The case for federalism
David Marquand
So the crisis over Britain's contribution to the EEC Budget has been settled after all. Having marched their troops bravely and defiantly to the top of the hill — inflict- ing considerable damage on Britain's bat- tered European reputation in the process Mr Pym and Mrs Thatcher have now mar- ched them down again. Having insisted that they had to have a long-term settlement, they have now accepted a temporary one and a more niggardly temporary one than they demanded. If they had been prepared to concede last week what they have con- ceded this week, the unfortunate Peter W. alker would not have had to isolate himself from his fellow farm ministers, the increases in agricultural prices which were Pushed through by majority vote would have gone through unanimously, the danger of a debilitating theological argu- ment over the use of the veto would have been avoided and Britain would not have found herself trampling yet again over a number of sensitive Community corns. If our commanders in the South Atlantic had displayed a similar level of competence, the entire Task Force would by now be at the bottom of the sea. No doubt, part of the explanation is simply that the Task Force is in the South Atlantic, and that no one can pay equal at- tention to two crises at once. While real bat- tles are being fought in the Falklands, the metaphorical battles of Brussels and Luxembourg are bound to seem a little shadowy. The inner circle of ministers and officials who decide such matters have had More pressing things to think about, and because of this they have not thought about Britain's relations with the Community.
But that is only part of the explanation; and although it may be the most important Part in human terms, it is not the most im- portant part politically. If Mrs Thatcher and her colleagues bungled their European Policies only when they were distracted by mare deadly crises 8,000 miles away, the episode could safely be forgotten. Unfor- tunately, their handling of this episode is all of a piece with their handling of similar episodes in the past. Indeed, this episode has taken place largely because of their handling of similar episodes in the past. The
1982 crisis over Britain's budgetary con- tribution is the product of the settlement which ended the 1979-80 crisis and of the way in which the British Government ap- proached that crisis.
For the crisis is structural, not accidental. So long as nearly three-quarters of Com- munity spending goes on agriculture, Bri- tain is bound to be a large net contributor to the Community budget. So long as she remains one of the poorer Community countries, this state of affairs will be unjust in itself and, in any event, unacceptable to her. But so long as the Community remains a Community — so long, that is, as the principles set out in the Rome Treaty retain any influence on the conduct of Communi- ty business — pay-back mechanisms, of the sort through which successive British governments have tried to correct the in- justice of an excessive British budgetary contribution, will remain unpopular with our Community partners and suspect to the European Commission. And so long as pay-back mechanisms of this sort remain unpopular and suspect, British govern- ments which put their faith in them will have to engage in long and miserable squab- bles with the other Community govern- ments.
If endless squabbling is thought undesirable (and it is worth noting that there are a good many British politicians who do not find it in the least undesirable, since a series of good stand-up rows with their Community counterparts offer them the best available opportunity to prove their virility), only three options remain. One is to leave the Community altogether. That would be an economic and political disaster, on a scale normally experienced only after defeat in war, It may conceivably be preferable to the grudging, suspicious and half-hearted membership experienced since the fall of the Heath government in 1974, but it is not an option any sane man would choose if he could avoid it.
The second option is to cut agricultural spending. Not surprisingly, this is the favourite British option. Tired Treasury of- ficials reach for it automatically when they hear the words 'Common Market', rather as Goering used to reach for his gun when
he heard the word 'culture'. In theory, it has a great deal to be said for it. The com- mon agricultural policy costs too much, and a lot of the money is badly spent. The trouble is that a cut in agricultural spending large enough to make a significant dif- ference to Britain's budgetary position would effectively destroy the policy. That -might be popular in Britain. In most other Community countries it would be, not merely unpopular, but so unpopular as to be politically inconceivable. The fact is that the common agricultural policy is not going to be destroyed.
The only remaining option is to increase Community spending on the non- agricultural items from which Britain benefits, or could benefit if she played her cards with a modicum of intelligence. That would, of course, entail a bigger Communi- ty budget, not a smaller one. It would therefore entail a bigger gross British con- tribution as the price of a smaller — or perhaps even of a nil — net contribution. It would also entail new Community policies in the regional, social and industrial spheres, and stronger Community institu- tions to police and administer them. It would mean that functions currently exer- cised by national administrations in na- tional capitals would instead be exercised by Community institutions in Brussels and Luxembourg. And since the increased Community expenditure would have to be subject to proper parliamentary scrutiny and control, it would mean a transfer of power from national Parliaments to the European Parliament.
I believe that this option would be as good for the Community as it would be for Britain. But that is a matter for debate. Some member states may feel that the pre- sent lop-sided Community, in which the agricultural policy is the only policy of real budgetary significance, pays them better than a balanced Community would. Others may feel that the existing institutional struc- ture protects their interests so well that it would be foolish to change it. But although this may be true of some member states, it is manifestly untrue of Britain. The present lop-sided Community — agricultural giant, but industrial pygmy — is bound to impose a financial burden on this country, no mat- ter how loud our complaints or adroit our negotiating tactics. By the same token, the existing institutional structure, in which real power resides in the national capitals, has clearly failed to protect our interests. What- ever may be true of the other member states, Britain's interests can be pursued effectively only in a more balanced Com- munity, with a bigger Community budget and more powerful Community institutions.
This, of course, is what is sometimes known as `federalism'; and although federalism is in the interests of the British nation, it undoubtedly runs counter to the interests of the British state. That is why statist politicians have rejected it. Is it too much to hope we may one day have a Gov- ernment which puts the interests of the nation ahead of the interests of the state?
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