Jonathan Todd

Before Christmas, I was disappointed to notice on Luke Akehurst’s blog that the BNP enjoyed a large swing in their favour in a by-election to Cumbria County Council. I know that the turnout was very low but, given the lack of BNP presence in Whitehaven previously, I was rather taken aback.

This came back to me today when seeing Denis MacShane’s call to beware the European street. The main employer in Whitehaven is, of course, Sellafield, where, as Michael White notes, “they hope to revive the flagging local economy by helping build new nuclear plants – and want most of the jobs to go to their own pool of skilled workers”.

Those closer to the Cumbrian street may have a better idea how many of the illegal strikers at Sellafield voted BNP in December. I grew up in the area but can now only note that the BNP are the only political party to have supported the strikes, wonder and worry. Certainly, David Aaronovitch is right to draw attention to “the half-truths” that have fanned the spat of strikes and Gary Becker has provided a massively coherent critique of protectionism that would be very warmly welcomed both by Peter Mandelson and in Davos.

But Davos is a long way from Whitehaven. The facts on the ground, to appropriate another phrase with a Middle Eastern origin, in Whitehaven may feel to many in Whitehaven not so far removed from the facts on the ground in Lincolnshire, where Janice Turner claims, “the skilled oilmen of Lindsey now find themselves flotsam and jetsam on the economic tide”. But facts, as Aaronovitch points out, are not what have fuelled the strikes. Nor are facts the currency of the BNP. They are what the people of Whitehaven and Lincolnshire richly deserve, however.

Equally, they do not deserve ‘social dumping’.  Just as there are perfectly legitimate economic arguments against parallel trade, which an economist can support without parting company with Becker’s arguments against protectionism, so too one does not need to deploy political arguments to oppose both ‘social dumping’ and protectionism. There are strong economic arguments for a position that distinguishes between protection and protectionism, as Peter Mandelson has previously said. These economic arguments form the basis of the political case that Labour should be taking forward to win back streets in place like Cumbria.

However, ’social dumping’ would not have occurred at the Lindsey Oil Refinery on Humberside if, as Total claim, the Italian and Portuguese workers’ wages are the same as other equivalent jobs on the site. The facts of this claim are to be established by Acas. The reason why this claim is suspected was identified by Peter Hain in the Commons on Monday.

“I still find it puzzling that European companies can bring their labour in, meet all the costs of accommodating and transporting them—both to this country and to and from work—and still claim to abide by national pay rates and conditions of service. That does not seem to add up, and I wonder whether the real answer to that puzzle is to be found in the fact that these subcontractors subcontracted all the way down the line to a point at which nobody really knew whether the workers concerned were being exploited or whether local workers were getting the justice and fairness to which they are entitled”.

The decisions of the European Court of Justice (ECJ) on the Posted Workers Directive mean that the government cannot require that firms abide by national pay rates and conditions of service in respect of posted workers. The verdicts of the ECJ mean that legally such workers are only entitled to the local minimum pay rates and conditions. However, as Hain pointed out, the wages at Lindsey are “many times higher than the minimum wage”. This certainly leaves scope for such wages to be undercut and ‘social dumping’ to occur. There is no inconsistency between recognising the unfairness of this and arguing, as Hain did, “that right-wing anti-Europeanism and protectionism would be disastrous for British workers”.

There has long been talking on the left of building a fairer form of globalisation, while, there is also much to fear from the recent trend towards de-globalisation. Globalisation is more likely to avoid going into reverse if it can be made fairer and seen to be so. Part of what this involves is ironing out any tensions between protection, which avoids ‘social dumping’, and protectionism, which causes a different kind of harm. Davos may be a long way from Whitehaven but the right mix of providing protection and opposing protectionism requires that this distance is minimised.