BLAIR’S BRITAIN, 1997–2007
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just a common market in which we trade but a common political space in
which we live as citizens. . .
I believe in Europe as a political project. I believe in Europe with a
strong and caring social dimension. I would never accept a Europe that was
simply an economic market.25
But the problem was that if there was to be any chance of moving public
opinion, the positive European message needed driving home in a more
consistent and remorseless manner than it was. Moreover, at crunch
times, Blair sometimes preferred to avoid taking risks with the British
people on Europe and to adopt somewhat defensive positions. This was
no more clearly demonstrated than in his domestic stance towards the
Constitutional Treaty when, though he certainly made the case for the
need of treaty reform post-enlargement, the dominant theme of many of
his and his ministers pronouncements was the defence of British ‘red
lines’ on issues such as defence, taxation and social security.
Specific policy failures
There were two main specific EU policy failures for Blair: on the euro and
on the linked issues of CAP and budgetary reform.
In 1997 Labour adopted a cautious position on the euro. Unlike the
Conservatives, who rejected euro entry in principle (the principle being
preservation of national sovereignty), Labour stated that it would be
prepared to enter if it was shown to be clearly in the country’s economic
25 PM speech to the European Parliament. Accessed on 10 May 2007 from the No. 10 website
at: www. number-10.gov.uk/output/Page7714.asp.
interests. However, as was noted above, so as to deflect possible political
damage arising from this open stance, Labour’s 1997 election manifesto
promised a referendum if a Labour government recommended entry to
the new single currency system. In his early years of office Blair certainly
favoured Britain adopting the single currency and entering the
Eurozone. The absence of any referendum on the issue therefore can be
counted as a personal failure for him, although not necessarily for the
government as a whole. Three factors explain the absence of a referendum on the euro, each one of which was probably powerful enough in its
own right.
The first factor arose from the conceding in the early months of office
of the control of economic policy to Gordon Brown and the Treasury.
Brown himself was initially open-minded on the issue, but quickly
moved to oppose British membership – seemingly persuaded by longstanding Treasury doubts and the firm scepticism of his main personal
economic adviser, Ed Balls. What amounted to virtually a compromise
between the ‘pro’ and ‘anti’ camps was reached when a major Treasury
enquiry into the implications of euro membership for Britain was
launched in the autumn of 1997, but long before the results of the
enquiry were announced it was clear that the ‘antis’ had gained the upper
hand and that no recommendation to join the currency would be forthcoming. When the results of the enquiry were published, in the summer
of 2003, Britain was deemed to have clearly ‘passed’ just one of the five
(very generally couched and open to different interpretations) economic
tests of membership. Britain’s performance in relation to these tests was
to be kept under review, but in practice the Treasury had lain down its
sceptical position.
The second factor was that, quite simply, in most key respects the
British economy performed better than the Eurozone throughout the
Blair period, and therefore the economic case for entry was weakened.
The expressed concerns of euro membership supporters that Britain
would be economically disadvantaged by non-membership – with the
likelihood of lower growth, higher unemployment, higher inflation, and
diversion of inward investment – proved to be unfounded. For example,
growth in Britain averaged just under 3%, as compared with under 2%
in the Eurozone, whilst unemployment levels were much lower than
the 10% averaged by the most comparable with Britain Eurozone
economies, France and Germany.
The third factor was political calculations of the implications for future
electoral success of holding a referendum. A failed referendum, which was
seen by most observers from an early stage as being the most likely outcome,
could have been electorally damaging in that it could have been interpreted
as a government not in control of events, it would show that the government could be defeated, and it would have buoyed the Conservatives.
On CAP and budgetary reform, Britain maintained its long-standing
strategy of keeping the issues linked. This was partly because of the
continuing prominent position of CAP spending in the EU’s budget – it
has accounted for around 45% in recent years – and partly because EU
budgetary debates habitually result in other member states calling for
the abolition of the UK rebate which Mrs Thatcher secured in 1984.
Domestically, Blair could not be seen to concede on the demands that
Britain give up its rebate without securing agreement to the reform of CAP.
During the Blair years, the key times during which these issues were
most prominently on the agenda were in the two periods during which
financial perspectives – the medium-term financial planning instruments within which all of the EU’s annual budgets are framed – were
being considered and negotiated. The first of these financial perspectives,
covering the years 2000–06, did not result in too much disputation
between the member states, with Britain not over-pressing the need for
cuts in CAP expenditure and the other member states not over-focusing
on the UK rebate. The contents of the second financial perspective,
however, covering 2007–13, were much more strongly contested, not least
because of the financial support that would have to be given to the new
member states. On the CAP content of the budget, Blair, at a time when
he was anxious not to alienate other EU governments because of the
looming war in Iraq, was outflanked by Chirac and Schroeder in late 2002
when they pushed an agreement through the European Council that stipulated that CAP spending in the EU-15 states would not be cut during
the next financial perspective. As for the UK rebate, Blair was highly
desirous – for political prestige reasons – to reach a final agreement on the
financial perspective during the British presidency in the second half of
2005, so to help achieve this he agreed to a modest cut in the rebate at the
December 2005 European Council meeting. The final agreement on the
2006–13 financial perspective meant that Blair agreed to give up approximately 20% of the British rebate without securing a commitment to the
reform of CAP or without a reduction in CAP spending. He did secure an
agreement to a Commission review of all EU spending, including on CAP
and the British rebate, that would be completed by 2008/9, but that gave
no guarantees of either proposed CAP reform or the implementation by
the member states of Commission proposals for reform.
Europeanisation and Constitutional Change
Most of the focus on Britain’s relationship with the EU under Blair
understandably is concerned with high-level and direct EU–UK matters.
Our discussion above reflects this focus. But many other, lower-level and
less direct, policy, institutional, and process-related changes occurred in
Britain under Blair with implications for Britain’s relations with the EU.
In this section we consider some of the changes that have occurred as a
result of ‘Europeanisation’ and constitutional change.
Europeanisation
Recent research highlights a trend of deepening relations between Britain
and the EU in relation to policy, institutions and political processes.
The trend, which is commonly described as constituting a process of
Europeanisation, did not begin in 1997, but it continued and in many
respects was accelerated under Blair.
In relation to policy, three examples may be taken to briefly illustrate
how after 1997 the Europeanisation of policy content, structures and
style was advanced. In the case of environmental policy, the advancement was located within a greater, partly EU-driven, environmental
awareness in which, amongst other things, there was a shift towards
more source-based emission controls and a more explicit acceptance by
the UK government of EU-specified guiding principles and objectives,
such as precaution, prevention and sustainability. Paralleling this greater
acceptance of EU-level initiatives, Britain became more active in
promoting its own ideas at the EU level, to such an extent that it is
now ‘found exporting domestic environmental ideas to Brussels with
a passion that would have been unimaginable even 15 years ago. Britain
is no longer perceived as the Dirty Man of Europe.’26 In the case of
competition policy, under the Conservatives British policy had generally been viewed in EU circles as being incompatible with the EU model.
The Conservative governments had, however, resisted any significant changes.27 The Labour government’s 1988 Competition Act,
though partly based on US designs, brought British practices much
more into line with those of the EU. The Act signalled a shift away from
26 Jordan, ‘Environmental Policy’, in Bache and Jordan (eds), The Europeanization of British
Politics, p. 237.
27 Michelle Cini, ‘Competition Policy’, in Bache and Jordan (eds), The Europeanization of
British Politics, pp. 216–30.
pragmatism and a case-by-case approach to competition issues to an
outright banning of all cartels and abuses by monopolies. In the case of
regional policy, there was a greater acceptance after 1997 of some of the
EU-level guiding principles. In particular, the EU’s partnership requirement was embraced by Labour and some of the EU’s experiments with
bottom-up decision-making influenced domestic regeneration and
neighbourhood programmes.28 In short as regards the Europeanisation
of policies, in a number of areas the ‘fit’ between domestic and EU policies improved after 1997 – partly as a result of changes to domestic practices, but also through Britain projecting its preferences more effectively
onto the EU.
In terms of institutional change, the changes in Whitehall that took
place in how EU affairs were handled under the Blair government have
been described as a ‘quiet revolution’.29 The changes included the centralising thrust described above, but also took the form of attempts to shift
organisational culture. So, there was a ‘mainstreaming’ of Europe within
every department and a Blair-instigated networking offensive by ministers and officials aimed at developing better bilateral relations with counterparts in other member states. Beyond Whitehall, there were also
ongoing Europeanisation effects at the subnational level with, for
example, Regional Development Agencies (RDAs) created in England
that were built on policy networks and administrative boundaries that
were either instigated or strengthened by the requirements of the EU’s
structural funds.
As for processes, the post-1997 years saw a consolidation, and in some
respects a gathering of pace, of informal processes of exchange between a
wide range of interest groups on the one hand and EU-level institutions
on the other – a process stimulated in part by the European Commission
having become an increasingly active promoter of the third sector, both
transnationally and domestically.30 UK environmental and business
interests, for example, reoriented an increasing amount of their representational effort towards the EU and restructured internally to facilitate
more differentiated approaches to lobbying.31 And despite there being a
28 Ian Bache, Europeanization and Multi-level Governance: Cohesion Policy in the European
Union and Britain (New York: Rowman and Littlefield, forthcoming).
29 Bulmer and Burch, ‘Central Government’, p. 37.
30 Rachael Chapman, ‘The Third Sector’, in Bache and Jordan, The Europeanization of
British Politics, pp. 168–86.
31 Jenny Fairbrass, ‘Organized Interests’, in Bache and Jordan , The Europeanization of
British Politics, pp. 135–51.
Labour government in power, trade unions and local authorities continued treading the path to Brussels first worn in the face of restrictive
Thatcherite policies of the 1980s.32
In short, after 1997 Britain’s politicians, officials and organised interests became more deeply enmeshed in a wide range of territorially overarching policy networks, which resulted in Britain’s relationship with
the EU becoming increasingly interdependent and the boundaries
between domestic and international politics becoming increasingly
blurred.
The impact of constitutional change
A number of constitutional changes introduced under the Blair governments have brought Britain closer to continental systems of governance
and, more specifically, to the multi-level governance system that characterises the EU itself. These changes most obviously relate to devolution,
but there were also many other changes: independence for the Bank of
England (which, in passing, meant the UK fulfilled a requirement for
joining the euro); the adoption of proportional representation for elections to devolved authorities and the European Parliament; the incorporation of the European Convention on Human Rights (ECHR) – even
though this is a Council of Europe rather than an EU construct; the introduction of a Freedom of Information Act; reform of the House of Lords;
and modernisation of the House of Commons.33
EU membership was not, and is not, critical in promoting the devolution process in the UK, though it has had a contributory effect – mainly
through the way it creates space for the articulation of regional and substate national interests and identities. But though devolution is not
because of the EU, the fact of devolution has instigated a much closer fit
between the British and EU systems of governance that may make accommodation to future EU policies easier and promote domestic preferences
in the European arena more effec
tively. Devolution has already necessitated a culture shift in the formulation of Britain’s EU policy, particularly
where the devolved institutions have a responsibility for implementation.
32 Erin Van der Maas, ‘Trade Unions’, in Bache and Jordan , The Europeanization of British
Politics, pp. 152–167.
33 Simon Bulmer and Martin Burch, ‘The Europeanization of UK Government: From Quiet
Revolution to Explicit Step-Change?’ Paper presented at the ESRC/UACES conference on
‘Britain in Europe and Europe in Britain: The Europeanisation of British Politics?’
Sheffield Town Hall, July 16, 2004, p. 2.
In effect, ‘the basic structure of the state has been changed creating a
potentially more varied interpretation of ‘national’ European interests
and objectives’34. Moreover, it is difficult to see how even under a less
sympathetic government Britain’s emerging multi-level governance
might be reversed: the main features of Labour’s constitutional reforms
are now accepted by all of the major parties and to reject them would be
electorally unpalatable.
Overall evaluation
At the end of Blair’s premiership, the nature of the EU was in important
respects more to the government’s liking than it had been in 1997: economic policies and priorities had become more liberal in tone and focus;
membership had increased to 27 member states, and with more would-be
members, including Turkey, in line; and – in no small part because of the
increased membership – the prospect of the EU drifting in a federal direction was remote. At the same time, Britain’s position as an EU member
state had improved: it had come to be more of a mainstream policy actor
and was not viewed by other member states with the almost innate suspicion that had so characterised the years of Conservative governments;
when it did adopt Eurosceptic positions in policy deliberations it was
more likely than formerly to find allies – not just from the two previous
main possibilities, Denmark and Sweden, but also from some of the new
member states, notably the Czech Republic and Poland; and with the
accession of the CEECs, it had more potential allies for its Atlanticist
position on external security policy matters.