Beefed up powers for the European Commission and direct EU regulatory control over single market issues are recommended as key ways of maintaining a strong single market, according to a UK government report published yesterday (22 July).
The UK 'Review of the balance of competences' examines the country’s relationship with the EU following consultation with businesses, think tanks, academics and other bodies.
Its recommendations will form the bedrock of attempts by Prime Minister David Cameron to renegotiate the position of the UK within the EU in the event that Cameron’s Conservatives remain in power following the next general election, which will take place not later than 7 May 2015.
Cameron has pledged a referendum on the UK's continued EU membership if he wins the next election.
Yesterday, the first set of reports were published, covering an overview of the single market, health, development co-operation and humanitarian aid, foreign policy, animal health and welfare and food safety, and taxation.
Risks to single market arise from eurozone dominance
The survey found that “most observers, and indeed most of the evidence received for this report,” gave a positive impression of the impact of the single market on the UK.
The report, however, highlighted two potential risks to the single market arising from stronger economic and monetary union within the eurozone countries.
“It [the single market] could fragment, if the euro area develops into a clear political entity, or it could become dominated by the eurozone member states,” the survey found.
The report set out a series potential reforms designed to beef up enforcement of the single market and to give it more emphasis within the EU machinery, although it acknowledged some of these would be difficult to achieve politically.
Structural changes to EU institutions
Establishing more pan-European enforcement of single market legislation is one of the report’s more radical ideas. “Giving [national enforcement bodies’] powers to a European institution would improve the consistency and hence increase the extent of integration,” it said.
Other EU structural changes include establishing a dedicated Single Market Council, splitting the financial services and single market portfolios within the Commission and establishing a new single market authority.
Foreign Secretary William Hague, a Conservative party member, welcomed the publication of the report, saying: “In some cases, they have confirmed and illustrated what we believed already. In others, they have thrown up new evidence and perspectives on our relationship with the EU.”
But in a foretaste of political wrangling to come, Conservative eurosceptic MPs dismissed the findings.
Tory MP Peter Bone said the review should prompt the Conservatives to abandon the coalition and seek to repatriate powers alone.
“This sounds like a Whitehall whitewash. This is a government review, not a Conservative party review. This exercise was an irrelevance,” he said.
Conservatives’ coalition partners – the pro-European Liberal Democrats – suggested the report backed their political stance.
Referring to Japanese submissions to the review, Liberal Democrat MEP Fiona Hall said: “Tokyo has warned that Japanese investment, which supports 130,000 British jobs, depends on Britain playing a major role in the EU. This [report] shows how EU membership underpins both our trade with Europe and with the rest of the world.”
Further reports likely to unleash heated debate
Hall said the Liberal Democrats “have made it clear that the balance of competences review should not be used to make a shopping list of powers to be repatriated back to the UK”.
The best way to deliver reform, she added, is “by building alliances with our European partners, not alienating them by demanding unilateral carve-outs”.
Nevertheless, of the further 26 reports making up the review of the balance of competences, due to published by the end of 2014, some include contentious political issues surrounding criminal justice, immigration and employment law.
With the European elections looming next spring, the findings of these upcoming reports could put further strain on the UK’s governing coalition, as each governing party seeks to exploit the reports for their political ends.
A potential British exit from the European Union came to the top of the political agenda after Prime Minister David Cameron said that Britain must use the upheaval created by the eurozone crisis to forge a new relationship with the European Union.
Britain has negotiated a number of opt-outs from key EU policy areas since its accession in 1973. The country is not part of the eurozone and has not signed the free-border Schengen Treaty and does not want to abide by a number of EU police and judicial cooperation rules.
On 23 January Cameron promised to offer Britons a simple ‘in/out’ referendum choice on whether to stay in the European Union if he wins the next election, scheduled for 2015.
- Before end 2014: 26 remaining reports of UK's Balance of Competences Review to be published
- UK Foreign Office: Review of the balance of competences