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The pound or euro argument

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Issue 1702

What do socialists say?

The pound or euro argument

By Chris Harman

THE ISSUE of abandoning the pound for the single European currency, the euro, helped tear apart the Tory governments of Thatcher and Major. Now it is causing mayhem in the Labour cabinet. Meanwhile William Hague is ranting about defence of the pound along with his tirades against refugees, his call for even more prisons than Jack Straw is building, and his support for discrimination against gay people through Section 28.

Most ordinary people are a bit bemused by the whole argument. It seems remote to them. After all, if you’re on the minimum wage of 3.70 an hour or on the pitiful Jobseeker’s allowance, it does not make much difference whether you get it in sterling or euros.

It’s not the pound in your pocket that worries you, but getting more pounds in your pockets. On this, all sides in the official argument over the euro are agreed. They say that “throwing money at you”, whether it’s a few quid or a few euros, is not on, since it would mean taxing both pound and euro millionaires. The issue is important, however, for one very small group in British society-the thousand or so very rich people who sit on boards of big companies and, through this, control nearly all of British industry.

They are agreed on the need to make still more money. And that means pushing up profits by holding down wages, cutting into welfare benefits, restricting unions, and making the rest of us work harder and longer. But they are divided down the middle on whether this “flexploitation” should take place through the euro or through the pound. Some of them make their money mainly through investments and sales to continental Europe, while others make it through investments in the US and east Asia.

In the first camp are big companies like GEC, ICI, Corus, and Japanese subsidiaries like Nissan and Honda. In the second camp are other giants, and especially the media conglomerates owned by Rupert Murdoch of Sky and the Sun, and Conrad Black of the Telegraph. Each has been lining up business organisations in its support. Each has been cultivating mainstream politicians and using their newspapers to popularise their case in the crudest terms.

And each has been getting trade union leaders on its bandwagon, claiming its worry about profits is really a worry about jobs. The pro-euro camp say that Japanese and American companies will not invest here unless Britain is part of the euro. This message is accepted by Sir Ken Jackson of the AEEU engineering union and John Monks of the TUC. They claim that “Europe” is more favourable to unions than British governments have been. Meanwhile, the anti-euro camp claim that “British people” would lose influence over the economy if decisions were made by the European Central Bank. They claim that policies made for Europe will not fit the particular circumstances of Britain.

Much of their language is Tory language, aimed at showing Britain is more favourable to enterprise than Europe. But they also try to cultivate friends on the left by talking about a “loss of parliamentary control”. Both camps accept that major decisions affecting jobs are made by people under no democratic control whatsoever. There is no democratic control over the European Central Bank, but there is no democratic control over the Bank of England either.

British big business is motivated entirely by the drive for profit, but so are European firms like BMW and Peugeot. The papers that call to “save our pound” also boast about how flexibility has made British industry more profitable since the weakening of union power under Thatcher.

Pro-European politicians like Stephen Byers, Peter Mandelson and Kenneth Clark meanwhile boast they are leading Europe in adopting the flexibility agenda. We are faced, in reality, with a row between two gangs of thieves. Each says things about the other which are true. But neither stands for the interests of the rest of us.

Our allies should not be one set of bosses rather than another. They should be all those across Europe and elsewhere who are resisting flexibility, privatisation, job losses and welfare cuts. We should say, “No,” loudly and clearly when Murdoch and Hague urge us to rally round to “defend the pound”.

But we should also say, “No,” just as clearly when Mandelson and Byers urge us to put our faith in the non-elected European Central Bank. When thieves fall out, it can provide a wonderful chance for their victims to fight back, but only if they don’t make the mistake of supporting one mafia gang against another.

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