Mr Miliband and Mr Clegg have been too ready to condemn the idea that the UK needs a new relationship with the EU. They are in denial about the massive amount of power the EU wields over our government. They should try reading a bit more. They should start with a recent publication of the UK government entitled “Europe 2020: UK National Reform Programme 2014″.
This extraordinary and little discussed document is 91 pages long. It is the UK’s government response to the “country specific recommendations addressed to the UK by Heads of state or government at the European Council in June 2013….” and reports “against policies in support of the Europe 2020 Strategy priorities…”
The UK was told to do six things. The first is to “implement a reinforced budgetary strategy… ensure the correction of the excessive deficit….prioritising timely capital expenditure with high economic returns…in order to raise revenue make greater use of the standard rate of VAT”.
I have no disagreement with the EU’s view that we need to remove the excessive deficit. My complaint is that it should be none of their business, but something we settle here in the UK. As a good European Mr Miliband under this requirement would have little scope to change the current UK approach to spending and borrowing. It is interesting that the EU is effectively critical of Labour’s heavy cuts in public capital spending which they put in in 2010. Their words seeking more public capital expenditure do not seem to include HS2 as that is not a project showing “high economic returns”. Mr Miliband might also worry about the EU’s belief in raising VAT further, when he has been an opponent of higher VAT.
The second requirement is to “increase housing supply, including through further liberalisation of spatial planning laws…take steps to improve the functioning of rental markets, in particular by making longer rental terms attractive to both tenants and landlords”. This seems to have already inspired Mr Miliband to adopt just such policies, so he will probably have no difficulty with it. However, the EU also warns against land and property taxes which impede residential construction, which he might find more annoying.
The third is to do more work on training and apprenticeships.
The fourth is to improve work incentives through fair welfare reforms, and to accelerate measures to cut the costs of childcare. This includes support for Universal Credit, a policy Mr Miliband is not keen on.
The fifth is to improve the supply of bank finance and strengthen competition in banking. Labour in office did the opposite by encouraging all too many inappropriate banking mergers.
The sixth is to “facilitate a timely increase in network infrastructure investment…provide a stable regulatory framework for investment in new energy capacity”. I love the irony of this one. The EU has required the UK to generate more power from non carbon sources, and is now querying the level of subsidy needed to do just that!
The UK government has tabled 51 statistical indicators to allow the EU to monitor progress on these matters and criticise us in the future if insufficient progress is made.
Doubtless pro Europeans will claim that this is guidance, not mandatory in the case of the UK. That is not entirely true. This work includes, for example, the renewable energy and carbon dioxide reduction targets which the UK has to follow under EU law. The UK’s position in the EU “semester” or common budget controls is ambiguous, with the EU’s role clearly growing despite the lack of a power to fine the UK if it does not comply with the EU’s budgetary demands for the UK domestic budget.
All of this control , guidance and legal requirement over central issues of public policy is appropriate for countries in a currency union moving rapidly towards a political union. It is not appropriate for an independent country which wishes to have good relations and plenty of trade with the neighbours. Were Mr Miliband to become Prime Minister, he might start to find it all too intrusive, as clearly some of it is not in accordance with his views on budgets and tax.