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The UK Review of the Balance of EU Competences

Submitted by on 25 Nov 2013 – 12:54

By Dr Martyn Bond, Visiting Professor of European Politics and Policy at Royal Holloway, University of London

Much of the current public discussion of the UK’s role in the EU is based on very selective or inadequate evidence. At the popular level it often relies on simplistic sound bites and distorted statistics. There appears to be little that is both easily accessible and authoritative about the potential cost of a policy decision that could fundamentally change so important a relation as that with our European neighbours. As Lord Jenkins famously complained more than a quarter of a century ago, the debate about Europe tends in Britain to be obsessive without being illuminating.

In their 2010 Coalition Programme the governing parties pledged to “examine the balance of the EU’s existing competences”, and in July last year the Foreign Secretary announced a government review of just that. He asked all departments to draw up a Domesday Book, examining what powers the EU currently exercises and how they affect the UK.

The political context for this review was opposition among some Conservative MPs and their constituents to the Conservative leadership’s soft line on Europe, as well as the increasing popularity of UKIP, which appears at least in part attributable to its hard line on the EU. In response, mainstream Conservatives have criticised the EU and demanded reform, and in the document laid before Parliament in July last year, the Foreign Secretary declared, “Today’s Europe needs reform more than ever. It has considerable achievements to its name, but also has real flaws, and now needs to adapt its ways very significantly to meet current and future challenges.”

According to the FCO, the EU needs to reform firstly to meet the challenges of competitiveness, growth and employment brought by the acceleration of globalisation. Secondly it needs to develop a stable Eurozone, currently recipient of 40% of British exports, which is vital to the UK’s own economic recovery. And thirdly it needs to increase its democratic legitimacy, now allegedly at an all time low, and also to ensure greater accountability, transparency, efficiency and probity.

The Foreign Secretary has asked departments across government to bring together all legislative and regulatory documents that relate to the EU, and to assess their impact on the UK. The FCO, which is co-ordinating the exercise in close co-operation with the Cabinet Office, described the review as “an audit of what the EU does and how it affects the UK…. It is important that Britain has a clear sense of how our national interests interact with the EU’s roles, particularly at a time of great change for the EU.”

At its simplest, this exercise might have been little more than a listing of EU primary and UK secondary legislation, and would have made remarkably dull reading. But the Conservative leadership needs more than that both to calm unruly backbenchers now and to differentiate the Coalition parties before the next election. It needs more than just a quantitative audit; it needs a qualitative assessment. Will this review deliver that?

However much you might like or loathe EU-inspired laws and regulations, their listing would – in legal terms – simply be a tally of the status quo. But if the audit also includes how it affects the UK, then it is – at least potentially – entering onto highly contested political ground. The document laid before Parliament tried to square this circle by claiming, “The review will not be tasked with producing specific recommendations. It will not prejudge future policy and it will not be asked to look at alternative models for Britain’s overall relationship with the EU…. A final decision will be taken closer to the time on how to draw together the analysis produced during the review, in the light of the EU’s rapidly changing situation….. It will simply provide a thorough analysis of what our membership of the EU means to our country and our future, an analysis which is currently notably absent.”

Now we have the first analyses in six policy areas, delivered in July this year and covering foreign policy, the single market, taxation, human health, the health and welfare of animals and food safety, as well as development co-operation and humanitarian aid. A further twenty-six assessments are to be published before the end of 2014, as and when departments complete consultations on their specific responsibilities. The whole will be ready just in time for the 2015 elections.

European Voice, the weekly newspaper in Brussels that closely follows EU matters, commented on the low-key launch of the first six reports: “The reports, drafted by civil servants, steer clear of any overt political stand-point or conclusion. Such conclusions would have been highly problematic, because the two parties in the coalition government – the Conservatives and the Liberal Democrats – are not united in their attitude to the EU.”

But if you look further you can find subtle and not so subtle differences – alongside plenty of political reticence – in the six reports.

Some of the issues are of course “no brainers”. In tax matters, for instance, the Treasury report concludes, “UK policy places priority on ensuring that the Government retains maximum flexibility to shape UK tax policy to suit UK economic circumstances. In line with the Coalition Agreement, the Government opposes any extension of EU competence in the area of taxation. Therefore, the Government believes that tax matters should remain subject to unanimity and upholding the veto on tax is a key priority.” Any other conclusion would certainly have made the headlines.

In the report on animal health, however, you can read between the lines that DEFRA and the Food Standards Agency are less antagonistic to the idea of reforming change in the EU. In its introductory paragraph the DEFRA report echoes the earlier document laid before Parliament, but stresses that the review will serve to “provide a constructive and serious contribution to the national and wider European debate about modernising, reforming and improving the EU in the face of collective challenges.”

DFID was even more strongly supportive of working with the EU on development aid issues. Approving the current division of competence between the EU and the national authorities, the DFID report underlined the fact that one piece of evidence submitted to it in its consultation called for “a strengthening of EU competence in humanitarian aid in the interests of ensuring that the efforts of all donors are fully in line with each other.” Its list of five advantages of working through the EU also reads substantially more positively than the five balancing disadvantages it subsequently listed.

BIS was also bullish about the benefits of the Single Market. Its report ran through the historical development of the Single Market, its legal framework and also its impact on the UK’s national interest, noting that “most studies suggest that the GDP of both the EU and the UK are appreciably greater than they otherwise would be, thanks to economic integration through the Single Market.” It concluded that integration “has also spread the UK’s liberal model of policy-making more widely across the EU.” On balance it concluded that, in answer to the question whether the trade-off between cost and benefit, between economics and politics was of overall benefit to the UK, “most observers, and indeed most of the evidence received for this report, answer positively.” But it cannily reserved its position as far as reporting on the four freedoms – free movement of goods, of persons, of services and of capital – was concerned. They will be the subject of future reports, the first two later this year and the latter two in 2014.

The FCO’s own report on foreign policy hedged its bets. It underlined the complexity of the foreign policy problems addressed by the EU: human rights in Burma, the Arab Spring, Iran’s nuclear ambitions, restoring order in Mali, ensuring long-term stability in the Western Balkans, case studies which showed how security and defence interests were increasingly interdependent with broader aspects of foreign policy such as trade, energy, transport and environment. The balance of competence lies squarely with the member states in this area of policy at the moment, not with the EU; all decisions are made by unanimity and each state retains the power of veto. Nonetheless, the FCO report went on to say that, based on the evidence, “it was strongly in the UK’s interests to work through the EU in a number of policy areas.” As a large, wealthy and militarily powerful member state, the UK has the advantage of a complex network of alliances and partnerships beyond the EU through which it can also work, but the report concluded that it would need both a reformed and more efficient EU as well as the diversity and flexibility offered by these other networks in order successfully to “tackle the challenges and harness the opportunities of the twenty-first century”.

Little wonder that the launch event was low key and the media coverage sparse. The message is mixed, and unexciting. The reports call for reform without being specific; if they favour any extension of EU competences, they generally do so implicitly rather than explicitly. So far they have underlined the advantages of current arrangements, which may not please the vociferous minority in Parliament that wants to end our relationship with the EU, but probably reflects the experience of civil servants who live with the reality of European integration daily rather than politicians who make speeches about it at the weekend.

By laying out the facts and refraining from partisan commentary, the first six departmental reviews of EU powers may not have solved the Coalition parties’ desiderata completely, but they have at least paved the way for a more informed public debate, dragging the argument away from the obsessive and bringing it nearer to the illumination that Lord Jenkins wanted long ago.