In May 1999, the Trades Union Congress held a major conference on the impact of the European single currency on the UK. While a number of trade union leaders are calling for the Government to make a more positive commitment to joining the euro, a range of views were expressed at the conference, with many participants expressing concern about the implications of euro membership.
A one-day conference to discuss the UK's potential participation in the European single currency was held in London on 13 May by the Trades Union Congress (TUC) as part of its policy of encouraging debate and disseminating information about the euro. TUC general secretary John Monks and some key union leaders have been vocal in their support for UK entry into the euro but others in the trade union movement take a more "euro-sceptic" stance. The conference featured invited speakers both for and against the euro and a range of views was expressed by union participants.
The government's position
The opening speech was made by the chancellor of the exchequer, Gordon Brown, who emphasised that, having "declared for the principle of monetary union", the key question determining whether the Labour government would propose UK entry into the euro would be whether it would bring "clear and unambiguous economic benefits", including its impact on jobs. He outlined the five economic tests the government would apply: whether there can be sustainable convergence between the UK and the economies of the single currency; whether there is sufficient flexibility to cope with economic change; the effect on investment in the UK; the impact on the UK financial services industry; and whether joining would be good for employment - which Mr Brown described as "the most practical question" for the government and for millions of people.
The chancellor stressed that the government's approach to the euro was not "wait and see" but "prepare and decide". A major objective had been to encourage UK businesses to prepare actively for the euro. He welcomed the social partners' involvement in the government's planning process. The government's outline national changeover plan (UK9902184N), which sets out the practical steps needed for the UK to join the euro, was drawn up with the involvement of a high-level committee which includes representatives of both the TUC and the Confederation of British Industry, and social partner representatives have also been involved in euro forums in every region of the country.
Trade union views
In the course of two panel discussions - focusing on European economic, employment and social questions, and on the pros and cons of UK participation in the euro - diverging views were expressed by union representatives with a number arguing against adopting a "pro-euro" policy. Many of the concerns raised were from trade unionists from the public sector who argued that the convergence criteria for joining the single currency will have an adverse effect on public spending and in particular on jobs, pay and terms and conditions in the public sector. Other contributors supported euro-entry but stressed the need for the pound to come down to a realistic rate first, for the European Central Bank to be made more accountable and for its remit to include employment considerations. In addition, many delegates expressed the view that UK workers were not adequately informed about the key issues in the debate about joining the single currency.
Other signs of trade union opposition to the euro include the establishment of a group called "Trade unionists against the single currency", and an opinion poll commissioned by the anti-euro group Business for Sterling and the small Community and Youth Workers' Union and published to coincide with the TUC conference, which suggested that over 60% of union members would vote against UK membership of the European single currency. The TUC dismissed the findings, arguing that the poll was not an objective exercise but part of a "well-funded propaganda campaign".
Winding up the debate, TUC general secretary John Monks, who strongly advocates euro-entry, said that the TUC was also critical of aspects of economic and monetary union, including the narrowness of the convergence criteria and the lack of accountability of the board of the European Central Bank. However, he believed that, on balance, joining the single currency would be to the advantage of UK workers. He warned the conference that "the euro is now a reality ... The UK must not go on outside the European mainstream. It will be bad for jobs, bad for investment and bad for our prosperity if we stay outside." As well as the economic benefits, embracing the euro would also strengthen the influence of the "European social model" on UK industrial relations.
Mr Monks argued that "much more needs to be done" to win a yes vote in the planned referendum on the euro: "Flag-waving appeals to the emotions will always have a headstart against the cool, calm case for joining. The government's much-admired campaigning zeal must be fully directed at making the case for entry." A vital part of preparing to join must be a strategy to reduce the current exchange rate of the pound. He concluded by stressing that euro-entry was not an issue which could be "fudged", which was why he felt it important to make his own views clear.
John Edmonds, the general secretary of the GMB general union and chair of the conference, warned against "clinging to a romantic delusion about preserving the pound". He said: "Let's be realistic and recognise that the UK's national interest lies in being a full player in the development of Europe and plan now for UK entry into the euro."
Commentary
Following the negotiation of the Maastricht Treaty on European Union, the TUC supported economic and monetary union and in 1996 a TUC report concluded that if EMU went ahead the "balance of advantage" lay in the UK joining. Since then, TUC reports and congress resolutions have been more circumspect, a development which has coincided with the adoption of an anti-single-currency position by UNISON, the TUC's largest affiliate, and some other public sector unions, reflecting concern about the public spending implications of the Maastricht convergence criteria. The resolutions adopted by the 1998 annual congress of the TUC were broadly neutral on the issue of euro-entry, noting the potential advantages of membership of the euro (eg in terms of price stability, higher investment and a reduction in trading costs) but also expressing concern about EMU "resulting in institutionalised monetarism and cuts in public expenditure due to the Maastricht convergence criteria". Similarly, the TUC's January 1999 publication Preparing for the euro reviews a range of key issues concerning EMU without reaching a conclusion about the desirability of UK entry.
Nevertheless, the tone of the TUC's public comments about joining the euro has remained positive. The Amalgamated Engineering and Electrical Union, with its large manufacturing membership, supports early UK entry to the single currency, fearing that, outside the euro, the UK will lose inward investment and jobs. A number of other unions, including the GMB, are seen as being pro-euro. Some sizeable unions do not have an explicit policy on euro-entry, and in some cases left-led unions which might be expected to be "euro-sceptic" are said to be preparing to support the government's position. The 1998 congress called for the widest possible debate among affiliated unions about the single currency and the recent conference held by the TUC was intended as part of this process. It remains to be seen whether major differences between unions on the issue of the euro will surface at the next congress in September 1999. (Mark Hall, IRRU)