Speech by Minister for Europe, Jim Murphy, to the Anglo-German Foundation on 5 December 2007 in London.

'A New Deal for Europe'

When Franklin Roosevelt launched the first New Deal in 1933, it was to deal with a great depression. When Tony Blair launched Labour's New Deal in 1997, it was to deal with the entrenched and intergenerational unemployment brought by two recessions in a decade.

Previous New Deals have been about failure.

In Europe today, we don't need a New Deal to pull us out of recession. We need a New Deal to ensure our continued success.

The conversation over the last seven years has been dominated by extremely complicated, lawyerly debates about addressing the so-called 'democratic deficit'. As I witnessed the debate as a Minister in other Government Departments the argument appeared to be that people across Europe were becoming increasingly disenchanted with the EU, so a new institutional settlement was needed to fire their enthusiasm. And enlargement made this challenge even more urgent.

My sense was accurate. Public support for Europe has fallen. From a peak of 57% in the early 1990s. One of the most damning statistics is that only 37% of UK citizens say they recognise the benefits. That is about the same as when we first joined.

And this is not just a problem in the UK. Among the founding members - in France, in Germany, in the Netherlands, support is at its lowest-ever levels.

So as I say the diagnosis was accurate the prognosis has at times been one dimensional. A seemingly endless debate about structures will weaken the foundations of support still further amongst citizens. For me it is not about dealing with a perception but instead its about resolving the problem.

Changing our approach to delivery can deliver a changed attitudes.

We need a New Deal to create more jobs, to look outwards to the rest of the globe, addressing our shared responsibility for climate security and driving forward the transition to a low carbon global economy.

This is our vision of a global Europe. A Europe which is built on openness, fairness, equality and co-operation.

Europe's great strength is its shared social values. To preserve these, we must continue to fight against Beveridge's five evils - idleness, squalor, disease, poverty and ignorance.

National governments will remain at the forefront of this battle.

Last month, a highpoint of my visit to Berlin was the opportunity to discuss economic and social issues. I was intrigued by the intense political debate playing out in Germany on Agenda 2010 - the series of reforms, linked to the Lisbon agenda - to improve economic growth and reduce unemployment.

But the EU has an important role. The Single Market is a vehicle, above all, to generate wealth. Wealth which will create jobs. Wealth which will fund social progress and the wealth that comes from climate security.

Europe has shown leadership on climate security. We know that we can't combat sea level rise simply by constructing higher and higher flood defences, we need to address how the patterns of our lives are affecting the world's climate.

By the same token, we should not look to use the Single Market as a bastion against global competition. As a sea wall against the dominant trends in the rest of the world.

It won't work.

Instead, we must open up the European Economy to new opportunities for growth and jobs. Openness will create new wealth not just in Europe but also in some of the poorest parts of the world.

Just as it has in climate security, the EU must lead by example in its commitment to free trade and open markets.

A vibrant European economy will reward hard work; it can create opportunity for all whatever their background; it can alleviate poverty and need; and it can meet the rising aspirations of today's young Europeans.

How do we achieve this?

Europe is in the age of globalisation and it is faced with hard choices. I know that many people in Europe fear global forces - they fear climate and energy insecurity and they fear the global economy, particularly if they see manufacturing jobs moving to lower cost sites in Asia.

Europe's leaders have to choose between short-term fixes of protectionism and setting the agenda for a sustainable future.

We will have an ageing and shrinking workforce population. An ageing workforce. For example, while there are currently around four people of working age for each person of pension age in the EU, there will be fewer than two people to support every elderly person by 2050.

There has been reform but we must do more.

In 1923, J M Keynes, the great Economist, said, "in the long run we are all dead". Still true of course, just that the long run got longer. It is almost a century since Keynes made this remark, and men's life expectancy has risen from 43 to 75. When universal old age pensions were introduced in 1909, only a minority of people would have even survived to claim it.

Now the average male has 10-15 years of pension. And the average woman 21-26 years. This is real progress and cause for celebration. But it still begs some questions:

In the light of falling birth rates and people living longer, the old way of thinking is a ticking time bomb. There is no simple answer to this demographic conundrum. But one thing is crystal clear - collectively, we cannot afford the levels of unemployment and inactivity that plagued the UK in the 80s and still exist in parts of Europe.

There is no EU-wide quick fix or a single model that works for everyone. European countries are, and should remain, responsible for their own labour market policy. But as Wim Kok, the ex-Dutch prime minister and author of a report on the Lisbon strategy said: 'A rising tide floats every boat'.

We have a collective interest in all of us getting it right.

In the UK, we brought in our own New Deal designed to address, first, youth unemployment, then other marginalised groups: a new deal for lone parents; for the over 50s; for people with disabilities.

We wanted to create an environment where people can move into wealth and opportunity, which did away with old divisions. Compare the poorest parts of Glasgow to some parts of London for example - there is a difference of 27 years in life expectancy.

It's impossible to legislate against poverty - if it was a question of making it illegal, we would have done so years ago. And you can't just throw money at it. For example, social inclusion measures account for €85 billion in the current financial perspective.

Can we honestly say it has been successful when 100 million people still living on the equivalent of €22 per day? It's not enough to just invest, we need to think carefully about the outcomes we want.

Poverty of aspiration can be as debilitating as financial poverty. Perhaps in long run, for some, more so. I see welfare systems as an active tool of inclusion, to help people get back on the ladder of opportunity.

If we focus on social mobility, we can harness people's own desire to move on, to do well. Every child should have the opportunity to develop the full range of their talents, and every adult should have a second chance to develop their skills.

It's not just about getting people into work but keeping them there. It is crucial that we have a culture of life long learning.

Our concept of what 'basic skills' means has to change as well. An example, 20 years ago, if you were a stock controller in a warehouse you would need good numeracy and literacy skills. Nowadays, you couldn't do the job without IT skills.

After the great social changes in the mid 20th century, when many working class children became middle class adults, in the UK, the forces of social mobility seized up in the 1980's and 1990's. The government has worked hard since then to remove barriers to social mobility and offer everyone in this country choice and flexibility. We want to keep the middle classes expanding through good schools, alleviating poverty and maximising flexible parental employment.

At a European level, the Lisbon Agenda is a ten-year strategy to create opportunity for Europeans.

It is a strategy to create better jobs, wealth and lifelong skills. To make Europe competitive. But there are still gaps to bridge if we are to achieve our common goal.

EU living standards continue to lag behind the US. The EU 15, the richest European states, have income levels 30% below the US.

As European leaders sign the new Treaty of Lisbon, they need to end the long and protracted discussion on institutions and look back to another Portuguese Presidency: I'm much more driven by the Lisbon strategy than the Lisbon Treaty.

A strategy that isn't about majority votes or the jobs of Commissioners, but the careers of our citizens. About raising skills and aspirations, about Europe becoming once again the global centre of innovation and research.

The only way to ensure economic and social progress is through raising participation in the labour market.

This is economic efficiency. But it is also social justice.

In the 1940's, Beveridge asked why sickness and poverty are intertwined. 50 years on, too often they still are. 16% of the EU's working age population consider themselves to have a longstanding health problem or disability. How many of these are actually able and willing to work? Surely it's not wrong to ask and offer help?

We have a raft of equal opportunity legislation, yet women are still under-represented in the labour market and, on average, earn 15% less than men.

So what is the solution. Do we continue the same path, relying on short term fixes, clinging to an old style system which is growing ever more unsustainable, as less people in work pay more for those who don't?

Europe must stay defined by its values of social justice and social inclusion.

But to keep this at our core, we need to find a model that works now and will work in 50 years time.

It is essential that right across Europe every one of us argues for reform and against unnecessary regulation in the Single Market.

We can become more innovative and entrepreneurial by opening up to competition, by stimulating research and development, by improving skills and helping Small and Medium sized enterprises gain access to capital.

Reform is needed of Europe's system of intellectual property rights to improve incentives to innovate. We need to capture and pursue future knowledge, particularly climate change technologies. And it is important that the EU and its Member States continue to take tough action to tackle unnecessary bureaucracy and red tape.

The new global economy will be knowledge intensive as much as the old economies were labour intensive.

That is why we need an urgent European skills review that examines the long-term skills needs and priorities. This review should focus on new realities rather than old certainties.

As part of the fundamental review of the EU budget, we need to ask ourselves where is social spending going to do most good?

The economic evidence tells us that - momentous as the challenge of climate security is - meeting it is both technologically feasible and economically rational.

Europe can show that economic success and climate security are compatible. We can use the biggest rules-based market in human history to create important markets for innovative goods that reduce energy consumption. We can trade carbon and we can take action to make radical cuts on European emissions.

The Emissions Trading Scheme is already the model on which a global carbon market is being built. Can we also provide the policies, finance and innovation to deliver the other elements of a low carbon, high growth future?

Our climate security is as strong a factor on wellbeing as a secure job and a strong social framework. Europe needs to work on delivering all three of these elements.

In the past, in the UK there has been a tired left-right split. It was argued that we couldn't have economic success and social justice. We won that argument. Today we must argue that we can have both economic success and climate responsibility. In truth you can't have social justice or economic success without climate responsibility.

These things are linked. And it is through strong economic and environmental policies that we will forge a new deal for Europe. A new era of social justice and global responsibility.

Britain & the EU

Notes for Editors

 

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