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Jonathan Djanogly writes on Europe and the EU Referendum

1st October 2015

The coming months should be exciting ones concerning British engagement in wider European matters. There are many issues of importance to British interests; from immigration controls, to increased regulation, to changing bribery and corruption regimes and of course EU related matters. Given the impending referendum on EU membership, this issue may well dominate in the near future.

With Parliament just returned from its summer recess, the referendum campaigns are entering full swing. Due to Electoral Commission complaints, there shall now no longer be a ‘yes/no’ question but rather a ‘remain in/leave’ question put to the people. The Referendum Bill passed its Commons hurdle on 7 September and now heads to the House of Lords, pretty much intact. The government gave ground on the giving of four months notice before the referendum but lost a vote meaning that the purdah arrangements (a period when Government activity is restricted prior to a vote) will now need to be approved by a Committee of the House.

The Bill will probably clear the Lords even though there is a strong pro EU sentiment amongst its members; where Tory peers form a minority. If anything there may be moves to enhance the (likely) pro EU franchise via amendments to extend the vote to 16-18 year olds and to allow resident EU citizens also to vote.

As for timing, the reported hope of the Prime Minister to go to the poll early in June 2016, is looking increasingly less likely as negotiations become more protracted. The preferred date currently being touted is October next year, i.e. still well before the French Presidential and German elections in 2017 (and after this year’s Polish elections). September 2017 is considered to be the last likely date before the year end statutory deadline.

The main themes of the government negotiations focus around competition, the Euro, immigration and accountability; with an overarching desire to remove the UK from treaty obligations focused on introducing an ‘ever closer union’.

On competition it is looking increasingly unlikely that the UK will regain its opt-out from the Social Chapter, although specific elements of EU directives may be addressed. For instance retaining the UK’s opt-out provisions from the Working Time Directive. The mood within the EU, at the moment, is not to bring in further regulations – but how the UK would be able to formulate its disengagement from future attempts to grow regulation, will be a challenge for negotiators.

Protecting the City of London from Eurozone changes has become a significant part of negotiations; “perhaps the single most important issue” according to the Chancellor George Osborne. The problem is that the Eurozone have an inbuilt majority vote and the current double majority (Eurozone and non-Eurozone) voting protections, are not working for the UK. For one, UK and non- Eurozone interests are not necessarily aligned e.g. in relation to the City of London’s financial services. A good example were the recent votes capping banker’s bonuses, which were heavily opposed (unsuccessfully) by the UK but not other non-Eurozone EU members. Secondly, many of the non-Eurozone countries are due eventually to take up the Euro; meaning that the non-Eurozone votes reduce. The general consensus is that this issue will need to be resolved by treaty change, which itself is a harder objective to achieve, even if agreed by the EU conditionally on the UK staying in the EU.

Immigration, stoked by tragedies unfolding in the Middle East, remains an important theme for renegotiation. However, any thoughts that the EU’s freedom of movement principles are to be altered have been kicked into touch; not least following strong statements from Germany. On this subject the UK will be following the Swiss EU negotiations closely. More likely than any formal block on EU migration, there will be negotiations surrounding the payment of welfare and unemployment arrangements.

Responding to a general UK feeling, that the EU processes and ability to change direction need reform is simpler said than done. There was talk of a so called “red card” right for member state Parliaments. But as ever the devil will be in the detail and this issue is likely to keep a good number of lawyers busy over the coming months.

Whether the overall package constitutes a serious and lasting change to the UK’s relationship with the EU or just a tweaking at the edges, is yet to be seen. In the meantime the advocates on both sides are formulating their campaigns. In this regard, so far, British business has generally not been stating its case. Indeed there are rumours that the Government has been asking corporate bosses not to advocate the staying in case for fear of somehow putting people off.

Personally, I believe this is a mistake. Firstly it assumes that all business is supportive of staying in the EU, which is not the case. But, worryingly, business plays such a key stakeholder role in our society that its exclusion from the debate would create a huge gap in the arguments surrounding the referendum. The issues at stake are too important for business to hide its views.

Jonathan Djanogly MP


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