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After EU Deal, British Voters Weigh Costs and Benefits of Brexit

Like other nations, the United Kingdom faces ongoing pressures from debt, demographics, and refugees fleeing the Middle East. Some politicians use the European Union as a convenient scapegoat for their own troubles. In 2013, British Prime Minister David Cameron pledged to renegotiate terms of Britain’s membership in the EU. A referendum on whether the country should remain a member is set for June. Cameron presides over a Conservative Party divided on Europe, explains David R. Cameron, professor of politics at Yale, and “the pledge was motivated, above all, by his desire to secure a Tory majority in 2015.” The settlement addresses irritants in the areas of economic governance, competitiveness, social benefits and free movement, but does not change treaty terms or provide significant EU reform. Economic crisis has hit Europe hard in recent years, but the EU remains a powerful force in trade, accounting for 20 percent of global exports and imports while representing only 7 percent of the world’s population. – YaleGlobal

After EU Deal, British Voters Weigh Costs and Benefits of Brexit

British prime minister lauds new deal with the EU, and the voters will decide on Brexit in June
David R. Cameron
YaleGlobal, 25 February 2016
Brexit as scapegoat: Conservative Party challenger Mayor Boris Johnson and Prime Minister David Cameron, top; East European immigrants in the UK

NEW HAVEN: After 30 hours of non-stop negotiation last week, Prime Minister David Cameron and the 27 other heads of state and government of the European Union agreed on the terms of a “new settlement” for the United Kingdom – one they hope will persuade a majority to vote in favor of remaining in the EU for the referendum scheduled June 23.

The settlement was the culmination of an effort Cameron began in January 2013 when he pledged that if the Conservatives won a majority in the 2015 election he would renegotiate the terms of Britain’s membership in the EU and hold an in-out referendum on membership by the end of 2017. It was, he said, "time for the British people to have their say. It is time for us to settle this question about Britain and Europe."

But, of course, the pledge was not just about resolving Britain’s longstanding ambivalence about Europe. It was also about winning the 2015 election. With Cameron presiding over a Conservative Party that has long been deeply divided over Europe, sharing power with the pro-EU Liberal Democrats and facing a growing threat of defections of Conservative members of Parliament and voters to Nigel Farage’s xenophobic and euroskeptic United Kingdom Independence Party, the pledge was motivated, above all, by his desire to secure a Tory majority in 2015.

Cameron’s settlement addresses UK concerns in four areas – economic governance, competitiveness, sovereignty, and social benefits and free movement. Regarding economic governance, the leaders agreed that measures to deepen Economic and Monetary Union will be voluntary for non-euro members, that the EU institutions will ensure a level playing field for all member states in the single market, that EU law regarding the banking union applies only to financial institutions located in states in the euro area, and that supervision of financial institutions and markets in non-euro countries is the responsibility of those countries.

The United Kingdom is not committed to further political integration into the European Union.

Regarding sovereignty, the leaders recognized that, notwithstanding the commitment in the treaties to achieving an “ever closer union,” the United Kingdom is not committed to further political integration into the European Union and agreed to make it clear in the next revision of the treaties that ambition does not apply to the UK. Left unsaid was that the UK could, of course, prevent any move toward a closer union by refusing to agree to a treaty or amendment that would have that effect.  

Regarding social benefits and free movement, the leaders agreed that the right of free movement of workers from one member state to another can be limited for “overriding reasons of public interest” such as averting the risk of undermining the sustainability of social security systems. Toward that end, they agreed that the European Commission will propose legislation to create an “alert and safeguard mechanism” through which a member state could notify the commission and Council of the European Union of an exceptional situation affecting essential aspects of the social security system, including the in-work benefits system, and be allowed to restrict for seven years the access of newly-arriving EU workers to non-contributory in-work benefits for up to four years.

The leaders also agreed the commission will submit a proposal to amend an existing regulation so child benefits paid to other member states for the children of workers from EU states who remain in the home state are indexed to the standard of living and benefit level of the home state. Until 2020, the legislation would apply only to new claims made by EU workers in the host state; thereafter, it would apply to all such benefits.  

Prime Minister Cameron crowed that the settlement gives the UK “special status in a reformed EU.”

Cameron crowed that the settlement gives the United Kingdom a “special status in a reformed EU.” But in fact it does not. The UK has had from the beginning a special status in the EU, epitomized by its late entry in 1973, Margaret Thatcher’s insistence that the UK receive a substantial annual rebate on its fiscal contribution to the EU, its refusal to participate in the European Monetary System until 1990, its opt-out from the monetary union and the euro, and its refusal to join the Schengen area.

And the settlement certainly does not reflect any significant reform of the EU. The only way substantial and fundamental change in the EU can occur is through negotiation of a new treaty or amendments to existing treaties. German Chancellor Angela Merkel and the other leaders made it clear at the start of Cameron’s campaign that negotiation of a new treaty or amendment of the treaties was off the table.

The rhetorical commitments regarding economic governance, competitiveness and sovereignty will perhaps comfort some British euroskeptics. And the provisions for limiting, in certain circumstances, the flow of migrants from other European Union states will no doubt be welcome to many in a country that has roughly 2 million workers from other member states, including more than 850,000 from Poland and almost 200,000 from Romania. But the settlement does not constitute a reform, fundamental or otherwise, of the EU.

It’s not surprising that Cameron immediately confronted a firestorm of Tory opposition to the settlement.

For that reason, it’s not surprising that Cameron immediately confronted a firestorm of Tory opposition to the settlement when he returned from Brussels. At a long cabinet meeting Saturday morning, at least six ministers – among them Michael Gove, the justice secretary; Iain Duncan Smith, a former leader of the party and the minister for work and pensions; and Chris Grayling, the leader of the House of Commons – told him and their colleagues they would support the “leave” option in the June referendum. The next day, Boris Johnson, the highly visible and vocal mayor of London – and a potential future leader of the party – announced he too will support the “leave” option as will almost half of the 330 Conservative MPs.

Over the next four months, British voters will be bombarded with contradictory assertions about the consequences of a Brexit on foreign investment, growth, job creation, interest rates, the currency, and the City of London. Nevertheless, it’s hard to imagine that a British exit from the EU, with which it conducts half of its trade, which includes seven of the country’s ten most important export markets and for which it serves as the financial capital, would not have a negative effect on the economy – even if, in departing, it were to negotiate, under the terms of Article 50 of the Treaty of Lisbon, a withdrawal agreement that would allow it to remain in the Union’s single internal market for goods, services, capital and people.    

A Brexit would have other consequences as well. Perhaps most important, as Nicola Sturgeon, Scotland’s first minister, and Angus Robertson, the leader of the Scottish Nationalists in the House of Commons, have made clear, a vote to leave the European Union will prompt another Scottish referendum on independence – meaning that if the UK leaves the EU, Scotland would in all likelihood leave the UK.

The referendum campaign has just begun and, with four months to go, it’s much too early to venture a guess about the outcome. But most polls give the “remain” option a lead and, given the uncertain and, for many, quite fearful consequences of a Brexit, it is likely, despite its profound ambivalence about Europe, the UK will vote to remain in the EU.

David R. Cameron is a professor of political science at Yale and director of the Program in European Union studies.


Rights:Copyright © 2016 YaleGlobal and the MacMillan Center

Comments on this Article

28 February 2016
SUBJECT:
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EU WORKER - EXPORTATION OF CHILD BENEFITS -
COST OF LIVING WITHIN UK RANGED FROM 69% TO 539%
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Hi David,
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Assume the architect of the deal uses cost of living (GDP per capita PPS) as an option to index exported child benefits. Should he use the national or regional?
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Did the architect overlook the difference in the cost of living within the UK?
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Based on the 2014 regional numbers of the (Cost of Living) GDP per capita PPS of 276 EU Regions, published in the Eurostat (1) News Release 39/2016, it seems that the difference within one Member state can be bigger than between Member States.
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For the UK the numbers ranged from 69% of the European Union (EU) average in region of West Wales & The Valleys, to 539% of the average in Inner London - West.
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A factor 7.8 (=539/69) for the UK! How to be fair?
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What about the next case?
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The 2014 regional GDP per capita PPS number for the children living in Lithuania and Cornwall is the same (75%) and so should be the benefits that the EU workers parents receive.
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Let’s hope the architect has a plan ready that handle as well the differences within the UK as the difference between member states and if not it could be seen as a case of discrimination against EU workers.
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EU workers don’t get tricked by this deal! Roll-back on free movement, less in-work benefits, cut on exported child benefits, etc.
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Magic is how tricks can manipulate critical attention and awareness.
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I wonder, what is your view on this?
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Regards,
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Johan
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Documentation:
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(1) To find the Eurostat News Release 39/2016 published on the 26th February 2016 - 2014 GDP per capita in 276 EU regions. Twenty-one regions below half of the EU average…
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Use < 1-26022016-AP-EN.pdf > or < Eurostat NewsRelease 39/2016 > to google it.
-Johan , EU worker - Exportation of child benefits - UK Cost of Living