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The proposals for Eurozone and non-Euro countries are the most significant
If the UK gets its way, we will be ring-fenced out of all policy development relating to the Euro (likely to grow and grow as a category) and not required to support the currency if it gets into difficulties. We will be able to maintain our own financial services supervision rules, an area where there has been a lot of competence creep in recent years. And British businesses will be protected from discrimination that happens just because they are based in the UK – again, a persistent risk recently and one which Britain has had to fight hard to prevent. These are significant steps and should make clear that every Euro “out” has a totally different set of obligations and commitments to those of Euro members.
The ideas on sovereignty are important too
Of course, some would like the PM to be looking for the British Parliament to be able to overrule EU laws. That is the same thing as leaving the EU, as those who push for it know very well, so it’s not surprising it’s not an aim of the negotiation. But what is on the table would make for meaningful change all the same.
First, in his speech, though not in his letter (since doing it rests in the UK’s own hands), the PM set out plans to develop the UK’s own “Kompetenz-Kompetenz” mechanism. That the German term is often used reflects the fact that it is the German Constitutional Court which has always claimed this right, that is, the assertion that it has the final say on whether powers have been constitutionally handed to the EU and whether the EU institutions are acting in accordance with the powers granted them by the German Constitution. The fact that the German Court claims this power has shaped the evolution of major areas of Euro policy-making in recent years. If Britain claimed it too – and had a proper mechanism to police it – it could do the same for us. Whitehall has in the past drawn up plans for such a mechanism. Maybe they will now see the light of day.
In a similar spirit is the proposal to tighten the UK’s exclusion from justice and home affairs business. There have been persistent and quite unreasonable efforts to find a way round the UK’s opt-out, for example by claiming that we are bound by commitments in this area made in Treaties with other countries. This has been a running source of friction and needs to be settled once and for all.
The proposal for a group of national Parliaments to be able to block EU legislation is equally important. Obviously much depends on the threshold, which would need to be fairly low to make a difference. But it would give Parliaments a worthwhile new power and empower them to engage in EU-level decision-making. And the fact that it existed would shape negotiations at EU level more widely. We all know of cases where a Government has negotiated something it didn’t have political support for at home and then claimed it had no choice but to fall in line. If it knows its own Parliament is working in a different direction, that will be a powerful inhibition against simply taking the easy way out.
The plan to revamp the subsidiarity Protocol is interesting, though we lack detail. The existing rules are commonly thought to lack teeth, and the Juncker Commission’s own decision to restrict legislative proposals has done more than this Protocol ever has. There is an interesting suggestion in the PM’s speech, though again not in the letter, that “if powers don’t need to reside in Brussels, they should be returned to Westminster”. I do not believe this was a casual remark and we will have to see what emerges in this area.
Stopping the UK being bound by “ever closer union” would make a real difference
It is striking that the recent poll of Institute of Directors members put this as their second-highest ask from the renegotiation. The philosophy behind the phrase has of course deeply shaped Commission and Parliament behaviour and European Court jurisprudence, and for that reason I agree with those who say that taking it out of the Treaty altogether would make little difference to such a deep-rooted culture. But the UK is seeking not total removal, but the exemption of Britain from its provisions. It is the fact that the EU would then have to cope with two categories of states, one bound by its provisions and one not, that would force change. The Commission would have to propose legislation in a way which took this provision into account, unnecessarily integrationist rules would be more vulnerable to challenge by Britain, and over time the European Court would have to develop different jurisprudence affecting us.
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Would this all stick?
[...] Finally, let us assume that David Cameron succeeds in negotiating all this and in making the domestic law changes he’s looking for. For me, unarguably, this would complete the process of giving Britain a new and different status within the EU. Britain would be ring-fenced out of all Euro policy and its consequences, with enhanced protection for our financial services industry, outside Schengen and with slightly tighter rules on the abuse of free movement, and outside all justice, police, and home affairs rules unless we wished to take part. All that is easily more than half of EU policy nowadays and the more rapidly developing half too.
Beyond this, the British Parliament, with others, would have a new power to stop intrusive new rules, enforce subsidiarity, and (let us hope) the ability to police competence creep more vigorously. We would no longer be bound by the ratchet effect of legislation and court judgements implementing “ever closer union”. As now, we would have a unanimity lock over foreign policy proposals and the right to block or take part in (if it ever happens) defence policy. And yet we would continue to be part of to the single market, businesses would have the benefit of one single set of rules, especially important in services, and we would keep the benefits of the EU’s trade policy and free trade agreements.
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It’s fair enough to agree or to disagree with these proposals and the balance they seek to draw. But what’s not reasonable is to describe them as trivial or cosmetic. Fully achieved, they could set Britain on a different path of membership-lite, giving us the benefits we need without many of the costs we will never feel it right to bear. That is a respectable outcome, advantageous to the UK, and it is surely reasonable for a British Prime Minister to seek to achieve it.