The UK Settlement with the EU.

A lot of claims have already been made about this new settlement, on both sides of the argument, but the devil is always in the detail.

On 10th November 2015, David Cameron sent a 6-page letter to the EU outlining 4 key areas the UK wanted to change:

  1. Businesses in the UK stay in the Single Market and must not be discriminated against because they use the Pound Sterling, the Bank of England runs our banking system and the UK does not contribute financially towards rescuing euro-zone countries that need bail-outs.
  2. Expand the scope of the Single Market and cut red-tape on businesses.
  3. End Britain’s obligation to work towards “Ever Closer Union”, National Security to remain the sole responsibility of Member States and bring in a new arrangement where groups of national parliaments, acting together, can stop unwanted legislative proposals.
  4. Crack down on the abuse of free movement within the EU (benefit tourism and sham marriages), so the UK proposes that people coming to Britain from the EU must live here and contribute for four years before they qualify for in-work benefits or social housing. And that we should end the practice of sending child benefit overseas.

The “New Settlement” comes in the form of a 37-page document from the European Council (EC).  Voters ought to read it, but most won’t.  However working through the detail reveals:

  1.  Page 3:3(iii) This Settlement is “legally binding [the day the UK votes to stay] and may be amended or repealed only by common accord of the Heads of State or Government of the Member States of the European Union”.
  2. The UK secured everything it wanted in Point 1. – notably Page [14] the ECB “only has authority over credit institutions located in Member States whose currency is the euro”.
  3. The UK only secured vague wording on Point 2. – [Page 16] “the EU will take concrete steps towards…lowering administrative burdens and compliance costs on economic operators, especially small and medium enterprises, and repealing unnecessary legislation as foreseen in the Declaration of the Commission on a subsidiarity implementation mechanism and a burden reduction implementation mechanism”.  Dream on if you think this will result in much action.
  4. The UK also secured an end to its’ obligation to work towards “Ever Closer Union”.  The EC agreed to enshrine in its next Treaty revision that [Page 17] “the United Kingdom is not committed to further political integration into the European Union” and [Page 13]: this  “will be voluntary for Member States whose currency is not the euro”.  National Security remains the sole responsibility of Member States (who may choose to work together from time to time).
  5. However the UK got nothing on its other demand in Point 3, groups of national parliaments, acting together, CANNOT STOP unwanted legislative proposals – all they can do is [Page 18] “Where reasoned opinions on the non-compliance of a draft Union legislative act with the principle of subsidiarity represent more than 55 % of the votes allocated to the national Parliaments, the Council Presidency will include the item on the agenda of the Council for a comprehensive discussion on these opinions and on the consequences to be drawn therefrom.  Following such discussion, and while respecting the procedural requirements of the Treaties, the representatives of the Member States acting in their capacity as members of the Council will discontinue the consideration of the draft legislative act in question unless the draft is amended to accommodate the concerns expressed in the reasoned opinions”.  Objecting on the basis of subsidiarity (laws being made at an EU rather than Member State level) is a million miles away from stopping unwanted legislation.
  6. David Cameron did pretty poorly on Point 4 too.  Most importantly, [Page 24] the UK has to go begging to the EC to be allowed to implement benefit restrictions (and, each time, permission will only be granted for 7 years).  [Page 35] clarifies that permission will be given this time. However, instead of contributing for four years before receiving benefits, [Page 24] newly arriving EU workers will get zero on day one of commencing employment but “gradually increasing” to 100% by the end of year 4.  The words “watered down” come to mind…
  7. David Cameron also failed “to end the practice of sending child benefit overseas”.  All he managed was [Page 23] to reduce the amount of child benefit paid to that of the Member State where the child resides – and this applies only to new claims made by EU workers in the UK. Then from 1 January 2020, the UK may apply this reduction to existing claims to child benefits already exported by EU workers in the UK.

Hence on the important Points 3. and 4. David Cameron failed to achieve what he wanted.  He is already selling the “New Settlement” as a victory and claiming that UK voters should be worried about an uncertain world outside the EU.  But ships would never have travelled over the horizon if their crews were scared to venture into the unknown and Britain would never have had an Empire had our ships not sailed off into the unknown.  We are a free-trading island nation, with centuries of experience of venturing into the unknown.  The people of the UK will decide on 23 June 2016 whether to stay in or leave the EU.

Lastly there is an interesting possibility: last year the Scots voted to stay in the UK.  This year the English (84% of the population of the UK) could vote to leave the EU but the Scots may want to stay in (and would then demand a second referendum).  Hence this vote could also be a way for the English to get shot of the Scots three hundred years after the English last bailed out the Scots (the Acts of Union were in 1706 and 1707).  Last year the English did not get a vote to kick the Scots out of the UK but this EU referendum could result in a win-double, namely exiting the EU and ejecting the Scots from the UK too.

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