David Cameron has said he will negotiate a ‘better deal’ for Britain. But what should the UK’s future relationship with the EU be?
The vast majority of EU member states wish Britain to remain part of the EU. Therefore, the threat of a UK exit via a referendum presents an opportunity to renegotiate a more advantageous settlement for Britain.
The structure of the EU remains based on the original 1950s Community of the six founding members. It is not fit for the modern age and does not account for the diversity of the now 27 member states.
Too much power has been transferred to Brussels. The EU should interfere less in the policies and practices of its diverse member states. EU common rules are beneficial only where they aid the operation of the Single Market. In general, member states know better than the European Commission where their interests lie.
Britain should push to reassert the power of the Council of Ministers, strengthen the European Parliament (in relation to the Commission), and work to reduce the interference in national policies by EU institutions.
It is vital that the UK retains access to the Single Market. Norway is often cited by those arguing that Britain can leave the EU and remain part of the Single Market. Whilst this is true, Britain would continue to have to make contributions to the EU budget, it would be bound by the majority of Common Market Regulations, and it would have no influence in the shaping of such regulations. Furthermore, the Single Market cannot function properly without some degree of political integration.
The following areas require either reform or a repatriation of powers to the UK:
(i) Immigration Policy
The original principle of the Free Movement of Labour was that Community citizens were free to go to any member state for the purpose of work. Where work could not be found, individuals were forced to return home. There was no unconditional right of residence, or even settlement. Entitlement to social security benefits and housing only accrued where one had been working and paying tax. The EU should return to this principle. EU Citizens should have the right to work in the UK, but not an automatic right to stay. The Council of Ministers could change this without any Treaty amendments being required. The British government should only allow those who have paid UK tax to claim benefits.
(ii) Social Policy
Certain measures, such as the Working Time Directive, place restrictions on employees and workers. Member states should have exclusive control of social policy since they know what suits their economies and electorates. A 35-hour working week may suit France, but it should not be imposed on others.
(iii) Financial Regulation
The UK financial services industry accounts for over 35% of the EU whole. The UK should therefore have a leading role in EU financial regulation. If London is to compete with Singapore and New York, Britain must seek more pro-growth measures, protections for the industry, cuts to regulation, and a change to QMV rules.
(iv) The Common Agricultural Policy, Common Fisheries Policy, and Cohesion Funds
The CAP is flawed, both conceptually and economically (it still accounts for over 33% of the total EU budget). Reform is difficult because of the self-interest of countries like France, Italy and Poland. The CFP has seen positive recent reform, including the ending of discards, but the proposed increases to Cohesion Policy spending should be combated. Britain must use intergovernmental cooperation with like-minded member states to push for reform.
(v) Education and Culture
Beyond specific programmes such as ERASMUS, education and culture do not belong within the EU at all. There is value in sharing education and culture, but it should be done on an intergovernmental basis.
(vi) Foreign Aid
Britain should not contribute to an ‘EU aid’ budget. The UK can administer aid far more efficiently on its own through relationships forged with developing nations over decades.
(vii) The Common Foreign and Security Policy
A common EU foreign policy is unnecessary given the existence of NATO (which is far more powerful as it includes the US). Whilst meetings to co-ordinate foreign policy between EU members have proved valuable over many years, relinquishing the power to determine national foreign policy would be disastrous. The UK must remain free to protect and advance its national interests.