10 June 2015

POLITICO / Hammond: Britain’s four-point package for EU reform

Philip Hammond is the foreign secretary of the United Kingdom.

Right across the continent, anti-EU parties have made huge gains in recent years — in local, national and European elections. We need to respond by making the EU more democratic and far better equipped to help deliver the growth and jobs its citizens expect.

Since the UK joined, the EU has changed beyond recognition. The fall of the Iron Curtain has seen the EU expand with 16 new countries becoming members; the Euro has been created, and EU rules now regulate our affairs across a huge area stretching from environment to social policy. There is no doubt that EU membership has brought clear benefits to Britain in some areas. But in others it has led to loss of national sovereignty and an increase in bureaucratic burdens on business that has resulted in the British people’s consent for membership wearing wafer thin.

So what does the UK government want from this negotiation? To restore the confidence of the British people in the EU, we need to work with our European partners to agree a package of reform that will ensure the EU is fit for the 21st century; reforms that will benefit not only the UK, but all 28 member states.

First, on jobs and growth, the uncomfortable truth is that the EU’s growth rate is far below that needed to reduce unemployment to acceptable levels and is being challenged not only by Asia, but also by the US. If we are to preserve European living standards, we need to empower our businesses to compete more effectively in the world by enhancing the single market, especially in services, digital, and energy. We have to be open to world trade and complete trade agreements with the US, Japan, and other developed economies, as well as with the fast growing economies of Asia and South America. And we must create a regulatory framework that supports, not hinders, business to create the growth and jobs we need.

Secondly, we seek reforms that will allow those countries that want to integrate further to do so, while respecting the interests of those that do not. This applies most clearly to the Eurozone where the UK does not seek to prevent further euro-integration — indeed supports it — but does need guarantees that the interests of those not in the euro will be protected. This concept of a two-pillar Europe, with a properly defined relationship between the Eurozone and non-Eurozone within a single market, and sharing the same institutions, builds on the existing architecture of Schengen and Banking Union and is good for everyone. It allows Eurozone integration to progress, respecting the interests of the non-Eurozone Member States. And it recognises that, while the concept of ever-closer union appeals to some Member States, it is not right for all.

Thirdly, we think national parliaments must have a greater say, both in connecting citizens to EU decisions and in properly implementing the concept of subsidiarity — the idea that decisions should be made as close as possible to the citizens they affect. All too often the EU has exercised power in areas where decision-making could be done at national, regional, or local government level without interfering with the operation of the single market or the effective functioning of the EU. We want to strengthen the role of national parliaments, for example, by allowing groups of them to be able to block regulations in future. The EU must respect the layers of government that are closest and most accountable to European citizens. We agree with the Dutch Government: “Europe where necessary, national where possible.”

Fourthly, while we accept that the free movement of people to work is one of the four fundamental freedoms of the EU and these negotiations do not seek to curtail this freedom, we do want to protect the UK’s welfare system from abuse and reduce the incentives that encourage highly skilled workers to travel to the UK to do low-skilled jobs. This undermines economic growth in their countries of origin and belief in the fairness of free movement in destination countries. We must also develop the other freedoms, in particular freedom of movement of services and of capital, to ensure that it is not just free movement of people that contributes to convergence of living standards across Europe.

We approach these reforms in a positive and engaged manner, listening to our partners and intending to agree reforms that will help all Member States to thrive in the 21st century.

We will negotiate a package of reform and will then ask the British people their view, in a straightforward “in or out” referendum by the end of 2017, and earlier if we can.

The stakes are high: the UK is a large and open economy with a long history and a significant role on the world stage which can contribute hugely to Europe’s success. If we can resolve the issues that have so troubled the British people and achieve a “Yes” vote in the referendum, we will settle the question of Britain’s place in Europe and enable the UK to play a fully engaged role in a more competitive, prosperous, outward-looking and confident EU in the future.

That is an outcome that really will be in the best interest of Europeans on both sides of the English Channel.

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