside the rest of the country and it’s clear that they aren’t. Conversely, the government is less vocal about those within the Square Mile doing the same. David Cameron claims “we’re all in this together” but it seems some are in it more than others.

The national strike may have been about public sector workers’ opposition to pension reforms but it voiced their wider frustrations in being targeted and demonised by the coalition government. The strike brought the frustrations of public sector workers to the awareness of the wider public and presented an opportunity to reflect on the valuable role that they contribute to the state and wider British society. Alas, while the government and the right-wing media maintain their rhetoric, many will remain vilifying a sector that continues to work for their benefit.