John Laughland
The leaked suggestion that the Government is preparing to counter European tax harmonisation by making concessions fits a depressingly familiar pattern. It only proves that relations with the EU are irretrievably locked into a futile cycle of detente followed by confrontation and then appeasement. When will we learn? However hard British governments try, after every new beginning, good relations with Europe last for at most two years before disillusion once again sets in.
After the announcement of the harmonisation plan reached by French and German Finance Ministers, Tony Blair should have realised that his attempt to influence Europe in a British direction had, like all previous attempts, failed. After all, he had categorically stated in January that tax harmonisation was not on the cards.
Mr Blair began his administration by signing up to the social chapter, and almost certainly promising to the Europeans in private that Britain would join EMU. This, he hoped, would signal a new dawn with relations with the Continent and enable him to evangelise the EU away from over-regulation. He also wanted to create a new British-Franco-German axis.
Instead, European policy continues to be decided by Paris and Bonn, while the re-emergence of old Left governments in France, Italy and Germany has thrust new Labour out onto the margins, economically speaking, of European politics.
Britain is now trying to square the circle by negotiating on the fine text of the tax harmonisation proposal, in the name of achieving things such as closing tax loopholes. It believes that outright opposition to any form of centralised control over tax will simply sideline Britain. Yet history shows that this tactic is doomed: both John Major and Margaret Thatcher also signed up to European commitments in pursuit of other British goals, only to find that the chimera of influence recedes as fast as you approach it.
Like Tony Blair, John Major began his administration with demonstrative concessions to pro-Europeanism. He had been the architect of Britain's signing up to the ERM only months before he became Prime Minister, in the process placing control of his economic policy in the hands of the Bundesbank. But the false bonhomie of his "heart of Europe" relations with Helmut Kohl lasted just 22 months, until the ejection of the pound from the ERM led to a bitter exchange of mutual recrimination between the Treasury and Frankfurt.
Mrs Thatcher practised her own detente towards Europe. She enthusiastically signed up to the Single European Act in 1986. But this thaw in relations lasted just 18 months, until April 1989, when the Delors report on monetary union was published. Her famous Bruges speech followed in September.
The key to the recidivism of successive British Governments lies in their failure to understand the logic of European integration. They cannot see that it is not law-based and thus that it can never be market-friendly. On the contrary, European integration is a political process designed to change the constitution of the member states, as the German Foreign Minister has explicitly said.
Negotiating on the details of tax harmonisation can never succeed. The imperative of "ever closer union" will always override legal niceties. As Professor Martin Seidel, the legal adviser to the German delegation at Maastricht and thus one of the treaty's co-authors, said this month: "The treaty is a lex imperfecta. In terms of its legal quality it is of little value. Its provisions have only an exhortatory character. You cannot make legal appeals against infractions of it."
The infractions of Maastricht have indeed already been gross. The famous convergence criteria were treated with contempt when Germany, Belgium and Italy were admitted to EMU, even though their debt figures are incompatible with the treaty's provisions. And the principle of independence for the European Central Bank was similarly infringed when Wim Duisenberg was forced to accept a split mandate with Jean-Claude Trichet in clear contravention of both the letter and the spirit of the text.
If such central elements of Maastricht can be cast aside in pursuit of the central goal, then it is obviously pointless for Britain to niggle away at details of the tax harmonisation plan. Any victories it achieves in the small print will have no more significance than the achievement of Mr Major and Mr Hurd in getting the world "federal" removed from the original Dutch draft of Maastricht. The fundamental difference between British goals in Europe (investment and free trade) and the reality of European integration (political union) can be resolved only by political will, not legal disputation.
John Laughland is the author of The Tainted Source - The Undemocratic Origins of the European Idea, Warner, £8.99.