TUC fails to back Government on EU Constitution
Bulletin 3 – 21 September 2004

Main points:

1. TUC fails to back Government on EU Constitution
Trade Unions cross the line from support to neutrality in a blow to Tony Blair

2. New directive on investment favours business, not workers
Proposed directive fits pattern of Thatcherite policy slant

3. European Defence Agency meets for the first time
New Agency meets to coordinate arms increases

4. French socialist split deepens on Constitution
Laurent Fabius says he will vote no to protect jobs

5. Government to send copy of the Constitution to every UK household
Denis MacShane’s pledge in Parliament is a welcome step forward

1. TUC fails to back Government on EU Constitution

Last week the Trades Union Congress met in Brighton, at what is expected to be the last Congress before the next General Election. It could also be the last Congress before a referendum is held on the proposed EU Constitution. In stark contrast to previous meetings of the TUC where motions in favour of the UK joining the euro were tabled, no motion was proposed calling on the TUC to take a position in favour of the Constitution. Two proposals were put forward - a General Council statement committing the TUC to neutrality on the issue, and another from the RMT rail union committing the TUC to neutrality but putting a more explicit case for the TUC to reject the Constitution at some point in the future.

The debate at Congress mainly focused on whether the TUC should come out against the Constitution now, or whether it should wait for further internal debate within member unions before making a decision. During Congress, the GMB’s Kevin Curran told the Morning Star that "I know that the EU directive on transport and public services encourages privatisation and, of course, it must be vigorously opposed" (Morning Star, September 13), but insisted in the debate that this year’s Congress would be "too early to say yes or no" to the Constitution.

Congress decided to back the General Council statement in favour of staying neutral after a long debate. The statement said that, "it would be inappropriate to take a formal position for or against the constitutional treaty until unions and the General Council have had the opportunity to consider it in depth and assess its impact on key issues such as the rights of working people to decent work, the national democratic rights of member states, public services and equality."

The TUC's decision is a big set-back for the Government. Tony Blair took the unions for granted while ministers boasted to the CBI of blocking new rights for workers.

In 1999, a grand coalition of the Government, the Labour Party, the Lib Dems, the CBI and the TUC was amassed which, we were told, would take Britain into the euro. Now, with a referendum on the Constitution a possible twelve months away, Tony Blair has neither business nor trade union support..

The referendum will be closer than most pundits predict, but Blair surely did not want to be in the position that the Government is now in when he conceded a referendum on the Constitution.

2. Single market initiatives favour business, not workers

Last week’s draft directive from Fritz Bolkestein and European Court of Justice ruling on share holding show that EU rules will, in future, give greater freedom to cross-border shareholders. The ECJ ruling removes the right of governments to tax foreign share holdings in the EU – at a cost of £10bn, while the plan for a new directive would give cross border shareholders more power over their investments.

Internal market Commissioner Bolkestein’s new initiative will stand along side his draft Directive on Services, published earlier this year. The draft Directive on Services has caused a great deal of controversy - rightly so. Its aim is to complete the single market in this substantial part of the European economy. It would apply to all "economic services" not already covered by single market legislation.

The Commission’s own estimate is that this will affect the jobs of around 60 percent of the European labour force. The European TUC has expressed concern about the draft Directive. It pointed out that public services should not be treated in the same manner as private services such as insurance – the distinction is unclear in the Directive. There is also concern that service providers would only have to abide by labour standards established in their country of origin, which would allow companies to move their base to a member state with lower standards, causing a spiral of deregulation. This could have a long term impact on labour standards across the EU.

Stefan Wagstyl argues in the FT (21 September) that companies are already ‘off-shoring’ their operations to new member states such as Hungary. The Directive on Services would hasten that process, as would the European Constitution, which states that member states and the EU should ensure that services "operate on the basis of principles and conditions, in particular economic and financial, which enable them to fulfil their missions. European laws shall define these principles and conditions" (Article III-6). This would allow the Commission even greater power to decide on the provision of services across the EU.

3. Defence Agency meets for the first time to increase military spending.

The European Defence Agency, which was set up in anticipation of the greater role for defence in the EU Constitution, has met for the first time. At the meeting, held last Friday, it indicated its desire to increase military capabilities across the EU - this would probably mean an increase in military spending. The Dutch Minister of Defence, Henk Kamp, who holds the chair of the EU, stated that he is "proud to have this kick off under our Presidency. The Agency is not only an important tool for deepening our cooperation but also for strengthening our capabilities. [...] First and foremost the agency should focus on capabilities development".

The meeting took place as France, Spain, Italy, Portugal and the Netherlands agreed to set up a Gendarmerie that could serve in peacekeeping missions.

4. French Socialist split deepens on Constitution

Former French Prime Minister, and Party deputy-leader Laurent Fabius’s decision to oppose the European Constitution has widened the split on the Constitution within the French Socialist Party. He said, "I find nothing in this text that would allow for a change of policy in the field of jobs and fight against the moving of jobs abroad ... my natural inclination ... is therefore to vote no."

The decision leaves Mr Fabius facing in the opposite direction to the Party leader, as senior figures take different positions on the EU Constitution. Party leader François Hollande has already come out in favour of the Constitution and ex-Prime Minister Jospin is known to support it, while former Party leader Henri Emmanuelli opposes. It will be down to party members to decide the Party’s official position – that decision could go either way. Most of the party’s leadership support the Constitution and can mobilise many people within the party, but the three major left currents within the Socialist Party all oppose the Constitution and between them control 40 percent of the vote within the party.

5. Government to send copy of the Constitution to every UK household

The Government took a welcome step forward to opening up the debate on the EU Constitution last week after Denis MacShane promised to send a copy of the text to every UK household. There had been fears that the Government would shy away from this move because of fears that confused voters may prefer to stick to the status quo than risk voting for such a complicated and weighty document. However, speaking in the Commons, Mr MacShane said, "I welcome the suggestion made by the right hon. and learned Member for Devizes (Michael Ancram), the shadow Foreign Secretary, that a copy of the constitution be sent to every household. There are some 30 million households in the UK, so that would be an expensive project. However, I can now tell the Prime Minister and the relevant authorities that it is an all-party proposition and that the Conservatives will not object."


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