Sex, Virgins,the EU and Labour

Social Europe Journal 26 Sept 2014
What Labour Policy For Europe?
26/09/2014 by Denis McShane
Labour already has its most important policy in place on Europe. In an act of remarkable political courage Ed Miliband has rejected a copy-cat plebiscite to match David Cameron’s Brexit referendum of 2017.
It is important not to underestimate the importance of this decision. As with his calling time on Rupert Murdoch in 2011, or his decision not to endorse bombing Syria on behalf of jihadis last year, Ed Miliband has taken lonely brave decisions that cut against the grain of conventional political wisdom – namely always crawl to Rupert, never say No to Washington (the limited raids on Isis in Iraq already being undertaken by France are a different matter) and when in doubt offer a referendum on Europe.
That is what Tony Blair did when he promised plebiscites on the Euro before 1997 and then again on the EU constitution treaty in 2004. It bought time and silenced the off-shore owned press but at the cost of further marginalising the UK as a major EU player and further feeding the appetite of anti-EU isolationism. It is a mark of Ed Miliband’s bravery and political leadership that the decision to reject Cameron’s Brexit plebiscite is being attacked by major trade unions and even briefed against by some of his shadow cabinet. Any decision by a left leader that commands universal support is by definition a bad decision.
So at the next election the voters will have a clear choice. Do they want a re-run of the horrors of the Scottish plebiscite which so nearly resulted in the destruction of Europe’s longest surviving major democracy or will they say No to the Tory-UKIP vision of a Britain disuniting from its European partners in an act of self-marginalisation not seen since the United States quit Europe in 1919?
A Labour led Britain needs Europe and Europe needs a new policy of positive engagement from Britain that has moved on from the half-hearted membership in which Europe was seen as a headache and a problem.
In the event of Cameron staying as prime minister, pro-Europeans should have no illusions about winning a plebiscite in 2017 to stay in Europe. With the aftermath of the political Fukushima experience in Scotland still contaminating the Westminster atmosphere for years to come, the notion that Britain can have a swift repatriation of powers and a comprehensive renegotiation sufficient to persuade the Tory-UKIP half of the country, plus the off-shore owned press, plus the many big and small businesses who have been fed anti-EU lies and propaganda for fifteen years that all is now in place for a positive Yes vote to the EU is a fiction.
There is tremendous support in Brussels and in most EU national governments to do anything to help the UK stay in the EU. But that support cannot extend to the wholescale re-writing of the Treaties or giving the UK a special à la carte status. Nor can the EU do anything about the new front the anti-Europeans have opened, namely the clamour to pull out of the European Convention on Human Rights and the Council of Europe. Given the EU is signing the ECHR to tear up that treaty obligation means also tearing up EU membership. However, saying No to Mr Cameron’s In-Out Brexit plebiscite is not enough. Labour needs to think now about what it would do about Europe when back in power.
A Labour led Britain needs Europe and Europe needs a new policy of positive engagement from Britain that has moved on from the half-hearted membership in which Europe was seen as a headache and a problem in the 3rd Labour administration after 2005 or the downright negative anti-EU line of Cameron since 2010. All of Europe is seeing the rise of populist, xenophobic politics whatever line is taken on free movement of people in the EU. To blame just that factor is to make half of the UKIP case before a debate starts.
As long as the UK had a booming economy as it did between 1997 and 2007 it attracted foreign workers as happens in every economy in the world. After 2008 crash this went into reverse but to blame European workers because Labour did not build enough social housing and Labour refused EU social rules which helped defuse some of these problem elsewhere is scapegoating of the worst sort. Those preparing for power and for what policies to adopt on Europe should focus on the future with a positive European vision.
There is now the most talented generation of Labour MEPs ever sent from Britain to the European Parliament since the first direct elections in 1979. Their talents and networks and experience must be harnessed and used. Labour should try and understand the revolution in the way the European Commission is now organised. It is now grouped in seven major clusters instead of 28 little baronies. More important, the Commission President, Jean-Claude Juncker, has named a deputy president, Frans Timmermans. He is a Labour Party – PvDA – Dutch thinker first and politician second who speaks better English than most British politicians. Any policy proposal or proposed directive that Timmermans doesn’t like goes no further.
The most important priority which cuts across party political lines for the EU is to get growth going again. Since 2009, the US Federal Reserve has poured $2.5 trillon into the US economy through printing money under the euphemism of quantative easing. The Bank of Japan has done likewise injecting $2 trillion and the Bank of England has adopted a pure Keynesian policy of injecting $650 billion – a sum that the MPC member, economist Martin Wheale, reckons has added 3 per cent to the UK GDP – exactly the growth figures we are now seeing.
One of the great hypocrisies of the British right is the clamour for more and more EU single market but less and less Brussels and fewer EU directives.
A Labour Britain should be urging such Keynsian injection of money by the European Central Bank with debt rescheduling or write-offs for southern Europe before the economic despair there turns into political rejectionism.
Labour should also work in Europe for a massive re-connect between national parliaments and EU decision-making – a project close to Frans Timmermans’ thinking. Labour should welcome Jean-Claude Juncker’s declaration that there will be no enlargement of the European Union in the next 5 years and his view that this era is about consolidation. That clearly means that all the chatter about increasing the single market is on hold because without further massive transfers of national sovereignty to Brussels via rules that allow the Commission to dictate national policies on trade and competition no major increase in the single market is likely to happen.
One of the great hypocrisies of the British right is the clamour for more and more EU single market but less and less Brussels and fewer EU directives which is rather like calling for more and more sex at the same as demanding more and more virginity. There is a need for an EU energy union and a telecommunications union and to stop the US behemoths like Google crushing every start-up in the EU’s digital economy.
For ten years Labour has not known how to make the case for Europe. Europe needs to be neither over-idealised nor over-diabolised. The goal should be to make the EU like Nato – not perfect, always open to reform, but an indispensable element of the UK in the 21st century. Better Together with European nation-states than divorce and living apart.
(This article based on talk at Policy Network meeting at Labour Party Conference 22 September Manchester)

Difficult Politics Ahead after Scottish Vote

The Globalist 19 September 2014
The UK’s Problems Have Just Begun
Far from settling everything, the Scottish vote has opened everything up.
By Denis MacShane, September 19, 2014

There was a Phew! of relief in London as it became clear that after three centuries of marriage Scotland and England have decided not to divorce. But the two nations are now living in different rooms without much common conversation. And the vote against separation is the beginning, not the end of Prime Minister David Cameron’s political difficulties.
Just the beginning?

David Cameron was forced to make major concessions to the Scottish nationalist leader, Alex Salmond, in the days before the referendum. These include writing into law the so-called Barnett formula, which grants Scotland a disproportionate share of UK government revenue compared to England and Wales.
Already Conservative MPs are protesting that their constituents should not have to fork out more taxes to pay for the over-large state sector in Scotland or the generosity of free university tuition and health care largesse.
As long as the check from England arrives there will be no pressure on the Scottish government to modernize its state sector in the model of social democratic Nordic countries where private agencies run huge chunks of public services.
Mr. Cameron has also said that there will be a constitutional revolution with MPs elected in UK constituencies not being able to take part in legislation in the House of Commons on a common basis.
The sight of 59 silent sheep MPs from Scotland marching out of the House of Commons when it discusses health care or education, or policing which policy areas in Scotland are decided by the Scottish parliament means that the unitary parliament of the four nation kingdom is seeing its closing days.
The doctrine of parliamentary supremacy as defined by Edmund Burke and Walter Bagheot has been quietly buried by Mr. Cameron. Instead the UK will have to move to a more continental system of a written, legally enforceable constitutional contract setting out who has powers and how they can be used.
Scotland is now divided
The London elite establishment has taken a terrible knocking. How did the finest brains in the Westminster political-media matrix not notice until the last panic-stricken days what was going on? The prime minister has had to turn to his despised, hated foe Gordon Brown and – like a latter day Cincinnatus – call Brown from nursing his grievances in retreat to save the United Kingdom.
Labour joined in the last-minute promises about reform of parliament but if Labour’s Scottish MPs cannot vote on major policy decisions affecting England, especially on issues dear to Labour like health, welfare and education, where does Labour find a working majoroity to form a government?
Scotland is now divided between its western, Glasgow, post-industrial Catholic working class citizens who voted Yes and its Edinburgh, banking city-connected Calvinist better-off citizens who voted No to stay linked with the south.
The vote was bought, as was the original union between England and Scotland in 1707, with generous promises of money and political power that in cruder language might accurately be called bribes.
But in 1707, the newly formed United Kingdom was about to embark on two long centuries of economic and political aggrandizement. That is not the case today where Britain – whether of left or right – does not know how to find a new economic, social and cultural settlement that makes sense for the 21st century.
So the Scottish vote far from settling everything has opened up everything. There is little evidence that the Westminster political-media elite know how to think through what will be very difficult years ahead.
Problems with the EU will only intensify
In three weeks there will be another political earthquake when the first UK Independence Party MP enters the Commons after a by-election in Clacton, Essex. From then until the May 2015 election, the question of Britain’s union with Europe will dominate politics. Mr. Cameron has pledged an In-Out referendum – long called for by UKIP – which so far the two other party leaders, Ed Miliband and Nick Clegg reject.
Referendum politics are very different from parliamentary politics. After a rock-solid union of 300 years which few questioned until very recently, the Scots came close to separating from England. The UK union with Europe has lasted just 41 years but voters have been told by many politicians, business leaders and most of the press that the UK-EU marriage is a mistake and it might be better to separate.
Mr. Cameron had tears in his eyes as he expressed his love for the UK union and his fear of it coming apart. He has never shown the slightest warmth for the UK’s union with the rest of Europe and many of his ministers and MPs make clear it is a relationship they wish they were not in.
So along with the extraordinary constitutional and fiscal upheaval that will have to turn into law to honor the Cameron-Miliband-Clegg promises to the Scots, the UK will face turmoil over its relationship with Europe with Brexit a looming possibility.
The pound rallied slightly as the No vote won. But the politics of re-writing the rules by which the UK governs and the future imbroglios over Europe have all got a lot worse.

This is a letter to my son, a student at Edinburgh University, who will vote in the Scottish referendum on 18th September. It also includes a letter from Jacek Rostowski in the FT whose son at Glasgow University can also vote and a joint statement with other members of the OMFIF advisory board

Dear Ben

Below some arguments on the Scottish vote from a joint statement I have endorsed together with other friends in an organisation, OMFIF, I am linked to.

Also a letter from a friend, Jacek Rostowski, from a UK Polish family who grew up in England and was a university professor here before making a career in Polish politics.

His son is at Glasgow University so like you at Edinburgh Uni has a vote.

Jacek like me sees this in the wider terms of Europe and the dark forces for nationalism, separatism and populism that are growing.

Jacek and my generation has seen the coming together of the nations in Europe being able to sink their profound dislikes, rivalries and proud identities into some community of living together much as the Scots and English have done over 300 years.

Thanks to the passions of populist nationalism your grandfather who you never met was forced to fight and be wounded by a German bullet in 1939. He came to Scotland as an officer in the Polish army in 1940 and there he met Granny and here you are back at a great European university in the nation you have these links to.

He died in part from his war wounds in 1958 but in 2002 I sat in the Chair at the European Council representing the United Kingdom (not England) which admitted Poland to the European Union. I have watched how union not separation has helped Poland grow and watched the same process at work in Ireland, where Granny’s family came from, and which today thanks to union with other countries is infinitely richer and fairer than it was when I was your age. The Poland and Ireland they know when your age – of clerical oppression, nationalist hatred and intensely poor – have disappeared. But if Europe and the UK disintegrate into petty hates and rivalries, believe me history does not treat nations kindly when they embrace such stupidity.

All the people who argue for separation – of Scotland from England and Wales, of the UK from the EU – are sincere and have populist passion on their side.

And the chance to give this rotten elitist millionaire cabinet a kicking as well as a Westminster riddled with fiddlers (I am to put it mildly an expert on that point!) and liars about Europe is very tempting.

Don’t forgot Salmond wanted a 2nd question – Devo Max – on the ballot paper but Cameron and the London eiites in the arrogant complacency that the No vote was a No brainer dismissed it. I think because Cameron wanted an easy win on an EU In-Out referendum question instead of admitting that Europe, like the UK, is a complex, multi-factor relationship not reducible to a simple Aye or No.

It is hilarious to read all the London Tories and their puppets in the press telling the Scots they must stay in the union with England while telling the English the union with Europe is a terrible thing.

Hilarious and hypercritical but such is politics.

Anyway to punish Cameron and the Bullingdon Boys is not a reason to indulge in nationalism, separatism and voting to provoke a crisis in our country and I think in Europe that will undo much that is good even if imperfect.

Emilie and I were swimming in the warm seas off Greece again today and send lots of love and we will all be together at the end of the week when we will know if your vote has been the one that mattered.



A split spells stark danger for Europe
Sir, My son, who is studying at Glasgow university, is considering how to vote in the Scottish referendum. My answer has been that dismembering the UK would further destabilise an already extremely dangerous situation in Europe. It would be bad for the UK, bad for Poland, bad for freedom and democracy in Europe, and bad for Scotland.
The diverse forces calling for separation are far from tribal
It’s the debt stupid, not the currency
A curious understanding of common sense
An intoxicating cocktail of blood and soil
Tens of thousands of Poles will have the right to vote in the referendum. I would appeal to them to reject the folly of dismemberment of one of Poland’s closest allies. The same applies to Lithuanians, Latvians and other EU citizens resident in Scotland. They all have the vote in this referendum, and we shall all be less secure if irresponsibility triumphs.
On the question of Scotland’s rights to the Bank of England, Alex Salmond seems not to understand the difference between assets and liabilities: Scotland presumably would have a claim to a share of BoE assets when the Bank (and UK public debt) are divided between the two countries as a result of a Yes vote.
But Scotland has no right to insist that the assets of a new National Bank of Scotland should be funded by liabilities for which the rest of the UK would be jointly responsible together with Scotland. With greater power inevitably comes greater responsibility, however inconvenient that may be. Just as à la cartemembership of the EU is impossible, so is à la carte independence.
Mr Jacek Rostowski, Former Deputy Prime Minister of Poland, Warsaw, Poland

OMFIF is an independent non-aligned organisation working with different institutions and jurisdictions and does not take a political or ideological stance on issues of interest to our members and counterparties. We are however making an exception in the light of this week’s referendum on the future of the UK, which we believe could have profound, widespread and largely damaging consequences.

Scotland matters
The damaging effects of a UK break-up

The possible departure of Scotland from the United Kingdom in a referendum decision on 18 September would make European and international politics and economics less predictable, more volatile and less secure. This small sea-surrounded surface on a small planet has made an important contribution, for better or for worse, to today’s world. The nation-state that faces a conceivable dismantling has straddled, and played a major part in, the periods of the industrial revolution, the rise and retreat of western colonial-imperialism, the onwards (but not necessarily irreversible) march of globalisation, the waning and waxing of Asia, the ascendancy of America, and the rending and reintegration of the traditionally warring principalities of Europe.

The nature of the vote, and the careless, somewhat arbitrary fashion in which it has come about, have attracted much hyperbole. Yet the over-used epithet ‘historic’ is justified. ‘In or out’, Scotland matters – deeply.

Opinion polls indicate that there is a greater chance of a Yes vote than seemed likely a few weeks ago. The most likely outcome is still maintenance of the status quo. But the influences behind the Scottish vote reflect wider international developments that are likely, too, to persist.

First, the desire of smaller groupings of people, in democratically run and generally well-off states, to pin their futures on self-affirmation and self-government, appears to be growing. Some of the sought-after gains may be illusory. The potency of the hopes behind them is real.

Second, the breaking down of barriers between international flows of capital, labour and trade has spawned many winners but also some losers. Global economic interdependence has mainly flowed, but also ebbed, since the Act of Union in 1707. Globalisation is undergoing a phase (which Europe last witnessed, with unpleasant results, in the 1920s) in which many see it as both creating and concentrating wealth: imperfect, unreasonable, impermanent. Scotland’s First Minister Alex Salmond, the pied piper of Linlithgow, has cleverly fused perceptions of economic injustice and some longstanding anti-English grievances into his own brand of conviction politics.

Third, the influence of superficial populism grows when technology accelerates the dissemination of beguiling thoughts and opinions. There is a disturbing dichotomy between the short-term power of the internet and the TV screen, and the long-term nature of a binding ballot box decision to break a thread that has successfully held the UK intact over three centuries.

Scotland and the other constituent parts of the UK are wired into the mechanisms of the modern world, but no longer form its hub. When OMFIF at the beginning of the year pondered the 10 most important developments in store for 2014, we highlighted tension between Japan and China, unrest in the Middle East and a strong US economy, with the Scottish referendum well down the list. Under point No.9, we said: ‘A probable firm vote for Scotland to remain in the UK … will add to UK bullishness.’

Nine months on, it is time to say that a Yes vote would have 10 major consequences for Europe and the world – nearly all of them uniformly negative. At times in recent months, it has appeared as if the more lucid the arguments deployed against a Yes vote, the greater the Nationalists’ success in turning them to advantage by branding them as worthless or self-serving propaganda.

Scottish self-delusion at times has seemed to be gaining the upper hand. Yet it is not too late to hope, or even expect, that reason will prevail.

1. A Yes would make Europe more divided, more distracted and less able to play a positive role on the world stage. It would increase the likelihood of the remaining UK leaving the EU in a future referendum decision and would heighten the importance of separatist policies elsewhere in Europe. Most European leaders know the break-up of an important EU state would heighten Europe’s problems, and diminish its importance, in the eyes of the world. A Scottish shift would have global consequences, making it harder, for example, for the UK (and probably France too) – in contrast to India, Brazil, Germany and Japan – to maintain a permanent place and veto on the UN Security Council.

2. Monetary arrangements form any state’s heart. A separated Scotland’s would be weak and palpitating. It is idle to believe that the Scots could carry on using the pound as though nothing had happened. Centuries-long experience shows that a successful currency union requires political union, unless one region wishes to be permanently held in check by the more dominant player. It would be supremely illogical for Scotland to vote for independence and then, in its fiscal and monetary relationship with England, take on the subservient part of a Liechtenstein in its link-up with Switzerland. Scotland’s new currency would be conceived in hubris, born of frustration, and grow up in instability.

3. Brains, money and jobs would haemorrhage southwards. Scottish banks and financial service companies would not be the only ones to move bases, business and people, to Manchester, London and Carlisle, Leeds, Birmingham and Newcastle. Older, less flexible, more vulnerable, less active individuals would stay behind. In an act of imaginative folly, the Scots would manufacture a similar reason for the same kind of destabilising population flows (east to west rather than north to south) that unification between East and West Germany in 1990 sought to forestall. ‘If the D-mark doesn’t come to us, we’ll come to get it,’ was the East Germans’ slogan as they forced the West German authorities to bring in Europe’s quintessential hard currency, and then to reunite the country, in 1990 to choke off massive streams of westwards migration. Sterling may not be the D-mark. But that no longer exists. The British currency, in recent years (for a mix of reasons) harder than the euro, has its attractions. The exodus this time would be across not Berlin’s Wall but Hadrian’s.

4. In many other areas, independence would exacerbate, not alleviate, Scotland’s economic problems. Whether in pensions and social provision, research and development, commerce, trade and investment or their shopping bills, the Scots would soon find self-harm lurking behind self-determination. Rather than escaping what some Nationalists see as a centuries-old cycle of impoverishment and neglect, Scotland would be more likely to usher in a new one, of its own making. This could be a bizarre re-run, in reverse, of the English-Scottish monetary union 307 years ago, after well-off Scots bankrupted the country and drove it into the arms of the English following a display of misplaced confidence in a capricious investment scheme to colonise the Isthmus of Panama. The ‘re-energisation’ of Scotland promulgated by the Nationalists might one day happen, but, in view of the large number of anticipated initial problems, the Scots would probably have to wait a long while for the promised benefits.

5. The early political outcome of a Yes vote in the UK would be destabilising. Alex Salmond’s victory fruits would not last long. Despite the charm, pugnacity and skill with which he has deployed his campaigning talents, Salmond could risk ending up, like many revolutionary leaders, a disappointed figure. A better result, for him and for Scotland, would be to lose the referendum but win compensatory powers from Westminster. If the Yes side wins, David Cameron, brimming with blandness yet bereft of foresight, would go down in history as a latter-day Lord North, the 18th century prime minster who lost Britain’s American colonies. A difficult stretch of negotiations with Scotland about implementing the separation, and especially on dividing up the UK’s assets and liabilities on a basis that all sides find equitable, would be conducted in an atmosphere of bitterness and recrimination that could poison relations for many years. Cameron might well be ejected from the premiership. His Conservative party probably would tilt further to the right and further from the EU. Ed Miliband, the Labour leader, would hardly profit from his rival’s disarray. His party would lose a northern foothold that was too small to turn the referendum tide yet could be sufficiently large to deprive the party of a majority in any future rump UK election.

6. A separate Scotland would not find immediate solace or support in Europe. The present UK’s successor state would have its seat in London, not Edinburgh. Speedy Scottish accession to the EU is highly unlikely. Other European governments are worried about secession in Catalonia, Flanders and elsewhere. Salmond’s ruse to blackmail the English into accepting currency union, by otherwise refusing to accept Scots’ share of the UK national debt, is highly unlikely to succeed. So Salmond would have two choices. He could fulfil his threat and renege on Scotland’s share of the hitherto all-UK national debt, which would have a significant negative effect on the division of all other assets and liabilities with the remaining parts of the UK. Or he could accept Scotland’s inherited and somewhat exacting debt burden, without fully adequate banking and currency arrangements. Either path would reduce Scotland’s status and its negotiating leeway with the EU.

7. The debt issue would overshadow not just the relationship with Brussels, Frankfurt, Berlin and Paris, but also the entre workings of a separated Scottish government. The greater the questions over the new state’s willingness and ability to honour its debts, the higher the interest costs demanded by investors in the debt of a future independent Scotland. And the greater the difficulty, too, of maintaining Salmond’s welfare, pensions, educational promises – yet more black marks against a separated Scotland’s economic proficiency and political credibility.

8. The frequently over-stated riches of North Sea oil cannot represent Scotland’s salvation. The Nationalists’ claims that the UK has in some sense stolen the oil revenues are as fictional as the view that Scotland has stolen them from say Aberdeen or the Shetland Islands. A separate Scotland can negotiate revenue streams for new concessions. But – short of summary nationalisation that has gone out of fashion even with African and South American revolutionaries – there will be no retroactive rewriting of valid legal agreements, no re-diversion of already-agreed revenues and no sudden windfall to swell Scots’ coffers. Strong-arm methods against globally operating energy companies at a time when the oil price is anyway tending below $100 a barrel are not likely to achieve beneficial results for Scotland and its people.

9. A Yes vote would impair the defence arrangements of the UK and its allies, making Europe and Nato less able to intervene in the world’s trouble-spots. A separated Scotland would dismantle the Trident submarine base at Faslane on the Clyde, confronting the London government (and Nato) with a new dilemma over the future of the strategic nuclear deterrent. The 15,000 Scots in the 100,000-strong UK army mainly live outside Scotland, reflecting UK policy of basing soldiers away from their homes. They have not been given a vote to express their loyalty to the state they help protect, despite efforts by leading military figures to persuade the UK government to give them one. This would be just one of the factors hampering the army’s cohesion after a Yes vote.

10. Whatever happens, the procedures for establishing the referendum and the terms under which it is being held run counter to best practice in mature democracies. Many, now and in the future, may look with incredulity at Cameron’s negligence in deciding to go ahead with the poll and making the result legally binding without any reference to the UK parliament and without the normal democratic prerequisites of constitutional change such as super-majorities and second-vote reconfirmations. Not least for the UK’s European partners, the carousel-like development under which a residual UK shunned by Scotland would probably tilt further away from European integration should give rise to foreboding. Thoughtlessness, expediency and a vein of unscrupulousness have coalesced to make possible a risky experiment of great destructive power. History is littered with cases where such uncontrolled processes have led to disaster. Onlookers with a stake in the outcome, but no direct role in Thursday’s referendum, can do little but hope that this will not be another one.

Energy Policy Vital for EU

With the nomination of Jonathan Hill as EU Commissioner for Energy (and Climate Change) a British official has the chance to lead in one of the most important dossiers the new EU leadership faces. Here is an article I wrote a few months ago for the Independent about why the EU needs an energy policy and why it is so difficult to shape one.

Europe’s Energy Policy – Just Say No

By Denis MacShane


Europe has an energy policy.  It is just say No.  Germany’s Chancellor Merkel says Nein to nuclear power. France’s President Hollands says Non to shale gas. Britain’s Prime Minister Cameron says No to wind power unless it is a few kilometers out to sea. Poland’s Prime Minister Tusk says Nie to any limit on burning brown coal – lignite – the most polluting of any fossil fuel.

In all cases the political leaders have public opinion behind them and think they will garner votes by saying No to any source of energy the electoral dislikes. The European Commission and European Parliament are saying No, for the time being, to South Stream, the new pipe-line to bring gas from Russia via the Black Sea, Bulgaria, Serbia and Austria. South Stream’s political imperative is to avoid transiting Ukraine just as Russia’s North Stream pipe-line in the Baltic links Russia directly to Germany without traversing Poland.

While the EU’s energy policy is incoherent to the point of non-existence, Russia knows exactly what it is doing – seeking to make Europe ever more dependent on Russian gas. It is a toss up whether Gazprom is an arm of the Russian state, or the Kremlin is simply the political expression of Gazprom.

Certainly the Russian behemoth is everywhere. Bulgarian ministers have admitted that Gazprom recently re-wrote the Black Sea nation’s energy laws so as to seek to put South Stream out of reach of European Commission oversight.

The European energy Commissioner, Gunter Oettinger wrote a cross letter to Sofia abut this legerdemain and at some stage Brussels will have to decide whether it will get as tough with Gazprom as it did with Microsoft and Intel.

However there is cross-party consensus in Bulgaria in support of South Stream and Bulgaria’s historic pro-Russian warmth is undimmed by the strains of the Ukraine crisis. Western energy firms who have invested in Bulgaria however want fair treatment as well and the main problem Europe faces with Gazprom is its demand for monopolistic rights and its belief that it should not be subject to EU competition law.

Gazprom sponsors football clubs in Germany, hires the daughter of Romania’s President Basescu as its lawyer in Bucharest, and most famously, has the former German chancellor, Gerhard Schroeder, on the payroll.

There is nothing intrinsically wrong in that. Swiss bankers say money has no smell and nor does energy. The West has been dependent for decades on oil from states that finance jihadi terrorism and want the elimination of a UN member state – Israel.

The Kremlin knows what it wants – to make Europe so hooked on Russian energy there will never be any pressure on Russia. But what does the EU want? The Polish prime minister, Donald Tusk, put forward an ambitious plan to create a real EU energy union.

Inspired by the 1950 Coal and Steel union which saw major European nations pool sovereign authority over what was then their main source of energy – coal, and the key component of growth – steel, to a supra-national authority Tusk argues for a single EU purchaser of Russian gas and for Europe to diversity its gas supply to include contracts with the United States or Australia.

He also wants to see an end to market-distorting subsidies such as the billions paid to windmill manufacturers. The Green movement especially in Germany and France have helped accelerate the slow de-industrialisation of Europe but  Mrs Merkel’s Nein to nuclear and Francoise Hollande’s Non to fracking are about politics not economic growth.

Premier Tusk refuses any challenge to his nation’s dependence on lignite and the politics of an energy union which ignore climate change fears will not get off the ground.

However the Polish leader makes the good point that an EU outfit, Euratom is the single purchaser for all the uranium used by 28 member states. If a new body – let’s call it Eurogaz – became the single EU buyer of Russian and other foreign gas then Gaz-Kremlin-Prom would have to play by EU rules instead of having EU nations like Bulgaria defending at any price Gazprom, and behind it, the Kremlin with its divide and rule strategy for Europe.

Once new MEPs and Commissioners are in place creating a European Energy Union would be a project that even Eurosceptics might accept.


Denis MacShane is a former UK Europe Minister



Scottish Vote Will Hit Europe

Statement by former Europe Minister, Denis MacShane


If Scotland votes to leave the British union most EU governments will see this as a forerunner of England leaving the European Union. The EU is in a centrifugal even disintegrative mood and few will thank the Scottish nationalist separatists for destroying the United Kingdom. Scotland as a new nation state will have to join the queue of other small recently formed European nations like Serbia and Kosovo and negotiate EU membership . A condition of entering the EU is joining the Euro. All 28 member states would have to ratify Scotland being in the EU and Spain would have real problems as a vote to amputate Scotland would be seen as the perfect precedent for Catalonia to break up Spain. Brussels might well ask for a second confirmation referendum as in Ireland or Denmark when new treaties were rejected. A Yes vote in Scotland would plunge Europe into an angry crisis with anger also directed at Westminster elites who allowed this to happen.

OMFIF Comment

OMFIF Commentary 8 September 2014

Britain’s centrifugal forces

Three reasons why Scottish Yes looks more likely
By Denis MacShane
A Scottish vote to separate from England on 18 September would provoke a political-constitutional crisis with ramifications beyond Britain’s borders. The fused English-Scottish nation that rose to world power after the 1707 merger, and remains a powerful economic and military force, would cease to exist.
Three reasons help explain why centrifugal forces in the UK seem to be growing.
First, the absence of any Conservative presence in Scottish politics has made almost wholly negative the influence north of the border of the main UK government party. David Cameron is a prime minister who appears to epitomise elitism. The perceived class bias of relatively wealthy and apparently privileged Conservative ministers arguing for austerity across the UK has contributed to Scottish feelings of separation. Many Scots question why they should stay in an allegedly impoverished Britain where far-off London appears to offer nothing more positive than cuts in pay, pensions and social provisions.
Second, the pro-union Labour party, which still has an important network in Scotland, has not found a tone to make the ‘better together’ cause inspirational and attractive. Over the past three decades, the best of Labour politicians have made their careers at Westminster, including in national government from 1997 to 2010 under two Scottish-born prime ministers, Tony Blair and Gordon Brown. While the Labour Party in Scotland was drained of talent, the Scottish Nationalist Party attracted high quality left-liberal politicians who usually out-perform the lacklustre Labour representatives left behind.
Third, in foreign policy, England’s obsessive clamour for separating Britain from the European Union has backfired by helping persuade many Scots of the merits of splitting Scotland from the interfering English. Further afield, UK policies that seem to contribute to jihads in the Middle East have further alienated a Scotland that mostly opposed Britain’s participation in the US-led invasion of Iraq.
If the Scots, including many EU citizens registered in Scotland, vote Yes on 18 September, both main political parties at Westminster would suffer. Labour’s chances of regaining national power would fall significantly, as the party has relied for past majorities on Scottish Labour MPs. Cameron, the prime minister who presided over UK break-up, would probably have to resign.
The EU would face turbulence over whether Scotland can continue as a member state or should apply anew for membership, including of the euro bloc. The forces for separatism in other EU member states, notably Catalonia in Spain, would grow, as would the chances of a British EU exit. At a global level, what is left of the UK would be a diminished, enfeebled power.
None of this is encouraging. On 19 September we will know whether it becomes reality.

Denis Macshane is the UK’s former minister for Europe.

Scottish Referendum

London has already lost in fight for Scottish independence

Denis MacShane | September 8, 2014 | 0 Comments


It is hard to understate the electric shock going through London political elites as the first opinion poll showing a majority for an independent Scotland is published. While there is much talk of Brexit – Britain exiting the EU – the real danger is ‘Scotexit’, Scotland exiting the United Kingdom. The implications for Europe are serious.              

The separatist camp hope that the dramatic poll –even if only showing a 51-49% endorsement of independence – shows they now have the momentum to take Scotland out of the United Kingdom.

The pro-union campaign hopes the poll will be a dramatic wake up call and panic people into voting to maintain the existing British state and unified United Kingdom.

Privately pro-union Scots are dismayed and demoralized. They hope a final surge of common sense will prevail but, unlike before the summer holiday, the poll figures no longer support that complacency.

Three reasons explain the arrival of the now distinct possibility of Scotland separating from England.

The first, is the absence of any in Scotland. The posh and wealthy Conservative ministers, all rooted in the south of England,  have insisted that Britain is a bankrupt nation destroyed by debt and deficit and requiring savage cuts in public services to recover health.

This bleak, negative and untrue depiction of Britain since 2010 has led Scots to question why they should stay in an impoverished Britain where the only political offer was cuts on pay, pensioners and public provision of health, education and housing. Would it not be better they feel to look across the North Sea at small Nordic states which combine economic efficiency and social justice.

The foreign policy blunders of the Old Etonian prime minister which have led to UK marginalization in Europe, as well as problems in Libya or Syria where Cameron urged military intervention that gave rise to even more jihadis have further alientated a Scotland that hated Blair’s Iraq war and want to be more like Sweden in no longer sending sons to die in foreign fields.

Prime Minister Cameron, together with other southern elite members of his cabinet, have come to Scotland to wag their fingers and patronize the Scots by telling them they cannot survive except as a junior partner to London. He has organized appeals from ageing English celebrities like Mick Jagger and Sir Paul McCartney to tell the Scots they are better off being supervised from southern England. Cameron called the referendum as he was keen to show the merits on a referendum on Europe. But the mood is now centrifugal, even disintegrative.

The second difficulty is that the pro union Labour Party which still has an important network in Scotland has not found a tone to inspire or make exciting the case for the union. Since 1980 all the best and brightest of high quality Labour politicians have made their career in London at Westminster and in national government until 2010.

The Labour Party in Scotland was drained of all talent as the most able Labour politicians sought to head south rather than stay in Scottish politics. In consequence the Scottish Nationalist Party attracted high quality left-liberal politicians whose spokespersons usually out debate the Labour politicians left behind to mind the shop in Scotland while Labour starts headed south to make a name.

The third reason is the obsessive clamour in London for the separation of Britain from the European Union supported by many Conservatives as well as media proprietors. Their argument that Britain can have a radiant future separated from Europe has been translated in Scotland into the belief that separation from a interfering power is a desirable and achievable political goal. If the Scots, including many EU citizens who are registered in Scotland, do vote Yes on the 18th of September the consequence will be enormous for Britain, the EU and the world. In Britain it will mean the end of any chance of Labour wining power as it is the phalanx of Scottish Labour MPs sitting in the House of Commons who have provided Labour with a majority.Bboth England and Scotland will have to invent new forms of governance and taxation. There may even have to be border checks on the roads going from Scotland to England.

There is the question of what currency the Scots will use. Mr Cameron will be seen as the prime minister who broke up the United Kingdom, and almost certainly have to resign after such a historic defeat. The Labour Party whose leaders have been at the heart of the campaign to defeat the separatists will collapse into recriminations, despair and disarray for a generation or more.

At the European level there will be a question of whether Scotland can continue as a member state or whether as a new created nation it has to apply anew for membership of the EU including adopting the euro as its currency.

The forces for separatism in other EU member states notably Catalonia, will be greatly encouraged. The chances of Brexit increase as the anti EU forces in England will cite a Scottish separation from England as a precedent for an English separation from Europe.             At a global level, what is left of England will be seen as a diminished, enfeebled power. The UK’s nuclear submarines will have to find new bases in England, and Britain’s military profile will reduce in size. Some may question whether the permanent seat on UN Security Council granted to the victorious United Kingdom at the head of commonwealth nations and imperial possessions in 1945 should be automatically transferred to amputated England.

Tory and Labour leaders in London are now panicking and talking of offering more devolution and powers to Scotland if only, please, please, they reject independence in the vote on 18th September. That offer might have worked years ago but is probably too late now.

Even if there is a narrow vote to maintain the union the Scottish separatists will simply declare it to be a half time result and come back in due course. The challenge of the British state as it has evolved since the 1707 fusion of the two nations is now massive. Whatever happens, Alex Salmond, the Scottish nationalist leader, has won and the London political establishment has lost.

Denis Macshane is the UK’s former minister for Europe.


Article in The Tablet on Rotherham 6 September

Article in The Tablet published 6 September 2014 (published with some small edits)

When some future David Kynaston, the great social-economic-cultural historian of the post-war years, comes to write a history of the recent era there will be a special chapter reserved for Rotherham.
Rotherham represents an entire failure of politics, government, policing and state agencies. More importantly it raise moral questions but why in Britain we allowed such evil to sink roots.
The usual rent-a-quote MPs are out demanding that heads should roll and some should. But they are the heads of senior police officers who refused to listen to the pleas of abused children. They are the heads of state prosecutors who have allowed sex crime, including massive internal and external trafficking, to continue unchecked.
They are the heads of the liberal establishment – Tory as much as Labour – who in their understandable wish not to be described as racist or Islamaphobic turned a blind eye to the often rampant misogyny and denial of equality to women in the deeply masculinist and patriarchical Kashmiri Muslim community.
Blaming imams is an easy shot like blaming every parish priest in Ireland for the church’s paedophile shame.
The question of crime and the question of culture need to kept separate even if the former grows out of the latter.
As one of Rotherham’s three MPs from 1994 until 2012 I was never told about the criminal activities of some taxi drivers, who drove young girls to places where they were abused, until the crimes led to court cases.
MPs on the whole do not know about crimes taking place in their constituencies. No one came to my surgery to report an abused child. But is the “I didn’t know, No-one told me” line a sufficient excuse?
Let me start with a personal confession. I have to accept my shame in the way I abused the MPs’ expenses system that led to me spending time in Belmarsh and Brixton (at least the Old Bailey judge was kind enough to say that I had made no personal gain and I had been cleared by a 20 month Met inquiry until MPs got to work). But that shame is as nothing to the shame I feel today that in my two decades as an MP I did not notice, sense, intuit what was going on within my own constituency of Rotherham involving members of the Muslim Kashmiri community.
My youngest child was born just after I became MP for Rotherham in 1994. He and his three sisters went out to play in parks in the town or went shopping with their grandmother without the slightest sense of worry or concern, so friendly are Rotherham folk of all backgrounds.
Yet underneath this friendly surface something evil and rotten was growing. Rotherham is poor. There is little economic hope. The youth unemployment rate amongst the 8,000 strong Kashmiri community is twice that for white school-leavers. So-called arranged – in truth compulsory marriage with cousins from Kashmir brought into new immigrants with no English from backgrounds of peasant poverty where women had no status or rights. Under Labour as under the Tories the Rotherhams of the north were ignored. The focus was on banking, financial services, and what was never discussed – the explosion in the lucrative sex business.
Scotland Yard says there are 2,000 brothels in London full of imported or trafficked girls and women. The Scottish Police earlier this month said there were 3,000 women working in brothels in Scotland. The internet porn business is hugely profitable. The sexualisation of childhood and the obsession of much of the media industry with selling images of women’s bodies to be gawped at in order to make money has made Britain notorious amongst modern democracies.
Kashmiri taxi drivers like their white equivalents looked at Page 3 of The Sun and got the message that women’s bodies were tradeable goods for male pleasure and profit.
Liberal-left bosses of the Crown Prosecution Service did little to encourage police and prosecutors to take action. A law was passed in 2009 making it a crime to pay for sex with a coerced or trafficked teenager. Most Rotherham victims fell into that category. In 2013, just nine prosecutions resulted in convictions. As with rape and domestic violence, the failure of the CPS and police to tackle the abuse of women and teenagers is a permanent shame.
South Yorkshire police was able to deploy hundreds of officers to protect the English Defence League as it organised its Muslim-hate marches in Rotherham. But the police could find no one to go undercover and break up the taxi driver grooming rings that were preying on girls from the late 1990s onwards. The first Home Office inquiry into this problem was in 2001. Its funding was cut and the researcher fired. If the Home Office could go into denial about the problem why should local government officials be braver?
A month ago the Economist called for prostitution to be treated like any other economic activity. Those Rotherham taxi drivers who took young women to service men in other towns in exchange for money would nod their heads in agreement.
I became aware of the Rotherham problem only after a great journalist, Andrew Norfolk of The Times, began his investigations. Norfolk was based in Leeds where a giant BBC newsroom sits. The journalists there did not look into what was happening but nor did the journalists on any local or weekly papers in South Yorkshire.
In Rotherham the political elites hated Andrew Norfolk. I saw powerful evidence of this in one meeting with leaders of the council and my fellow Rotherham MP Kevin Barron in Rotherham Town Hall where The Times journalist was aggressively denounced. I blew up. ‘For heavens’ sake. He’s a reporter. He reported what happened. We should be asking how it happened under our noses not blaming the messenger.’
This culture of denial pervaded police, prosecutors and politics. Jimmy Savile and Rolf Harris benefited from it. The Guardian in 2009 reported that trafficking into and inside the UK was a ‘moral panic’ and did not exist. I had a spat on Newsnight with the great Jeremy Paxman, the voice of the liberal establishment, as he argued the Guardian line and I tried to explain that the exploitation of prostituted women, especially those trafficking within the UK, to service man should be taken seriously.
The Rochdale MP, Simon Danzcuk, has written a fine book on how the Liberal Democratic establishment protected a serial child abuser, Sir Cyril Smith, a firm favourite of the BBC in his prime. But Rochdale like Derby, Oxford and Greater Manchester also have seen Kashmiri Muslim taxi drivers and others convicted because, as in Rotherham, the state agencies were in denial for years about the abuse of young females to make money for taxi driver pimps. MPs love castigating dead opponents for their depravity but few MPs are willing to confront contemporary abuse of women by their own voters.
One brave MP, Ann Cryer who represented the Yorkshire constituency of Keighley from 1997 till 2010, spoke out about the sexism and oppression of young girls and women in the local Kashmiri communities. But Labour MPs in the region disparaged her behind her back. A friend who wrote about politics for the Guardian told me he tried to get a friendly article about Ann into the paper but the editors refused to run it.
Now some of the truth is out. But no one comes out of this well. Police who refused to investigate. Town hall chiefs who earn more than the prime minister sitting on reports. Politicians attacking the press, a liberal-left media and a political-media establishment now full of denunciation but unwilling to look in the rear-view mirror unwillingness to think differently about an issue involving race and minority ethnic communities.
There was something rotten in Rotherham. But it was part of a wider culture of denial about dark sides to modern Britain that we are scared to confront for what it reveals about ourselves.