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Tuesday, July 22, 2014

Government's Balance of EU Competences Review sets out need for reform - finally

Today, the UK Government has published the third batch of its reports reviewing the ‘Balance of Competences’ between the UK and the EU. We have noted before that many of the previous reports, whilst interesting on much of the detail, have for various reasons turned out to be rather disappointing and dodged the major questions facing Britain in the EU, so how do today’s tomes compare?

Most interestingly, the controversial, and much delayed, report on the free movement of persons has finally been published and, unlike many of the previous reports, it is much clearer about the Government's thinking in what is one of David Cameron's primary targets for renegotiation. The report, which was trailed in today's papers and quotes extensively from our submission to the consultation, which you can read in full here, makes the following points:
  • "Whilst there is broad consensus that highly skilled migrants from the EU have been beneficial to the UK, there is less agreement regarding low skilled migration, with some arguing that gains for employers are offset by negative impacts on the lowest paid workers."
  • "The scope of free movement rights has now expanded beyond their original intention, and is no longer limited to economic factors."
  • "Successive judgments by the ECJ have interpreted the right to free movement set out in the Treaties and the Free Movement Directive broadly, with the consequence of expanding the rights of entry and residence which may be asserted in reliance upon them, and consequently restricting Member States’ competence in this area."
  • Other concerns expressed were criminals' exploitation of the rules, the localised impact on public services, and falling public confidence in the concept of free movement.
Specifically regarding the existing rules on EU migrants' access to welfare, this is the key passage:
"The Government considers that now is an appropriate time to review the EU level rules with a view to modernisation and ensuring they are fit for purpose in the EU of today. The rules have evolved beyond the original scope as the EU has evolved and the interaction between rules on residence and social security coordination becoming increasingly complex. This complexity has led to an increasing number of challenges through the ECJ, creating uncertainty and, in the majority of cases, weakening the ability of Member States to determine how their systems operate."
"Without reform, legitimate public concern about how EU migrants access social security in other Member States is likely to significantly undermine support for the principle of free movement."
This is the most explicit any of the BoC reports has been about the need for reform and, while there is no settled policy prescription (the report discusses OE's and David Goodhart's reform proposals at length), the key issues have been clearly identified.

This is apparently the third iteration of the report, following several rounds of coalition ping-pong. Nevertheless, it highlights the degree of cross-party consensus on the need for reform of benefits rules - which Labour has also called for. It would however be intriguing to know what was cut in the various edits.

We will be leafing through the other reports published today and will return to them on the blog later this afternoon.


Jesper said...

Which group is least afraid of competition?
-the skilled? (what is the modern definition)
-the low skilled?
-the connected?

The ones who live by their connections have nothing to fear from extra competition by an influx of outsiders. Everybody else has the risk of one way or another feel the effect.

The stickiness of wages, economists are familiar with the concept, makes it very difficult for companies to reduce wages for the ones already in employment.

However, anyone who has lost a job or entered the workforce will encounter the extra competition for jobs, the ones in employment will not have to deal with extra competition.
The result? Since most people did not lose their job the extra competition is only experienced by the ones who lost their jobs or entered the workforce for the first time. Increased competition -> downward pressure on wages.

Lies, damned lies and statistics. Since most did not encounter any competition the statistics will show that the effect on average is small. However, the ones who were affected got hit badly. But they are not connected so who cares?

Rollo said...

Record youth unemployment; a big increase in Migration from the EU. Hardly a coincidence.

Anonymous said...

Control our borders, and turn away ANYONE who isn't gong to prove to be a net economic benefit to the UK.

R Davis said...

"free movement of persons" is fine as long as the said persons - migrant workers are not being used & abused by the host nation & it's, corporate & business sectors.
i.e., The Australian government & it's media pets; told the whole world that Australia
(lie NO:1) has no skilled workers
(lie NO:2)that Australians were too lazy to work.
Hence they imported foreign workers to take our place & said it is cheaper & indeed, they actually work.
In fact these foreign workers were brought in by an employment agency who TAX DEDUCTED the expense - They then hires out these skilled workers for e.g. $1.000 a day to a business. The business TAX DEDUCTED the monies paid the the employment agencies for the services of the foreign workers.
The foreign workers were paid only a small fraction of the $1.000 per day being paid to the employment agency & some foreign workers were even left stranded after their usefulness was over.
TAX DEDUCTIBLE is the name of this scam & the Australian government is in it up to their necks.

Anonymous said...

Whilst there is broad consensus that highly skilled migrants from the EU have been beneficial to the UK, there is less agreement regarding low skilled migration, with some arguing that gains for employers are offset by negative impacts on the lowest paid workers.

1. This impacts the state finances too. Over supply of cheap unskilled labour is forcing wages down to such a point that both locals and immigrants have to claim "top up" benefits to survive.

2. Local authorities in London are having to build 20% more infrastructure (hospitals and schools etc) to support immigrants who are not even making a contribution to the tax base or economy.

And all at a time when we have a record public debt of GBP1.3Trn which is being passed on to future generations of our children to pay off. What life are they going to have?

It is abundantly clear to me that our own politicians are incapable of telling us the truth on this matter even though we pay their wages and they are supposed to represent us.