Open Europe urges Conservatives to tackle EU social policy and announce a referendum
04 November 2009
EU social and employment law to cost UK £71 billion over next decade
Open Europe urges Conservatives to tackle EU social policy and announce a referendum
Ahead of David Cameron’s announcement on Conservative policy on Europe, Open Europe today publishes the first in a series of papers about what a future Conservative government should prioritise, now that the Lisbon Treaty has been ratified.
Cameron is expected to announce that he will seek to ‘repatriate’ social and employment legislation from the EU, and promise a referendum on any future transfers of power. Open Europe argues that, if the Conservatives are serious about repatriating powers to member states, then social and employment policy is exactly the right place to start.
However, in order to achieve a strong negotiating mandate and fully address the current problems with EU social policy, the Conservatives must announce a referendum on reform of the status quo. A referendum on future transfers of power will do nothing to address the substantial costs already arising from EU legislation, nor the lack of democratic accountability in this area.
EU social and employment laws have had a massive impact on the UK economy, accounting for 25 percent of the total cost of regulation in the UK over the past decade. Looking ahead, UK laws derived from EU social legislation will cost the British economy more than £71 billion between 2010 and 2020, even if no new laws are passed in that time.
In the briefing paper, Open Europe sets out how the Conservatives should go about achieving repatriation in practice. This includes seeking a strong mandate from voters to strengthen the UK’s negotiation position in Brussels, through a referendum on reform.
The potential election of a new Conservative government will coincide with the opening of EU budget negotiations, where discussions will be held about how much each country should pay into the EU over the period 2014 to 2020.
The UK has a veto over these negotiations, and should be prepared to use it to fight for a package of reforms which must be fleshed out between now and the election. A major feature of such a package should be repatriation of social policy.
This package of reforms should be put to the British people in a referendum, with a question along the lines of: "Are you in favour or against withholding agreement to the EU budget until the European Reform Package has been adopted?"
Open Europe Research Director Mats Persson said:
“Given the substantial economic impact of these laws, the Conservatives are absolutely right to make EU social policy a priority. There is a strong practical, economic and democratic case for repatriating powers in this area.”
“If the Conservatives succeed in bringing back powers over these policies, it doesn’t mean scrapping every workplace right going – it means giving Westminster back the power to keep, scrap or amend these important laws to better suit the UK’s individual economic circumstances. This would cut costs and bring these decisions much closer to the people – where they belong.”
“Employment policy is best decided nationally, where it reflects different traditions and labour market models, which have evolved as a result of decades of democratic discourse in individual countries. The Conservatives would not be alone in Europe in arguing that centralised rules for such fundamentally different labour markets just don’t make sense.”
“That said, they will need a powerful mandate for negotiation in Brussels, and holding a referendum on a list of reforms, such as repatriation of social policy, is by far the best way to achieve it. UK voters must get a say on the future of the EU – a mere ‘manifesto mandate’ simply will not cut it.”
Please see below for a summary of the briefing, or click here to read the full text: http://www.openeurope.org.uk/research/eusocialpolicy.pdf
EXECUTIVE SUMMARY
Repatriating social and employment policy is the right battle for an incoming Conservative Government – for several reasons:
• EU social policy is the key driver of regulatory cost in the UK. A study by Open Europe, based on the Government’s own Impact Assessments and published in February this year, estimated that regulations introduced in the UK between 1998 and 2008 have cost the British economy £148.2 billion. Of this, £36.7 billion – or 25% - stems from EU social policy alone. • UK laws derived from EU social legislation will cost the UK economy more than £71 billion between 2010 and 2020. Therefore, in terms of relative impact on British society, tackling EU social legislation is exactly the right place to start for an incoming Conservative Government.
• Although the European Commission does not legislate as much in this area as it used to, EU social legislation is evolving all the time as it is interpreted by the EU courts. For example, the scope of the Working Time Directive has been extended no less than eight times by the European Court of Justice – the latest ruling was in September this year.
• As pointed out by the German Constitutional Court in its ruling on the Lisbon Treaty earlier this year, the EU has incrementally extended its powers in this area and overstepped its mark – below the radar of public scrutiny. The Court identified this area as “especially sensitive” for the ability of a country “to democratically shape itself”[1] and consequently ruled that the EU should have limited powers over social policy. There is therefore a democratic as well as economic case for the repatriation of powers over social policy.
What does repatriating social policy mean and how can it be achieved?
• Should a Cameron Government succeed in repatriating powers over social policy, the cost arising from these laws would not magically disappear over night. At least some of these regulations would also exist in the absence of EU interference, and a Conservative Government is likely to want to keep some of these laws in place – for example anti-discrimination laws. However, the key thing is that the UK brings both the regulations themselves and the costs stemming from them back under the control of Westminster, empowering MPs and in turn voters’ to influence them.
• EU social policy stems from two types of source: the articles in the EU Treaties which directly stipulate how and where the EU can legislate in this area; and from a set of other articles, which are not directly related to social policy but which have also been used to push through social policy legislation.
• Legally, repatriating social policy could be achieved by completely opting out from the first set of articles, and by inserting language in the second set of articles which clarifies that these articles cannot be used as the basis for social legislation.
• Politically, repatriating social powers can be achieved by adopting a four-pronged strategy:
o Getting a clear and powerful mandate from British voters – preferably through a referendum;
o Seeking allies in Europe – the UK Conservatives are not alone in their belief that social policy is best decided nationally;
o Showing that you mean business – by using the UK’s contribution to the EU budget as leverage;
o Showing EU partners that you are committed to keeping several of the social laws in place – but that you will strive to amend them to fit the UK’s individual circumstances.
NOTES FOR EDITORS
1) For more information, please contact Mats Persson or Lorraine Mullally on 0044 (0)207 197 2333, or 0044 (0)7817 027911 or 0044 779 94 606 91.
2)Open Europe is an independent think-tank calling for reform of the European Union, with offices in London and Brussels.
Its supporters include: Sir Stuart Rose, Executive Chairman, Marks and Spencer plc; Sir Crispin Davis, Former Chief Executive, Reed Elsevier Group plc; Sir David Lees, Chairman, Tate and Lyle plc; Sir Henry Keswick, Chairman, Jardine Matheson Holdings Ltd; Lord Sainsbury of Preston Candover KG, Life President, J Sainsbury plc; Sir John Egan, Chairman, Severn Trent plc and Lord Kalms of Edgware, President, DSG International plc; Hugh Sloane, Founder, Sloane Robinson.
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