Who is Lord Hill? (The UK's new appointment to be the UK's EU Commissioner)

The most visited Wikipedia page from Brussels IP addresses today will be Lord Hill's - the UK's European Commissioner nominee. Lord Hill is currently the leader of the House of Lords.

We have previously argued that David Cameron should "send forth to Brussels the best he has." The reason is simple: reform is fundamental to the UK's EU membership so the UK should put forward its best candidate to secure one of the 'big jobs' in the Juncker Commission and maximise the chances of negotiating success on all levels.

In 2009 Gordon Brown made a serious mistake in coming late to the game and sending a little known Peer, Cathy Ashton (also leader of the House of Lords incidentally) and ended up with a job that nobody else wanted. Have the lessons been learnt? Well, Cameron certainly hasn't sent the guy with the highest profile, instead prioritising avoiding a by-election, but it's too early to tell whether Lord Hill will sink or swim. He could turn out great.

But who is Lord Hill?

Well he's certainly not a household name but has been in the Cabinet albeit as a Lord. Here is his biography:

• Conservative Research Department 1985-86 
• Special advisor to Rt Hon Kenneth Clarke at Department of Employment 
• DTI and Department of Health 1986-89 
• Lowe Bell Communications 1989-91 
• No 10 Policy Unit 1991-92 
• Political secretary to Prime Minister John Major 1992-94 
• Senior consultant Bell Pottinger Communications 1994-98 
• Director Quiller Consultants 1998-2010; (a part of Huntsworth Plc) 
• Under-secretary of state Department for Education 2010-13 
• Leader of the House of Lords and Chancellor of the Duchy of Lancaster 2013-2014

Beyond that it is reportedly that he unsuccessfully attempted to resign as a minister in 2012, and recently ruled himself out as a candidate for European Commissioner, saying when asked

"Non, non, non. First, I don't believe I'm going to be asked. Secondly, I like it here. I quite like it at home, in the British Isles."

That's not the first time a politician has said something similar and ended up in that very position, though. Lord Hill is definitely well connected in the PR industry and knows the Conservative party. He knows the political system and the art of political public relations. Plenty of people say he's a 'fixer' who can work the corridors in Brussels - something which Cathy Ashton wasn't able to (partly because of her job which involved long absences from Brussels). It's too early to jump to conclusions.

Which Commission post should the UK push for (clue: not energy)?

When it comes to EU top jobs, if you snooze you lose, as
Gordon Brown discovered to his cost in 2009

In a new briefing published this morning we argue that after the row over Jean-Claude Juncker’s appointment, David Cameron can regain the initiative by sending a heavy-hitter - and not simply someone who happens to be available - to Brussels with the view to securing a top job in the new European Commission. But here is the crucial question - what job should the UK push for?

Here are the key points from our briefing:

• Even though conventional political wisdom says that it’s impossible for the UK to bag the internal market portfolio, this is precisely what David Cameron should ask for, not least given that Germany, in particular, may want to give the UK a quick win in order to reduce the risk of Britain leaving the EU.

• To boost the chances of this happening, financial services could be split off from the internal market portfolio. However, in this scenario, the key is for this portfolio to go to a country that actually has a meaningful financial services industry, or the strategy could backfire.

• The second best outcome for the UK would be to secure the competition portfolio. competition is by far the most powerful DG, with the power to impose multi-million euro fines, prevent mergers and restructure banks. The portfolio would allow the UK to ensure a business-friendly environment and ensure fair competition within the single market by preventing discrimination against non-euro member states. It also establishes a political link to eurozone - it’s impossible for eurozone leaders not to engage with the Competition commissioner.

• The Trade portfolio is often mooted as a good one for the UK, and on substance it certainly is. Being able to conclude the EU-US free trade deal (TTIP) would be a great scalp. However, it is important to remember that Commissioners’ ability to impact EU policy is not limited to their own briefs; many policy proposals are debated within the College of Commissioners offering every Commissioner the opportunity of raising any concerns at an early stage. Just as the EU’s High Representative for Foreign Affairs – currently held by Baroness Ashton - the Trade Commissioner is often absent from Brussels, thereby limiting the UK’s overall influence.

• The energy portfolio would be a relative disappointment for the UK. Yes, energy is a hugely important issue for Europe – and liberalised single market could help tremendously in both boosting energy security and keeping cost down. The Energy Commissioner could also play a key role in keeping the EU out of shale gas regulation – a key UK objective. However, the big push needed to change the political culture in Europe for this to happen won’t come from the European Commission and will take a long time to achieve anyway. This battle will first need to be won in national capitals. Taken together though, the Competition Commissioner probably has more sway over the EU energy market by being able to strike down attempts at creating national champions and new forms of intervention – as illustrated by the current stand-off between Germany and the Commission over Berlin’s rebate for energy intensive industries from its domestic renewable surcharges.

• Arguably, the social affairs brief would be better than the energy portfolio given how hugely important the rules on access to benefits for EU migrants are for the wider debate in the UK.

Just as important as the UK’s portfolio is the distribution of other key portfolios among reform-minded countries like the Netherlands and Sweden. Cameron needs to be far cleverer than Gordon Brown was in 2009, when France got internal market and Romania agriculture. This won’t be easy though. Having lost out on one of the three ‘top jobs’, France could push for either the competition or internal market brief. However, if France keeps the internal market, financial services should be split off as well.

Finally, the appointment of the new President of the European Council will also be crucial – in some ways just as significant as that of the Commission President – given that this will be the person in charge of brokering Cameron’s negotiations with other heads of state and government.

It's certainty all to play for.

Off target: The case for bringing regional policy back home

In a weighty new report published today we take a critical look at the EU’s structural funds which are the means through which the EU implements its regional policy. We estimate that over the course of the current 7 year EU budget, the UK will pay in around £30bn to the EU’s so-called structural and cohesion funds, but will get back just under £9bn.

In our press release, we argue that:

“Limiting EU regional spending to poorer countries would be a win-win situation for both Britain and Europe. It would channel more cash to the newest member states and allow the UK to spend exactly the same amount on its regions as it does now, with the option of adding the several billion that it would save from streamlining the structural funds. It would also eliminate a range of additional costs and allow the Government to radically improve the targeting of funds towards poorer areas and to viable projects.”

What exactly is the problem?

The EU aims to reduce regional disparities but under the current system, every region in every member state receives at least some financial support, regardless of how wealthy it is. This means a significant part of the UK’s contribution goes to member states with a comparable level of income. According to our calculations, of the UK’s overall contribution, 70% goes to other member states, 25% is redistributed within the same UK region in which the funds were raised, and only 5% is redistributed between richer and poorer regions within the UK.

This recycling exercise is fundamentally economically irrational, and even the Commission has recognised that it creates “considerable administrative and opportunity costs.”

It also means that most UK regions, even the most disadvantaged, are short-changed because they pay in more than they get out. For example, the West Midlands, which has the lowest disposable income per capita in the UK, pays £3.55 into the structural funds for every £1 it gets back. Other regions that do badly from the current set-up include the North-East, Merseyside, Lincolnshire, Northern Ireland and parts of inner London.

While there is a strong case for having an EU regional policy to assist the poorer member states that have joined the EU since 2004, there is literally no “added European value” – the criteria for justifying EU-level as opposed to national-level decision making – to keeping all member states locked in.

So what can be done?

Our proposal would see the implementation of an eligibility threshold of 90% of EU average income, above which member states would no longer receive any support. This would on one hand enable the remaining funds to be focussed exclusively on the poorer member states, while allowing richer member states to still make significant savings and regaining control over their regional policies and spending. This is broadly in keeping with the position adopted by the previous Labour Government.

What impact would this have?

Such a measure would create a whole range of winners, and a handful of ‘losers’. To illustrate, if this policy had been adopted for this EU budget period (2007-2013):

• France would have emerged as the biggest winner from focussing the funds on the poorer states, cutting up to €12.8bn from its net contribution to the EU budget over seven years.
• The UK comes second, with a net saving up to €5.1bn (£4.2bn) over seven years.
• Importantly, all new Central and Eastern European member states would see a rise in the amount of subsidies they receive (except for Slovenia under one possible scenario), with Poland gaining the most.
• Italy, Spain and Greece would all lose out substantially, but they are already set to get a smaller share of EU subsidies as recent enlargements continue to erode their net receipts. More importantly, to cope with the eurozone crisis, these countries need far more responsive and targeted support than is currently being offered by the structural funds.

The way ahead for the Coalition

It appears the Coalition has opted for a ‘safety first’ approach with regards to negotiations over the EU’s next long-term budget (focussing on keeping the overall amount down and protecting the UK rebate). However, pushing for a more ambitious reform along the lines of our proposal would see a significant reduction in the size of the budget and would be better suited to building alliances with like minded member states.

Devolving regional policy from the EU would be a good move for the Coalition if it is to come good on its commitment of ‘rebalancing’ the UK economy away form its reliance on the South-East and financial services, and place to start. The UK could then launch a revamped regional and re-generation policy which would start with the £8.7bn that the UK currently spends via the structural funds, and then re-invests the additional £4.2bn saving from the reform. This would mean virtually all UK regions would experience a rise in the amount of subsidies they receive by around 45%.

In 2003, then Chancellor Gordon Brown argued that:

“the economic and social, as well as democratic, arguments on structural funds now and for the future so clearly favour subsidiarity in action, there is no better place to start than by bringing regional policy back to Britain”

Almost a decade later, this statement still points out the path ahead for the UK.

Ouch!!!

Usually mild mannered Swedish politicians have certainly displayed an unusual willingness to communicate strong opinions on European political issues of late. After some forthright comments on twitter from foreign minister Carl Bildt on Lybia recently, we now have finance minister Anders Borg eviscerating Gordon Brown’s reputation and lingering chances of becoming the new head of the IMF.

Speaking to Jeff Randall on Sky News, Borg said:

“It would be difficult to have a person that is so responsible for the fiscal crisis in the UK at the helm of the IMF… a country with a 10% deficit is I think a little bit problematic… the IMF today is very much about restoring fiscal responsibility”

Borg went on to tell Svenska Dagbladet that:

“He has been one of those who has argued for the deficit politics that we now see the results of. It would be odd to argue for him.”

For Gordon Brown, the self-styled saviour of the world, that has got to hurt. Nevertheless, it's refreshing to hear politicians who are not afraid of speaking their mind.

The line between fact and fiction

Although Europe has been seemingly neutralised as an election issue, and the main political parties have reached a rather settled position on the Lisbon Treaty, it does not give them license to play fast and loose with the facts of what the Treaty means for the UK.

Having been inspired by the great idea behind the Channel 4 Fact Check blog, we decided to try and apply some of that diligence to recent comments by Gordon Brown about why Labour reneged on the promise in its 2005 manifesto to hold a referendum. Answering questions from readers of the Yorkshire Post (around 6 minutes into the video) he said:

"Have people really seen a huge difference in the relationship between us and Europe over the last few weeks? The reason we did not have a referendum on this is that there was no major constitutional issue that had to be dealt with. They abandoned the concept of a constitutional treaty. They actually specifically said, the European Union, that it was abandoning that idea and then they went to what is a more modest treaty, the Lisbon Treaty, where all what we called our 'red lines', that is no interference with social security or national security, we got what we wanted on policing and justice, we got what we wanted on economic development, we got the freedom to continue to have our own foreign policy - none of these things were affected."

Quite a lot of total misrepresentation there, so we will do our best to debunk some of those fallacies.

• Despite repeating his argument that the Lisbon Treaty was vastly different from the European Constitution, and therefore no referendum would be required, everyone and sundry has admitted that they are essentially the same document (as well as the PM himself). We did the side-by-side comparison proving that they were practically identical. Valery Giscard d'Estaing, author of the original Constitution, said that it still contained "all the earlier proposals" of the Constitution would be maintained in the Lisbon Treaty, even if they had to be "hidden" or "disguised". Straight-talking German Chancellor Angela Merkel said it a little more bluntly: "The substance of the Constitution is preserved. That is a fact."
  
• The Government's red lines were an absolute myth. See our research on how they crumbled, one after the other.
  
• Not only did the Charter of Fundamental Rights become legally binding (Tony Blair said it wouldn't), but the Government most certainly did not get what they wanted on policing and crime. They wanted that entire policy area excluded from the jurisdiction of the European Court of Justice, but failed miserably, as well as arguing unsuccessfully for retention of unanimity in decision-making in this area. They also opposed the European Public Prosecutor, new powers for Eurojust to initiate criminal investigations, and powers for the EU to set minimum sentences...all unsuccessfully however. Only someone who has never, ever got what they asked for could attempt to spin this as 'getting everything we wanted'.
• Perhaps the EU's increased power in justice areas is what led the Lord Chief Justice Lord Judge to warn a few weeks ago, "The Treaty of Lisbon has brought criminal justice matters to the core of the EU and with it the jurisdiction of the Luxembourg court." This means that if the UK does opt into the new justice and home affairs legislation,

  decisions of the Luxembourg court on issues arising out of the Treaty of Lisbon, even to the extent that they involve criminal matters, would become binding on all of us... The development of the European Union, and the extended jurisdiction of the European court in criminal matters, will have a significant impact domestically. Twenty years down the line where will we be?

  No change, eh?
  

• Also on foreign policy, despite promising that it wouldn't be moved into qualified majority voting, this details in just how many areas of foreign policy the Government gave up their veto.
  
• As for the question of social security, read this research to see that there was no new 'red line' on the question of social security in relation to the Lisbon Treaty, compared with the original negotiations on the Constitutional Treaty.

Another real hum-dinger came when he said this in conclusion:

"But no constitutional concept was involved. There was no major constitutional or institutional change because of the Treaty, and I think everybody knows, because they haven't seen this huge difference between what happened at the end of last year and what's happening at the beginning of this year."

To suggest that the Lisbon Treaty was not a major institutional change is, of course, absolutely ridiculous and suggests that the Prime Minister has little idea of exactly what competences have been transferred to Brussels with the ratification of the Treaty.

For a comprehensive guide of what powers the Lisbon Treaty gave to the EU see our reseach here.

Moreover, some of the improvements that were promised (increased powers to deal with crucial issues such as climate change, or more scrutiny for national parliaments) have been well and truly debunked in the last couple of months since Lisbon came into force.

The scrutiny promised to Parliament over EU proposals has collapsed on various occasions (see here and here) and the EU was widely viewed as having been sidelined at the Copenhagen climate change conference.

Sadly, they may get away with not talking about it, but Labour's failure to hold a referendum on the Lisbon Treaty amounts to a clear and unequivocal broken manifesto promise. To argue otherwise is a direct insult to democracy in general and British voters in particular.