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Government White Paper

by Mick 0 Comments

David Davis presented a White Paper “The United Kingdom’s exit from and new partnership with the European Union White Paper” to Parliament on 2 February 2017. This paper describes the Governments plan for leaving the EU and outlines the 12 point plan previously mentioned by Theresa May.

The main areas (12 points) extracted from the published paper are:

  1. Providing certainty and clarity – We will provide certainty wherever we can as we approach the negotiations.
  2. Taking control of our own laws – We will take control of our own statute book and bring an end to the jurisdiction of the Court of Justice of the European Union in the UK.
  3. Strengthening the Union – We will secure a deal that works for the entire UK – for Scotland, Wales, Northern Ireland and all parts of England. We remain fully committed to the Belfast Agreement and its successors.
  4. Protecting our strong and historic ties with Ireland and maintaining the Common Travel Area – We will work to deliver a practical solution that allows for the maintenance of the Common Travel Area, whilst protecting the integrity of our immigration system and which protects our strong ties with Ireland.
  5. Controlling immigration – We will have control over the number of EU nationals coming to the UK.
  6. Securing rights for EU nationals in the UK, and UK nationals in the EU – We want to secure the status of EU citizens who are already living in the UK, and that of UK nationals in other Member States, as early as we can.
  7. Protecting workers’ rights – We will protect and enhance existing workers’ rights.
  8. Ensuring free trade with European markets – We will forge a new strategic partnership with the EU, including a wide reaching, bold and ambitious free trade agreement, and will seek a mutually beneficial new customs agreement with the EU.
  9. Securing new trade agreements with other countries – We will forge ambitious free trade relationships across the world.
  10. Ensuring the UK remains the best place for science and innovation – We will remain at the vanguard of science and innovation and will seek continued close collaboration with our European partners.
  11. Cooperating in the fight against crime and terrorism – We will continue to work with the EU to preserve European security, to fight terrorism, and to uphold justice across Europe.
  12. Delivering a smooth, orderly exit from the EU – We will seek a phased process of implementation, in which both the UK and the EU institutions and the remaining EU Member States prepare for the new arrangements that will exist between us.

The White Paper is 75 pages log and can be obtained from the Government website at:

https://www.gov.uk/government/publications/the-united-kingdoms-exit-from-and-new-partnership-with-the-european-union-white-paper

A local copy of the paper is also available here:

The United Kingdoms exit from and partnership with the EU

Notification of Withdrawal Bill

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As a result of the decision of the Supreme Court requiring Parliamentary approval to invoke Article 50 The 2017
European Union (Notification of Withdrawal) Bill 2016-17 was introduced to Parliament by David Davis on 26 January
The actual Bill wording says

A Bill to Confer power on the Prime Minister to notify, under Article 50(2) of the Treaty on European Union, the United Kingdoms’s intention to withdraw from the EU.

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

  1. Power to notify withdrawal from the EU
    1. The Prime Minister may notify, under Article 50(2) of the Treaty on European Union, the United Kingdom’s intention to withdraw from the EU.
    2. This section has effect despite any provision made by or under the European Communities Act 1972 or any other enactment.
  2. Short title
    • This Act may be cited as the European Union (Notification of Withdrawal) Act 2017.

Here is the actual Bill

https://www.publications.parliament.uk/pa/bills/cbill/2016-2017/0132/17132.pdf

Other documents can be found at

http://services.parliament.uk/bills/2016-17/europeanunionnotificationofwithdrawal/documents.html

A briefing paper from the House of Commons Library is available at

Full Report: http://researchbriefings.files.parliament.uk/documents/CBP-7884/CBP-7884.pdf

Summary: http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7884

(LOCAL COPIES)

First Reading

The Bill was presented to the House of Commons and given its First Reading on Thursday 26 January 2017. This stage is formal and takes place without debate.

Second Reading

The Second Reading of the Bill took place over two days on 31 January and 01 February 2017 when MPs could debate the bill. Usually the second reading of a bill is conducted over a single day, but in this case, the time was extended over 2 days due to the importance of the bill. Parliamentary time was also extended to Midnight on the first day.

Jeremy Corbyn imposed a three-line whip on Labour MPs, directing them to vote for the Bill, because the Shadow Cabinet had agreed not to block Article 50. It is called a three-line whip because the instruction from the Labour Chief Whip is underlined three times, meaning MPs must vote as directed or risk being disciplined.

The Bill passed the Second Reading by 498 votes to 114 and proceeds to a Committee of the Whole House for consideration of possible amendments to the Bill.

3 days (6, 7 and 8 Feb 2017) have been scheduled for the next Committee Stage of the Bill

There are 175 Amendments to the Bill for consideration by MP’s. Details of these amendments are contained in the following documents:

Amendments – Monday 6th February

Amendments – Tuesday 7th February

Amendments – Wednesday 8th February

MPs approved the 3rd reading of the European Union (Notification of Withdrawal) Bill on Wednesday (evening) 8 February 2016 by 494 votes to 122, giving a majority of 372. None of the amendments were accepted and the Bill was passed in its original form.

The Bill was passed to the House of Lords for further scrutiny, possible amendments, and vote.

The Bill has passed the first reading in the House of Lords (08/02/17).

The House of Lords is in recess between from 10 February to 20 February and the second reading of the Bill will take place on 20 and 21 February.

The committee stage of the Bill is scheduled for 27 February 2016 and 01 March 2016

(updates will be added as the bill proceeds through Parliament)

Process to invoke Article 50

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Although it would seem that the process for invoking Article 50 should be straightforward, a legal case was initiated to determine whether the Government can use Royal Prerogative Powers to start the process of leaving the EU.

Gina Miller engaged the City law firm Mishcon de Reya to challenge the authority of the British Government to invoke Article 50 of the Treaty on European Union using prerogative powers, arguing that only Parliament can take away rights that Parliament has granted.

After a hearing on 03 November 2016, the High Court of Justice ruled that Theresa May cannot use the Royal Prerogative Powers to invoke Article 50 and begin the process for withdrawal from the EU and she needs prior Parliamentary approval.

Judgement: https://www.judiciary.gov.uk/wp-content/uploads/2016/11/r-miller-v-secretary-of-state-for-exiting-eu-amended-20161122.pdf

Summary: https://www.judiciary.gov.uk/wp-content/uploads/2016/11/summary-r-miller-v-secretary-of-state-for-exiting-the-eu-20161103.pdf

(LOCAL COPIES)

The Government decided to appeal the High Court’s decision and took the appeal directly to the Supreme Court.

The Supreme Court is the final court of appeal in the UK for civil cases, and for criminal cases from England, Wales and Northern Ireland. It hears cases of the greatest public or constitutional importance affecting the whole population.

https://www.supremecourt.uk

The appeal hearing was held from 5-8 December 2016 with the decision to be issued in January 2017.

Details of the case and proceedings can be found at

https://www.supremecourt.uk/news/article-50-brexit-appeal.html

The judgement by the Supreme Court was issued on 24 Jan 2017. The Secretary of State’s appeal was dismissed by a majority of 8-3. In a joint judgement of the majority, the Supreme Court holds that an Act of Parliament is required to authorise ministers to give Notice of the decision of the UK to withdraw from the European Union.

The judgement documents are available at:

Judgement : https://www.supremecourt.uk/cases/docs/uksc-2016-0196-judgment.pdf

Summary: https://www.supremecourt.uk/cases/docs/uksc-2016-0196-press-summary.pdf

(LOCAL COPIES)

A useful article, interpreting details of the judgement by Robert Craig: Miller Supreme Court Case Summary can be found at

https://ukconstitutionallaw.org/2017/01/26/robert-craig-miller-supreme-court-case-summary/

The Supreme Court decided that the Government is not obliged to consult with the UK’s devolved assemblies before triggering Article 50 and also ruled that once Article 50 is triggered, it cannot be reversed.

The form that the legislation should take was not defined and is entirely a matter for Parliament but Parliament will need to pass a new bill that gives Government the authority to trigger Article 50.

A statement, following the ruling, from Number 10 added :

The British people voted to leave the EU, and the Government will deliver on their verdict – triggering Article 50, as planned, by the end of March. Today’s ruling does nothing to change that.

It’s important to remember that Parliament backed the referendum by a margin of six to one and has already indicated its support for getting on with the process of exit to the timetable we have set out.

We respect the Supreme Court’s decision, and will set out our next steps to Parliament shortly.

Opposition leader Jeremy Corbyn reacted to the judgment by saying that his party will not seek to frustrate the will of the British people, but did say that “Labour will seek to amend the Article 50 Bill to prevent Conservatives using Brexit to turn Britain into a bargain basement tax haven.”

Brexit Update – Part 1

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An update on what’s been happening since my last article on 24 July 2016

In one of his first comments following the result of the EU Referendum, Jeremy Corbyn stated that:

“The British people have made their decision. We must respect that result and Article 50 has to be invoked now so that we negotiate an exit from European Union. Quite clearly negotiations must take place. There must be the best deal possible in order to ensure strong industries in Britain stay strong and strong industries that have big export markets protect retain those export markets. But we are in some very difficult areas.”

During the summer holiday period in 2016 there did not appear to be much happening.

Although a new leader was appointed by the Conservative Party in a relatively short timeframe, it took longer for the Labour Party to make a choice following the challenge to the leadership of Jeremy Corbyn.

After a long process, which began shortly after the EU Referendum, Jeremy Corbyn retained the leadership of the Labour Party with a convincing majority when the result was announced on Sep 24.

Theresa May coined the phrase “Brexit means Brexit” in response to questions about what Brexit meant but with little extra definition.

BREXIT Negotiations

The type of relationship that the UK has with the EU following Brexit has been under much discussion with speculation about a “Hard Brexit”, a “Soft Brexit” or whether to follow the relationship that other countries such as Norway and Switerland have with the EU.

It is not clear where the terms “Hard Brexit” and “Soft Brexit” originated. The terms are used in an attempt to describe the type of relationship with the EU that may result after negotiations are completed. “Hard” implying that the UK ends up trading with the EU under the rules of the World Trade Organisation (WTO) with no tariff free access to the EU Single Market, and has no obligations to the EU. “Soft”, on the other hand, implies that the UK retains access to the EU Single Market but in return accepts some form of restricted membership of the EU and includes following the 4 fredoms of the EU which are defined as the freedom of movement for goods, people, services and capital across national boundaries.

The UK is currently excluded from meetings with other EU countries when the topic relates to the UK leaving the EU.

Statements issued by EU leaders have also emphasised on numerous occasions that:

  • There will be no discussion on Brexit until Article 50 has been invoked.
  • The UK must honour the principle of free movement of people if it wants to retain access to the single market after it leaves the EU.

Details about the 4 freedoms from

http://www.europarl.europa.eu/atyourservice/en/displayFtu.html?ftuId=FTU_3.1.3.html

“One of the four freedoms enjoyed by EU citizens is the free movement of workers. This includes the rights of movement and residence for workers, the rights of entry and residence for family members, and the right to work in another Member State and be treated on an equal footing with nationals of that Member State. Restrictions apply in some countries for citizens of Member States that have recently acceded to the EU. The rules on access to social benefits are currently shaped primarily by the case law of the Court of Justice.”

The former French Foreign Minister Michel Barnier has been appointed by the European Commission to lead the negotiations on behalf of the EU.

At the beginning of October, during the Conservative Party conference, Theresa May announced that the UK would begin formal Brexit negotiations by the end of March 2017. She also promised to introduce the Great Repeal Bill to remove the European Communities Act 1972 from the statute book and enshrine all existing EU law into British law. The repeal of the 1972 act will not take effect until the UK leaves the EU under Article 50. The Government has indicated that these legal changes within the Bill would take effect on “Brexit Day”: the day the UK officially leaves the European Union (EU).

Theresa May’s speech can be seen at https://youtu.be/08JN73K1JDc

The Secretary of State for Exiting the European Union, David Davis, has later emphasised the difference between the Article 50 process and the Great Repeal Bill:

The great repeal Bill is not what will take us out of the EU, but what will ensure the UK statute book is fit for purpose after we have left. It will put the elected politicians in this country fully in control of determining the laws that affect its people’s lives—something that does not apply today.

A Research Briefing Legislating for Brexit: the Great Repeal Bill was issued on 21 November 2016. A summary is available at

http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7793

where you can also find a link to the full report.

Alternatively a copy of the full report is available here

https://eureferendum.kf12.com/wp-content/uploads/2017/02/CBP-7793.pdf

What’s happened since the EU Referendum

24 July 2016

It’s been a month since the EU Referendum where a majority of the electorate voted for the UK to leave the EU.

Here is a summary of the major events that have occurred since then.

Financial

The Governor of the Bank of England, Mark Carney,  was quick to make a statement following the EU referendum result.

Statement from the Governor of the Bank of England following the EU referendum result

You can watch his statement at

http://www.bankofengland.co.uk/publications/Pages/news/2016/056.aspx

FX Market

One of the first effects was seen in the financial markets with the Pound falling in value against the US dollar.

Looking at the spot inter-bank market rate, the biggest drop was on the 24 June showing the rate opening at 1.00GBP = 1.48USD and closing at 1.00GBP = 1.36USD.

The rate continued to fall, but more slowly for the next 2 weeks reaching 1.00GBP = 1.29USD on the 8 July.

On the 22 July the rate opened at 1GBP = 1.32 and closed at 1 GBP = 1.31 USD and appears to have settled down at least for the time being.

ref: https://www.poundsterlinglive.com/best-exchange-rates/british-pound-to-us-dollar-exchange-rate-on-2016-07-24

Precious Metals

As the pound was falling, the price of precious metals started to rise. On the 24 June, the spot price for Gold was £955.84 per troy ounce rising to a high of £1,056.79 per troy ounce on the 6 July and currently, on the 22 July, the price was £1,008.66

Stock Market

The Brexit vote caused a wave of panic selling by those gamblers, sorry traders, in the Stock Market with the Footsie 100 Index falling steeply after trading began but recovering to finish 199 (3.1%) points down at 6138.69 on the 24 June. After the weekend, the selling continued and the Footsie stood at 5982.2 at the close. After that, stocks started to rise and the Footsie was at 6577.83 by the 1 July and on the 22 July was at 6730.48 (which is around where it was in Aug 2015!).

ftse100

Political

The result also caused various political upheavals.

Conservative Party

Prior to the referendum Cameron had claimed (18th June) that he was the best person to negotiate any post-referendum deal and would remain “whatever” the result.

from the Independent newspaper:

http://www.independent.co.uk/news/uk/politics/eu-referendum-david-cameron-resign-step-down-boris-johnson-brexit-stay-as-prime-minister-result-poll-a7088811.html

from the Telegraph newspaper:

http://www.telegraph.co.uk/news/2016/06/18/david-cameron-insists-he-will-stay-on-as-prime-minister-regardle/

However, Cameron was quick off the mark and decided to resign as Prime Minister as the result hadn’t gone his way.

Cameron’s Resignation Statement

also at

https://www.gov.uk/government/speeches/eu-referendum-outcome-pm-statement-24-june-2016

In his resignation speech, he said he would stay until a new Prime Minister was in place, which was expected to happen by the 1st October.

Following Cameron’s statement 5 MPs presented themselves as candidates for the leadership: Stephen Crabb, Liam Fox, Michael Gove, Andrea Leadsom and Theresa May. Nominations closed at noon on 30th June 2016.

(Boris Johnson, an early favourite, decided not to run in the competition for leader after Michael Gove announced that he would run).

The process for election as leader of the party (and thus the next Prime Minister) is first put to a serious of ballots (voted by MPs) to determine 2 candidates who are sent forward to a ballot by all Conservative party members.

In the 1st ballot (5th July) May obtained more than half the votes of MPs with 165 votes, followed by Leadsom with 66, Gove with 48, Crabb with 34 and Fox with 16 votes. Fox was eliminated and Crabb withdrew leaving May, Leadsom and Gove to contest the next ballot.

In the 2nd ballot (7th July) May obtained 199 votes followed by Leadsom with 84 and Gove with 46.
Gove was eliminated, leaving May and Leadsom to proceed to the final ballot by all party members.

A few days later, 11 July, Andrea Leadsom withdrew from the contest and Theresa May was duly elected, unopposed, as the new leader of the Conservative Party without the need for a ballot by members.

On the 13 July, David Cameron relinquished his position as Prime Minister and Theresa May accepted a request from the Queen to become Prime Minister and immediately started creating her new government team.

Most notable positions in her cabinet are Philip Hammond as Chancellor, Boris Johnson as Foreign Secretary, Amber Rudd as Home Secretary, David Davis as Secretary of State for Exiting the EU (Brexit Minister) and Liam Fox as head of the Department for International Trade. Andrea Leadsom is appointed Secretary of State for the Department of Environment, Food and Rural affairs (DEFRA). Michael Gove and Stephen Crabb have not been appointed to positions in the new cabinet.

Labour Party

Jeremy Corbyn was elected as leader of the Labour Party after Ed Milliband resigned as leader following the 2015 General Election. His election as leader was never fully respected by his fellow MPs even though he had over whelming support from ordinary members of the Labour Party. (New members who had paid a joining fee of £3.00 were able to vote in the election).

After criticism of his lacklustre support for the Remain campaign,  the sacking of his Shadow Foreign Secretary Hilary Benn (25 June) who had expressed no-confidence in Corbyn’s leadership,  and resignations from over 20 members of the Shadow Cabinet,  a no confidence vote in his leadership  (28 June)  supported by 172 Labour MPs  vs 40 MPS supporting Corbyn resulted in a formal challenge to his leadership.

Angela Eagle announced her intention to contest the leadership on 11 July. After some debate by the National Executive Committee (NEC) of the Labour Party (12 July), it was determined that Corbyn could be included in the contest without needing nominations from other Labour MPs.  The NEC also decided to vary the rules that so that new members who had joined in the last 6 months  would not be allowed to vote. (130000 new members have joined the Labour Party paying their joining fee of £3.00 since the EU referendum). Registered supporters were, however, given the option to pay a further fee of £25  which would allow them a vote.

Owen Smith announced his intention to contest the leadership on 13 July.

Prior to nominations closing on 20 July, Angela Eagle withdrew leaving a straight contest between Corbyn and Owen Smith.

The ballot is not due to close until 21 September so the leadership contest is going to drag on for some time yet.

UKIP

Nigel Farage announced on the 4 July his intention to resign as the UKIP leader as he had achieved his aim which was to get the UK out of the EU .

http://www.bbc.co.uk/news/uk-politics-36702384

SNP

The Scottish First Minister, Nicola Sturgeon was quick to make a statement (24 June) claiming it was democratically unacceptable for Scotland to be taken out of the EU against its will. She also stated that a  second referendum for independence for Scotland from the UK was highly likely. This is a theme that is likely to remain for some time.

Nicola Sturgeon travelled to Brussels on the 29 June in an attempt to talk with EU leaders about Scotland  retaining their membership of the EU. She was rebuffed by Donald Tusk, President of the European Council, who felt it would not be appropriate, although she did meet with Jean-Claude Juncker, President of the European Commission, and Martin Shulz, President of the European Parliament.

It is likely that the only way for Scotland to become members of the EU would be to follow the application process in the same way as for any other State. This could only happen if Scotland were independent from the UK

 

EU Referendum 2016 – Results

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The referendum on continued membership of the European Union was held on June 23 2016 and the results were declared on June 24 2016.

The following figures were obtained from the Electoral Commission

http://www.electoralcommission.org.uk

The total electorate in the UK (the number of people registered to vote) was 46,500,001

England: 38,981,662 (83.832%)
Scotland: 3,987,112 (8.574%)
Wales: 2,270,272 (4.882%)
Northern Ireland: 1,260,955 (2.712%)

The total number of votes cast was

Remain – 16,141,241 (48.1%)

Leave – 17,410,742 (51.9%)

giving an overall turnout of 72.15%

There were 25,359 (0.06%) rejected ballot papers.

12,922,659 (27.79%) people did not use their vote

Further analysis of the figures shows how the individual countries voted, with England and Wales having majorities to LEAVE,  while Scotland and Northern Ireland having majorities to REMAIN

RegionResults

The actual EU Referendum results data (in CSV format) is available and provided by the Electoral Commission at

http://www.electoralcommission.org.uk/find-information-by-subject/elections-and-referendums/upcoming-elections-and-referendums/eu-referendum/electorate-and-count-information

Is the EU referendum legally binding ?

Referendums in the UK, in constitutional terms,  are not legally binding so the Government could (in theory) ignore the results although this is unlikely to happen. It is, however, necessary at some point for the UK Government  to repeal the 1972 European Communities Act, requiring a vote in parliament, in order to ultimately leave the EU.

Making up your mind

by Mick 0 Comments

Organisations and individuals for both sides of the argument appear to have been using strategies based on Fear, Uncertainty and Doubt (FUD). This makes it difficult in deciding which way to vote because it is hard to interpret the information and whether the data being presented is accurate or not.

So how can you decide? Here is a summary of some, hopefully useful, information.

The Common Market was designed to create a Free Trade area among its member states by removing trade barriers and establishing a common external trade policy with non members. The creation of a single European economic area based on a common market was the fundamental objective of the Treaty of Rome. The UK joined the Common Market (EEC) in 1973 and a referendum on membership in 1975 voted to remain as members. 1 A popular impression at the time was that the referendum was to decide whether the UK wanted to be a member of a Common Market providing Free Trade with and between other European countries.

The EEC became the European Union (EU) in a later treaty 2 which was agreed to by the UK Government and politicians at the time. There are currently 28 members states. 3

The forthcoming referendum (23 June 2016) is the first opportunity, since the referendum in 1975, for the Electorate in the UK to support continued membership of the EU or to leave the EU altogether. 4 The Labour manifesto for the 2005 election promised a referendum but never delivered. 5

The UK is one of 28 “voices” in the EU. The EU will increase in size in the future with more countries joining. While individual countries have a voice at the EU negotiating table, their influence diminishes as more countries join the EU.

The European council defines the EU’s overall political direction and priorities and sets the EU’s policy agenda. The members of the European Council are the heads of state or government of the 28 EU member states, the European Council President and the President of the European Commission.  6

The EU parliament is made up of 751 members who are directly elected by member states every 5 years using proportional representation. The number of MEPs from each country are determined by the population of that country with the UK currently having 73 MEPs (just under 10% of the total).  7

The European Commission is the EU’s executive body 8. It represents the interests of the European Union as a whole (not the interests of individual countries).

  • Propose legislation
  • Enforce European law
  • Set objectives and priorities for action
  • Manage and implement EU policies and the budget
  • Represent the Union outside Europe

A new team of 28 Commissioners (one from each EU Member State) is appointed every five years. Past members from the UK, chosen by the government of the time, include Leon Brittain, Neil Kinnock and Peter Mandelson.

The combined size of the EU gives it a major voice in the world where it represents its member countries on global issues such as

  • Climate Change
  • Energy
  • Environmental Issues
  • Terrorism
  • Migration

The EU has an interest and/or influence in many different areas affecting the UK, from Human Rights to Transport and Trade.

Areas of interest include, but are not limited to:

Agriculture, Audiovisual and media, Budget, Climate action, Competition, Consumers, Culture, Customs, Development and Cooperation, Digital economy & society, Economic and monetary affairs, Education, Employment and social affairs, Energy, Enlargement, Enterprise, Environment, EU citizenship, Food safety, Foreign and security policy, Fraud prevention, Health, Humanitarian aid and Civil Protection, Human rights, Institutional affairs, Justice and Home Affairs, Maritime affairs and fisheries, Multilingualism, Regional policy, Research and innovation, Single market, Space, Sport, Taxation, Trade, Transport

The EU Constitution guarantees the free movement of persons, goods, services and capital within the Union (the so called “four freedoms”) and strictly prohibits any discrimination on grounds of nationality.

The UK can trade freely with other members in the EU without tariffs, or other restrictions, in a combined market of more than 500 million people. The EU negotiates Trade Agreements with other countries on behalf of all member states providing a powerful worldwide negotiating position.

The EU has created a number of directives and regulations, relating to Workers’ Rights that have been enshrined in European Law, from minimum paid leave to increased pregnancy and maternity rights.

Every EU worker has certain minimum rights 9 relating to:

  • health and safety at work: general rights and obligations, workplaces, work equipment, specific risks and vulnerable workers
  • equal opportunities for women and men: equal treatment at work, pregnancy, maternity leave, parental leave
  • protection against discrimination based on sex, race, religion, age, disability and sexual orientation
  • labour law: part-time work, fixed-term contracts, working hours, employment of young people, informing and consulting employees

Citizens of Europe have the freedom to work study and travel within EU countries without restriction. Freedom of  movement across the EU opens up job opportunities for UK workers willing to travel and enables UK companies to easily employ workers from other EU countries.

Benefits (minor) arising as a result of “freedom of movement” rules include

  • The European Health Insurance Card (EHIC) 10
  • Driving licences are valid across Europe
  • Mobile phone roaming charges are being removed across the EU. 11
  • etc

they demonstrate the ability of the EU to introduce common, universal benefits  which are the same for all EU citizens.

Another side effect, from the freedom of movement rules, concerns social security payments. All countries have their own system, some more generous than others. Payments can be claimed by any EU citizen in the country where they are resident according to that countries rules not the rules of their home country. This is somewhat contentious in the UK (because of the perceived generosity of the UK ?) and possibly other countries which may have more generous payments than others.

There are also other financial differences between countries, e.g. in minimum wage payments and cost of living etc.

Could the EU impose the same minimum wage and the same social payments across all member states in the EU ? This could happen if there was closer fiscal integration between member states.

One of the fundamental principles, defined in the treaties, is the “ever closer union” of member states. The exact details of this principle are not defined but are likely to include closer fiscal and political union.

Closer fiscal integration would mean a central European authority would set spending and tax rates for all member countries.

Political union is where member countries transfer most, or all sovereignty, to a joint government which is recognised internationally and has common home and judicial policies, a common foreign policy and security policy.

One of the moves in this direction was the introduction of a common currency, the Euro, across member states. Although the UK opted out of joining the other countries using the Euro, joining the Eurozone has not been completely ruled out in the future.

The world financial problems circa 2007-2008 subsequently caused problems for a number of countries in the Eurozone, most noticeably Ireland, Greece and Portugal.  The necessary process for their recovery  was determined by the EU and austerity measures were imposed on these countries.  12

Remaining in the EU

It is unlikely that  any radical changes would be made in the short term and it is pure speculation to try and guess what would happen in the future.

So here’s my pure speculation.

There are a number of indicators of how the EU wants to proceed in the future.

In the longer term the EU is likely to want to explore the possibility of closer fiscal and political union as mentioned in the existing treaties. Whether this would mean the EU becoming the “United States of Europe” or the “Federated States of Europe” is unknown, but is a concept worth considering as a future aim.

It is difficult to know how this would affect the UK and how committed the UK would be to closer integration although a referendum vote to remain could be viewed as the UK providing their approval for the EU to continue on its way.

As the size of the EU increases, the ability of the UK to influence decisions may be diminished simply because the proportion of their voting power is reduced. It is also uncertain whether it would be necessary for majority voting to be used more often in order to get the business done, but any changes to  the voting process could require treaty change.

From a financial point of view, items such as the EU Budget rebate, currently granted to the UK, could come under closer scrutiny and be reduced or even removed completely.

A question mark remains over the ability of the EU being able to effectively handle crises which may occur. The recent, and continuing, refugee crisis highlights the dis-united nature of member states in coming up with an acceptable resolution or plan for resolution.

Another issue may be the ability of the EU to ensure mechanisms for applying sanctions, such as fines etc. to member states who fail to obey EU law. 13

Leaving the EU

If the UK were to leave the EU, the process for leaving is defined by Treaty (Article 50) and the UK should begin a period of negotiation to decide on its terms for leaving and its initial relationship with the EU post exit. 14 This allows for a maximum period of 2 years (unless extended) in which to negotiate suitable terms for separation.

Leaving the EU is likely to be a staged process and will have significant geopolitical and economic consequences trying to unravel forty years of integration in a single step. There is an interesting document, Flexcit which describes a possible multi-phase approach to exit. 15

For other aspects of leaving the EU, it is difficult to predict what would happen in the short term but uncertainty can breed fear and it is possible for some disruption in the world financial markets.

A vote to leave is likely to throw global markets into turmoil and undermine confidence in the 28-nation trading bloc.

In the currency markets, Sterling appears to weaken as polls show an increase in the support to Leave although stock markets have remained relatively calm in the run-up to the referendum

US investors may also be vulnerable to a fall-out from a vote to exit. They have increased their allocation to British equities since May of last year, according to a separate report by Nasdaq OMX Group’s advisory-services unit. Those in Britain, on the other hand, have been the biggest sellers, it showed.

The euro weakened against the dollar on concern an exit would damage trade and encourage other members to renegotiate their relationships with the EU. 16

The long term future of the EU could also be threatened following the withdrawal of the UK but while some additional member countries may decide to hold similar referendums and vote to leave, there would likely always be a core of countries remaining to carry on the European dream.

In terms of its future trading position, while difficult to predict what would happen, the UK has an impressive résumé which may help 17

  • The UK has the fifth-largest national economy (and second-largest in the EU) measured by nominal GDP.
  • The ninth-largest in the world (and second-largest in the EU) measured by purchasing power parity (PPP).
  • The UK economy currently makes up 4% of world GDP.
  • The UK has been the fastest growing economy in the G7 for four consecutive years with 2.1% year on year growth in Q1 2016.
  • In 2014 the UK was the ninth-largest exporter in the world and the fifth-largest importer,  had the second largest stock of inward foreign direct investment and the second-largest stock of outward foreign direct investment.
  • The UK is one of the world’s most globalized economies.

 


 

Notes:

  1. http://eureferendum.kf12.com/the-1975-common-market-referendum/
  2. Consolidated Version of the Treaty on European Union
  3. http://eureferendum.kf12.com/what-is-the-eu/
  4. http://eureferendum.kf12.com/eu-referendum-june-23-2016/
  5. Extract from the 2005 Labour party manifesto: The new Constitutional Treaty ensures the new Europe can work effectively, and that Britain keeps control of key national interests like foreign policy, taxation, social security and defence.The Treaty sets out what the EU can do and what it cannot. It strengthens the voice of national parliaments and governments in EU affairs. It is a good treaty for Britain and for the new Europe. We will put it to the British people in a referendum and campaign whole-heartedly for a ‘Yes’ vote to keep Britain a leading nation in Europe.
  6. http://eureferendum.kf12.com/the-european-council/
  7. http://eureferendum.kf12.com/the-european-parliament/
  8.  http://eureferendum.kf12.com/the-european-commission/ 
  9. http://eureferendum.kf12.com/workers-rights-in-the-eu/
  10. http://eureferendum.kf12.com/european-health-insurance-card-ehic/
  11. http://eureferendum.kf12.com/mobile-phone-roaming-charges/
  12. An interesting article that examines the austerity measures imposed on Ireland claims that the Irish recovery was built on human rights violations and undermined long term social and economic development. http://www.irishexaminer.com/viewpoints/analysis/irelands-austerity-success-is-no-model-for-greece-340662.html
  13. http://eureferendum.kf12.com/uk-beef-embargo/
  14. Although no other member state has left the EU, Greenland voted in a referendum in 1985 to leave the EEC, following disputes over fishing rights. Greenland was originally part of Denmark which joined the Common Market / EEC together with the UK in 1973. Greenland gained their independence from Denmark in 1979 and subsequently held a referendum on their continued membership of the EEC
  15. Flexcit – The Market solution to leaving the EU http://www.eureferendum.com/documents/flexcit.pdfThis is not to say that this process would be followed but is an example of how the exit process could be achieved.

    A possible obstacle to the exit process could be The European Communities Act 1972 legislation. This is an Act of Parliament providing for the incorporation of European Union law into the domestic law of the UK. In the event of a vote to leave, would it may be necessary to repeal the Act and would MPs vote accordingly ? 18http://www.legislation.gov.uk/ukpga/1972/68

  16. http://www.businesspost.ie/brexit-could-send-europe-shares-down-25-per-cent/
  17. https://en.wikipedia.org/wiki/Economy_of_the_United_Kingdom

Principal EU-US trade disputes

by Mick 0 Comments

An interesting paper which outlines trade disputes between the EU and the US

The prospect of transatlantic free trade talks has brought the EU-US trade relationship, the largest bilateral trading relationship in the world, into the spotlight. Trade disputes account for a small fraction of the total volume of this trade, around 2% according to the Commission, despite often receiving prominent media coverage. But a number of long-running disputes between the EU and the US are indicative of the challenges negotiators of a bilateral trade agreement face.

Read more at:
http://www.europarl.europa.eu/RegData/bibliotheque/briefing/2013/130518/LDM_BRI(2013)130518_REV1_EN.pdf

UK Beef Embargo

by Mick 0 Comments

Bovine Spongiform Encephalopathy (BSE) is a disease that affects adult cattle and is commonly known as mad-cow Disease.

BSE attacks the brain and central nervous system of the animal and eventually causes death. It was first reported in cattle in the UK in 1986, but could have existed for longer without being detected. One theory about why BSE developed is that an older prion disease that affects sheep, called scrapie, may have mutated.

The prion was spread through cattle that were fed meat-and-bone mix containing traces of infected brains or spinal cords. The prion then ended up in processed meat products, such as beef burgers, and entered the human food chain. BSE is believed to be the cause of variant Creutzfeldt–Jakob disease, a fatal disease, in humans.

Because of the extent of the disease in cattle in the UK, the EU imposed a strict export ban in March 1996 on British beef and related products.

From 1st August 1999, the ban was amended to allow de-boned beef and beef products from the UK produced under the Date-based Export Scheme (DBES) to be exported. Under the DBES, the UK could export beef and products from cattle born after 1 August 1996, subject to a series of strict and limited conditions. These included requirements that the animal was between 6 and 30 months old, had been clearly traced and identified throughout its lifetime, its mother did not develop BSE, and that beef from cattle older than 9 months was de-boned.

Dispute between the UK and France

The French Government, however, continued to ban the import of beef and beef products from the UK.

In January 2000, the commission brought an action against France before the Court of Justice. In December 2001, the ban was ruled illegal by the European Court of Justice. The judges agreed with commission lawyers that no national law could justify a refusal to apply community law. France’s decision to maintain the embargo sparked a trade row, with British farmers threatening tit-for-tat bans on French goods.

The deadline for France to lift its ban on beef imports from Britain ran out at midnight on Thursday 11 July 2002, and the country faced the threat of fines by the European Commission.

On 25 October 2002 the French Government formally lifted its ban (in order to avoid any fines).

The Commission  withdrew its scheduled action in the ECJ on 13 November 2002 asking the Court to impose a penalty of £100,000 per day on France for failure to lift its ban in accordance with an earlier ECJ Judgment. It stated that it was satisfied that compliance with EU law had been achieved.

No fines were imposed and due to the European constitution, were not able to be backdated because they cannot be imposed retrospectively.

The Commission also stated that the action for costs against France would remain live and that following the case the Commission would review the provision under Article 228 of the treaty with a view to ensuring more effective mechanisms for applying sanctions to Member States who failed to obey EU law.

The UK Government regretted the decision by the European Commission not to pursue the case for penalties against France. The UK supported the Commission throughout and believed that pressing this case would have sent a firm message to Member States that no one country can avoid its obligations and responsibilities. Working through EU institutions was the best way to resolve this difficult issue, and it was thanks to the direct action by the Commission and the ECJ that the French Government lifted its illegal ban on British beef.

In 2006, the EU agreed to lift the embargo completely and the UK was allowed to resume exports of all live animals born after 1 August 1996.

References:

BSE: UK beef embargo to be lifted
http://europa.eu/rapid/press-release_IP-06-278_en.htm

Europe’s BSE crisis
http://news.bbc.co.uk/1/hi/world/europe/1142660.stm

British beef: Commission satisfied that EU law is now respected
http://europa.eu/rapid/press-release_IP-02-1671_en.htm

EU fine re British Beef
https://www.whatdotheyknow.com/request/eu_fine_re_british_beef

BSE: Lifting restrictions on the trade of cattle and beef from the UK
http://europa.eu/rapid/press-release_MEMO-06-108_en.htm

The Beef Hormone dispute

by Mick 0 Comments

Cattle are given growth hormones in order to promote faster growth.

In order to protect consumer health and safety, the EU has banned imports of hormone treated meat and only allows restricted imports of meat that is certified as produced without the use of hormones.

This has caused a dispute with the US, known as the Beef Hormone Dispute, that has been ongoing since 1989, and is still on-going. The dispute has resulted in the imposition of tariffs on a number of products exported from EU countries to the US.

Read on for more details about the dispute.

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