Denis MacShane: Don’t blame the euro... this crisis is the fault of our millionaire masters

Again and again, ministers and their echo-chambers in the commentariat blame Europe for Britain’s shrinking economy. It sounds convincing as the word “Europe” and “crisis” are now co-joined in headlines and on news bulletins. But can the euro really be blamed?

Several euro using countries like Germany, the Netherlands, Finland or Slovakia are posting very solid growth. Greece and Ireland are in deep trouble but are not major segments of the overall EU economy.

But more interesting is the relatively strong economic growth of the NEG (Non Euro Group) nations.

Here are some GDP growth figures from EU member states which do not use the euro – Sweden 5.5 per cent, Poland 3.8 per cent, Denmark 2.1 per cent, Czech Republic 2 per cent, Lithuania 1.3 per cent, Romania 1.3 per cent, UK 1.2 per cent.

These are 2010 figures and have changed in the course of 2011. After 18 months of the Cameron-Osborne stewardship of the economy, the UK growth rates have slumped still further while Sweden and Poland, both under centre-right governments, have increased economic activity.

So if the eurozone’s troubles are to blame for the UK’s poor economic performance what explains the much better performance of other NEG nations? The answer lies in the bizarre choice of economic levers Cameron and Osborne decided to pull after May 2010.

There was no doubt that some retrenchment was needed. But the off-the-shelf cuts adopted from a 1980s Thatcherite model have robbed business of the most important factor in any investment, hiring or expansion decision – namely the confidence that there will be buyers out there to purchase goods and services.

Tory MPs demand a further reduction of rights for workers and women in order to reboot the economy.

Yet almost without exception the strongly performing euro and NEG economies are those with higher workplace partnership policies and full respect for EU social charter rules which Europhobe MPs are so keen to repatriate or renegotiate – which in plain English really means to reduce and preferably eliminate.

It may be understandable for right-wing Tories to support renegotiation and repatriation but it is hard to work out why some Labour MPs are also signing up for this anti-EU line.

The Tory MP, Liz Truss, has written of the UK’s hour-glass economy with too many super-rich at the top, and too many grindingly-poor at the bottom and not enough middle-income earners in between. But Cameron’s background and ideology are rooted completely in believing that the rich have to be looked after first, second and last.

The cabinet has more .millionaires in it than any government in the OECD.

In itself personal wealth does not make a minister nice or nasty. But the attacks on the squeezed middle, to use the brilliant description first coined by John Healey MP, from the hikes in student fees and the removal of EMA, to the rise in energy prices by profit-gouging companies percolate through the economy as no-one has much confidence in the future.

A few weeks ago, I received a letter from Danny Alexander after I raised in the Commons the problems of the Osborne pound which has the weakest purchasing power of the national currency since the foundation of the Bank of England in 1695.

Alexander told me that the weak pound would help boost exports. But the latest trade figures show the biggest trade gap in recorded history. After 18 months of Tory economic stewardship, we export less and less and import more and more.

The Commons has also been debating rising fuel prices. Middle England, as it fills up at petrol stations is hit in its wallets by the Osborne pound which daily imports inflation into Britain.

Elsewhere in Europe, politicians of the left and right are fully aware of the gravity of the generalised crisis of the democratic world’s market economies.

Unlike the 1930s, when every country rejected cooperation in a sequence of beggar-my-neighbour nationalist solutions, the present crisis is seeing key nations trying at least to work with each other. France and Germany are talking and trying to cooperate even if they have divergent views given the differences in political culture and economic profile.

Sadly, Britain is largely isolated from this EU cooperation. David Cameron has to wait for the Commons to go into recess before flying to Berlin to meet Mrs Merkel. He says one thing in Westminster to appease his Farageiste backbenchers while trying to portray himself as a cooperative EU partner when in Paris or Berlin.

For more than a decade he, William Hague, IDS, and other Tory leaders have told the nation that Britain needs to detach itself from Europe. They have insisted on their three Rs – Referendum, Renegotiation and Repatriation – and whipped up anti-EU sentiment amongst their own MPs and in the media.

Cameron even ditched Tory partnership with traditional centre-right parties in Europe when he opted for a weird alliance with ultra populist and nationalist rightist politicians described by Nick Clegg as “nutters, anti-semites and homophobes.” You cannot insult political partners and simultaneously claim you want to work with them.

Britain under Cameron and Osborne thus suffer from the having the lowest growth of Non-euro countries, the highest inflation of any major EU economy, and an isolationist politics that blocks seeking cooperation in Europe to work out common solutions to the crisis.

It is all too convenient and easy to blame Europe for what are simply poor economic policy decisions taken by the anti-European millionaires who now govern us. There is one EU economy which is doing far worse than the UK – Norway which lies outside the EU.

Europe may not be the solution though it is fair to ask if there is nothing we can learn from economies that out-perform us? But the argument that the EU is the problem or responsible for all British economic ills is simply wrong.

• DENIS MACSHANE IS MP FOR ROTHERHAM AND FORMERLY MINISTER FOR EUROPE