eureformLabour of late has linked its commitment to Europe to a strong call for reform in Europe. Although there have been some proposals on what kind of reform, this think piece aims to bring some of those ideas together and to provide a starting point for further discussion.

Central points:

  • We need an EU that enables us and our neighbouring countries to work together in our common interests, no more, no less.
  • We need access to the European market (the world’s largest, vital for our exports and jobs) and a voice at the table where the rules for that market are decided.
  • We need those rules to provide for fairness, equal opportunities, consumer protection, respect for the environment and fair trade — not an unregulated free-for-all, dominated by the most powerful.

But the EU is not perfect. We will fight to change those policies that need reform, especially in agriculture and fisheries.
The EU also needs some visible safeguards to reassure the public that we are not creating a centralised super-state.
It is in Britain’s national interest to remain in the EU and support its constant reform. Departure would be massively damaging for British businesses, manufacturing and employment. We will make the hard headed, patriotic case, founded on the national interest, both for Britain in Europe, and for change in Europe.

Change:  

Labour has a good track record of securing reforms in the EU, both in its policies and in its structures  —  but some have not been followed up since we left office.

For instance we improved national parliamentary scrutiny of European affairs by securing a requirement that EU proposals have to go first to national parliaments giving them eight weeks to instruct their ministers before they go to Brussels to negotiate. So, why don’t we in Britain do what the Scandinavian countries do, and require any minister going to an EU meeting to come beforehand to Parliament or the specialist parliamentary committee to explain the issues, his/her objectives and red lines, and check that he/she has  parliamentary  support?

We accept that a common market needs some common rules if it is to work fairly, not least as regards consumer protection and a floor of workplace rights to prevent a “race to the bottom” in terms of  employment law or health & safety standards. But in government, we also strengthened safeguards against excessive or over-prescriptive European rules:

A  procedure to check on “subsidiarity” was added to the treaties to prevent the EU straying beyond its remit. National parliaments (even if their government doesn’t agree) can object to European Commission proposals that go beyond the remit of the EU (known as the “yellow card” procedure, see below).

  • The treaty now specifies explicitly that the EU only has those competences conferred upon it by the Member States. It clarifies that competences can flow two ways, not just to the centre.
  • EU legislation now needs approval by the European Parliament as well as by national ministers in the Council — a double-check on anything the EU adopts.
  • The Council must now discuss legislation and vote in public. The results of votes must be published.
  • There is a right of access for the public to EU documents (‘freedom of information’).
  • The EU can now be challenged in the courts if it fails to respect fundamental rights.

These safeguards can be built on. For example,  the “yellow card” procedure has been triggered only once so far. When it was, the Commission immediately withdrew its proposal – so why not get the Commission to recognise that it is in practice normally a “red card” procedure? And why does the government not seek to maximise its influence in the European Parliament, instead of pulling the Tory MEPs out of the main centre-right group in order to sit on the right-wing fringes?  Why does it not beef up Commons scrutiny of ministers attending Council meetings? And instead of supporting transparency, why was it so secretive about the proposals it says it made to safeguard the City of London?

We are open to discuss new safeguards, and indeed a Labour government would put forward a few of our own:

  • It should be made easier to repeal  EU legislation that is out of date or has not worked as intended.  If a simple majority of Member States in the Council or of MEPs in the EP request it, then the Commission should automatically bring forward a proposal for repeal.
  • When the EU is legislating for the first time in a new field, there should be a prior discussion of a Green Paper in national parliaments ahead of the Commission drafting any specific proposals.
  • Pending proposals should be withdrawn if no agreement is reached on them after a reasonable period of time.
  • Legislation should more frequently have either a review clause or a sunset clause.
  • The requirement for impact assessments for any new EU legislative proposal, introduced under Labour, must  be applied vigorously .
  • The “yellow card” procedure should cover proportionality as well as subsidiarity.
  • The European Parliament should hold public hearings and questioning of candidates for key EU posts, as it already does for the Commission: why not do the same for other key appointments? We should not take on trust the nominees from each country without checking their qualifications.

A better balance of EU policies:

In some fields the EU should do less, and in others it could do more, for instance in  enabling European countries to cooperate on tackling climate change or on fighting trans-national crime and tax evasion.

We want the EU to focus on where it brings added value. We are proud to have negotiated the setting up of European Arrest Warrant, enabling Britain to secure the speedy return of fugitive criminal and terrorist suspects who attempt to flee our justice.  Astonishingly, the coalition has spent its time arguing about whether to leave the Arrest Warrant, instead of focusing on improving it by addressing the shortcomings inherent in any new system.

We want a better approach to the economic challenges facing Europe  — its biggest challenge of all.  Blind and simultaneous  application of “austerity” policies across Europe has worked neither for countries in the euro nor for those outside. The reduction of excessive debt is necessary, but must be done in a way that is fair and is calibrated so as not to cause a further worsening of the situation. EU countries have in principle committed to “growth friendly and differentiated fiscal consolidation”. Yet the “growth friendly” side has been ignored by many governments, including ours, and there is precious little differentiation as the countries that can still borrow to invest at cheap rates of interest are not doing so.

We want to deepen the European single market in the areas where obstacles still hinder cross-border competition, such as in service industries. We helped negotiate the Services Directive to deal with this, but it has not been fully implemented. The government should do more back British businesses by pressing for full implementation of this directive across Europe, instead of seeking to undermine the single market by allowing countries to ignore or opt-out of its rules.

We want to use the EU’s leverage in trade talks to prise open markets in Asia and the Americas that will help British exports.  Some Conservatives say we would do better on trade if we were alone. But leaving the EU would not only jeopardise our access to the European market on our doorstep, it would require us to negotiate new trade agreements with every country in the world to replace the ones we currently have via the EU  —  and negotiating with far less clout.

We don’t want UK to be the only one to impose the necessary tough new rules on financial markets, with banks then circumventing the rules through their affiliates in other EU countries: EU-wide rules protect us better.  The EU’s Likkanen reforms go in the same direction as the UK’s Vickers reforms and should be supported.

We want to fight tax fraud, tax evasion and tax avoidance. They are not only grossly unfair towards honest citizens who pay their taxes, they are also now of such a magnitude as to have a dramatic effect on government deficits. But, because of the high volume of cross-border transactions, fighting them requires international action. This is an area where more effective action by the EU could save us billions of pounds. Common rules on transparency, automatic exchange of information between national tax authorities, police cooperation on international frauds and scams, action on tax havens, plugging the loopholes in the EU Savings Taxation directive by extending it to cover investment funds and innovative financial instruments, developing the Quick Reaction Mechanism to fight cross-border VAT fraud , and other collaborative mechanisms could pay huge dividends to Britain.

We want to cut EU spending where it doesn’t give value for money.  In government, we managed to reduce spending on the common agricultural policy from half of the budget to one-third, but in negotiations earlier this year the current government turned away from a proposal for a further significant reduction. For the future, we think the CAP should be co-financed with the recipient member states – like every other area of EU spending: why should agriculture alone be fully financed from the EU and not from beneficiary countries?  We also don’t see why the biggest landowners should get a subsidy based simply on the size of their land.

The EU budget should be used for items where spending at EU level can save money at national level, for instance, by avoiding duplications on research and development programmes, or where pooling resources can make them more effective through economies of scale.

We consider that energy supply is an area where European countries share common problems of external dependency, high costs, and environmental challenges. Deepening our single market in gas and electricity would cut costs and enable a more efficient use of resources. Developing trans-European connections would increase security of supply.

We don’t want Britain  to be the only country taking tough measures to fight climate change: action at world level is needed. Here, the EU can be of double importance: through its collective leverage in international negotiations and in setting standards through its own rules as the world’s largest market.

We recognise that internal European migration has become a matter of concern. A significant number of people come from other EU countries to work in Britain and over 2 million Britons work or live in other EU countries. All enjoy certain rights, but also obligations. For this to work, it is important to ensure that the public can see that the system is fair, is not subject to abuse, and does not place burdens on local communities that they are not given the means to deal with.  That is why Labour is calling for proper enforcement of our own laws (including employment law and the minimum wage, to prevent unscrupulous employers exploiting migrants and undercutting British workers), for reform of issues like family related benefits and for  greater national flexibility in transitional arrangements when new countries join the EU.

Leaner institutions:  

With more countries joining the EU, we must avoid its institutions and bureaucracy getting bigger and bigger. In government, we successfully negotiated a ceiling on the size of the European Parliament and of various advisory bodies like the Committee of Regions. With more countries joining, more could be done. The proliferation of specialist agencies should be looked at in view of reducing their number through mergers, and cutting the size of their supervisory bodies. The European Parliament should not need to migrate once a month to Strasbourg.

Referendums:

We are a parliamentary democracy and it is our elected House of Commons that deliberates and decides on the key questions of the life of our country, including our membership of international bodies like the UN, the EU, the WTO, NATO  etc.  All policies are debated in national elections, and EU matters are also subject to debate and votes in European Parliament elections.  Nonetheless, in view of their exceptional importance, we promised referendums on two things that would have significantly changed the nature of the EU or Britain’s relationship with it:
If the government had proposed to join the euro — which it didn’t
If the EU treaties were to be repealed and replaced by a Constitution  — which proposal fell when  France and Holland rejected it.
We remain committed to having a referendum in such cases or if there is a proposal to transfer significant new competences to the EU.  We are opposed to a referendum  that offers a false choice between Cameron’s Europe or no Europe and is held simply to bridge divisions within the Conservative party between its moderates and extremists  — and held at a time when the uncertainty it would cause would jeopardise the already weak prospects for Britain’s economic recovery.

Red herrings:

The government argues that the Eurozone needs further integration and that it will become a hard core within the EU, marginalising non-euro countries. In fact, although the countries that share a common currency need to do more together to manage that situation, the bulk of what the EU does will remain at the level of the whole Union: the single market and the legislation that sets the common rules for that market, trade, research & development programmes, foreign policy, police & justice cooperation, the Erasmus student exchange programme, agriculture, fisheries and so on will all remain at the level of the whole Union, not a core group. Britain will only be on the margins if it marginalises itself.

Some Conservatives have said that reform of the EU should be purely symbolic, changing the reference in the preamble of the EU  treaty to “an ever closer union”.  We would point out that the full text is “an ever closer union among the peoples of Europe in which decisions are taken as closely as possible to the citizen in accordance with the principle of subsidiarity” — the principle that the EU should act in as decentralised a way as possible. It is anyway only a preambular exhortation with no direct legal effect, which is presumably why the then Conservative government accepted it — indeed defended it — when negotiating the Maastricht Treaty. Amending this now would require a treaty change that is unlikely to be agreed and is anyway not necessary. Instead, we should focus on the binding legal requirements, set in Articles 4 and 5 of the treaty itself rather than in the declaratory preamble, whereby the Union:

  • may act “only within the limits of the competences conferred upon it by the Member States in the Treaties” (principle of conferred powers)
  • and even then act “only if and insofar as the objectives of the proposed action cannot be sufficiently achieved by the Member States” (principle of subsidiarity)
  • and even then “the content and form of Union action shall not exceed what is necessary to achieve the objectives of the Treaties” (principle of proportionality)
  • must “respect their essential State functions” of the Member States including national security which “remains the sole responsibility of each Member State”.

These guarantees were secured in the treaty by the Labour government. They are supplemented by the fact that EU procedures require the approval of the EU Council — composed of national ministers from the Member States — for the EU to take any legislative action to implement the treaty.  These legal requirements demonstrate that the idea of a centralised Union replacing the Member States is a myth.

Yet other Conservatives want Britain to opt out of key areas of EU policy, usually referring to the social chapter or police & justice cooperation. When the government recently looked into the latter, they found that the arguments for withdrawing from its central elements, like the European Arrest Warrant, were unfounded.  The same is true for the social chapter, which notably lays down minimum standards of decency for employers to treat their workforce. The Conservatives want Britain to opt-out of this, based on their ideological preference for a market with no protections for the vulnerable. But, no other EU country is likely to agree to let one member compete in the common European marketplace under a different set of rules from the rest, gaining an advantage simply by lowering health and safety standards or slashing the rights of workers.  Individual pieces of legislation certainly need up-dating and reform, but wholesale unilateral opt out is neither feasible nor desireable.

Drafted with the assistance of Richard Corbett, former Chair of LME and prospective candidate for #EP2014