David Cameron sought “fundamental” change in Britain’s relationship with the rest of the European Union. On BBC radio on Saturday morning, the Chancellor of the Exchequer described the outcome as “substantial”, though he hastily added the word “fundamental” as well.
“Substantial” is nearer the mark. There will shortly be a promised Government initiative to assert the authority of our Parliament and constitution (insofar as we have one) over EU laws. But nothing in this deal (or in any measure the Government brings forward) will alter the fundamental basis of the European Union which is that laws adopted within the EU cannot be amended or disapplied by any national Parliament. Were such amendment possible then all common policies on the single market for goods and services, environment, transport, energy etc. would cease to be common policies. That basis of operation is at the core of the European Union. Within it, the United Kingdom, as one of the large Member States, has political weight in proportion to our size: 13% of the votes in the Council of Ministers and 10% of the Members of the European Parliament. No EU law can pass without a majority vote in the Council and the approval of the elected Members of the European Parliament. Each of us now has to decide whether membership on that basis remains in our national interest.
The Government will be publishing three documents to inform the debate. The first, probably to be published today (Monday) will describe the deal. Expect it to be a mixture of fact and hard sell because this is the Government’s best chance to get its case across to Parliament and the public. It will be followed by two more documents, one describing what would have to happen if Britain voted to leave the EU, i.e. how Brexit would happen, and the other describing possible alternative relationships between Britain and the EU were we to leave. These papers are a statutory requirement under the EU referendum law. In due course, there will be a further paper, from the Treasury, describing the economic costs and benefits of EU membership.
Although David Cameron set his sights high in rhetorical terms, in practice, he limited his demands to objectives which he had a good chance of achieving. Unlike most such EU negotiations, where officials and then Ministers meet endlessly in large negotiating groups, most of this negotiation was conducted in a series of bilateral discussions between Britain and other Member States. Last week’s European Council was effectively the first serious collective negotiating session at political level, so it is no surprise that it was occasionally fraught.
From a business perspective, the most important part of the deal is the Decision on the relationship between members and non-members of the euro zone. Undoubtedly, at the back of George Osborne’s mind, has been the fear that, given that (with the exception of the UK and Denmark) all EU members are obliged to join the euro zone if they meet the conditions, sooner or later the United Kingdom could be in a very small minority of ‘outs’. Moreover, in a very competitive EU, the danger of the euro zone adopting measures which could discriminate against non-members (and most notably the City) is a real one. The final document shows more changes than anywhere else compared with the original draft we saw a fortnight ago. That document set alarm bells ringing in the European Central Bank and in Paris: they feared it would allow Britain to put a brake on the euro zone countries. So, the final document more explicitly asserts the rights of the euro zone to integrate further, while protecting the single market rights of the outs. In addition, a country such as Britain, if it felt that the rules were being unfairly skewed against the outs (because the Eurozone Members constitute a qualified majority for voting purposes) will have the right to take the issue to the European Council. That is not a right of veto for the UK, but it involves both a pause before a measure is voted on and a substantive procedure led by the President of the European Council to resolve the differences. These new measures have the force of law in international law terms. At the next negotiation on Treaty amendment, they will be incorporated into the EU treaties. They are a significant (but not an absolute) safeguard for the UK as a non- member. The British Government will assert that Britain will never join the euro. However, if we remain in the EU, we have an absolute right to join the euro on equitable terms if we ever decide that it is in our interest to do so. If we leave the EU that right would of course be lost.
On migration and benefits, the deal does what it says on the tin. It indexes child benefit paid to children of EU migrants living in their home country to the rates applicable in that country. It also means that the Government will not have to pay in-work benefits to migrant workers straightaway and only gradually to increase them thereafter.
The so called red card for national Parliaments and the opt-out for Britain from the EU treaty objective of “ever closer union among the peoples of Europe” remain pretty much as I described them before.
I believe that the Government got a useful deal; but not enough to satisfy the serious sceptics, who want nothing short of Brexit. The main campaign will be fought on the fundamental issues of British membership, with migration as the emotive wild card.
Measurement and evaluation