The Beginning of the End of the Road? Britain and the European Council meeting, 8/9 December 2011

The meeting of the Heads of State and Government in the European Council in Brussels on 8/9 December 2011 marks nothing short of a caesura in the UK’s almost thirty-nine years of membership of the European Union. There are five principal points to note from this:

1. Regardless of the content of the new intergovernmental treaty, the fact that the somewhere between 23 and 26 countries are likely to sign up for this, with potentially only the UK on the sidelines, represents a spectacular failure of British diplomacy. Hitherto, the UK’s underlying approach to European negotiations had always been predicated on the idea of being in the room when the decisions are taken, even if Britain did not always formally participate in the outcomes of these decisions. And when it did oppose proposals, the British government has generally managed to ensure that it is not the only country doing so. Of course, one could argue that this ‘having your cake and eating it‘ tactic could not continue indefinitely; nonetheless, it is David Cameron, not John Major or even Margaret Thatcher, who will go down in history as the first UK Prime Minister to have failed on this account.

2. In truth, there was little chance of Cameron ever agreeing to the proposed new treaty. For one thing, the City is not only a major contributor to the British economy, but also to the Conservative Party (see the FT’s telling blog on this issue) – given this, it would have been astonishing had he agreed to more regulation of financial services. Second, had he signed up to a treaty it would have meant, at best, a drawn out and tortuous parliamentary ratification process (with Eurosceptic backbenchers literally queuing up to demand repatriation of powers) or at worst a full-blown referendum on Britain’s membership of the EU, with terminal consequences for the Conservative Lib Dem coalition. It’s a moot point whether this prompted a deliberate strategy by Cameron to deploy his veto – Charles Grant of the CER certainly seems to think so.

3. One might therefore even be tempted to show understanding for the Prime Minister’s decision – if only it had not come at such a terrible price for the UK. Although the UK has de facto been outside key EU policies (the Euro, Schengen, Justice and Home Affairs / immigration) for many years now, that exclusion has now been institutionalised. Moreover – and this is perhaps the central point of this posting – it is an illusion to suppose that Britain will still have a full say in matters concerning the Single Market. The new treaty will spell much closer coordination and integration for participating member-states and to expect that this will not have implications for the forming of common positions in other policy areas, such as CAP and the Single Market, is frankly rather naive. It is not, as the Prime Minister suggested in his post-summit press conference, a question of whether EU officials will or will not support the work of the new treaty: in the EU, most decisions are prepared informally in the corridors between plenary meetings. Yet if the UK from the outset is not in the corridor, it cannot be part of that decision-making process. The very real likelihood over time, therefore, is that the UK will increasingly be presented with a series of faits accomplis by the other member-states, which it will have to accept, or face being outvoted on.

4. The decision to wield Britain’s veto formally has also cost an enormous amount of political capital. Already, patience with Britain has been wearing thin, but it has now erupted into open anger. The situation was not helped by some very poor preparatory work by the British government – in particular, David Cameron made no real attempt to win allies for his position, preferring instead to ‘go to Brussels’ and fight it out, mano y mano, with the other leaders. The BBC has an interesting collation of responses to Britain from around the EU, but the palpable anger in the comments by the Lithuanian President, Dalia Grybauskaitė, in her comments to German television gives the best impression of how isolated the UK now is.

The summit, therefore, has left Britain more on the margins of the European Union than at any previous time in its history. Its outcome moreover now poses questions of a fundamental nature about the UK’s future role and position in the EU, which, ultimately, may even lead to referendum on the UK’s membership itself. That may cheer the hearts of the Conservative Eurosceptic Right, but it is scarcely a credible position for a relatively small (and heavily indebted) trading nation on the northwestern fringes of Europe to take.

Cameron’s EU Budget ‘Victory’

The Prime Minister David Cameron claims he has “succeeded spectacularly” in seeing off a potential 6% EU budget increase. Mr Cameron has spent much of Friday taking credit for putting together an alliance of 12 mostly old, rich Member States in favour of a smaller 2.9% increase in the Community budget. Even during the present period of self-imposed austerity, the size of the increase in the budget is actually rather uninteresting – after all, the Union spends a fraction more than 1% of the aggregate GDP of the EU-27. This post is also not concerned with the rights and wrongs of whether rich Member States should really be repatriating funds away from assisting poorer ones.

What is interesting about Mr Cameron’s grandstanding today are three things.

First, what Mr Cameron has provided us with a textbook example of how Member States (and the UK in particular) portray the business of Brussels negotiations. In this game, the Government stalwartly defends the national interests of [British] taxpayers from attempts by dastardly Brussels bureaucrats to suck in ever more money for their hare-brained, money-wasting schemes. Needless to add, every penny that goes to Brussels can’t be spent on “schools n’hospitals”, “frontline services” and so on back home. Governments “win” at summits – no less than “spectacularly” in this case – although Mr Cameron’s announcement is hardly the news of a great victory on the plains of Waterloo that his rhetoric implies.

Second, Mr Cameron and his allies have demonstrated publicly that Member States really believe that the only “fair” Union budget is one where everybody gets out more or less what they pay in. Yet why should this be the case? Do we expect to get back from the State in services EXACTLY to the value of what we pay in taxes? No – at least not if one is reasonably sane and sober at the time that the question is asked. Following on this logic, one might ask: “why contribute to the budget at all?” Cameron’s claim is tedious pub-talk populism at best and reminds me of that boorish class of individual who “doesn’t mind paying tax” but it’s “what they spend it on” that he objects to. Insert here: housing benefits for “layabouts”, wars in Afghanistan, “waste”, NHS managers etc. etc. What do such people expect? A questionnaire from HM Treasury asking the respondent to tick which areas of State activity he is willing to support and by how much?

And the third point is that for all the talk about eurosceptic Tories and pro-Europe Liberals (or Labour supporters), British governments basically all act in the same way in Brussels. It’s not hard to imagine a stern faced Gordon Brown emerging from the smokeless negotiating chambers of the Council asserting that he has saved “£450 million pooounds” or similar which can now be “invested” in “hard-working families”. What about lazy families? Who will take care of them? Answers on a postcard please.

Housing benefit cuts: how the government is shaping the argument

It’s been an interesting time for those of us who follow welfare politics. On the one hand, we’ve seen the axing of child benefit payments for higher earners, and now further, hefty cuts to housing benefit, on top of those announced in June. On the other, the government is apparently to embrace a greater degree of universalism on pensions. In terms of Realpolitik, this isn’t much of a riddle – turnout at the last general election was highest amongst pensioners (76%), and lowest amongst the less well-off (social classes D and E had turnout of 57%) and those who rented accommodation (55%).

But there are, it seems to me, there are several interesting points to come out of this. In future pieces, I’ll write about the likely costs elsewhere to the public sector through these cuts, and the likely effect of housing policy changes upon our welfare settlement. For now, I want to focus upon how the government is trying to win the arguments for these cuts.

There’s a lively debate about when, and under what circumstances, cutting welfare payments may be popular, and what politicians can do to influence this. An assumption that permeates much academic writing on this subject is that cutting benefits is usually unpopular. There is the least resistance when there is a lower number of beneficiaries, and when they have less access to the political process (hence the relevance of lower turnout amongst poorer people).

To build public support for the measure, the government’s strategy has been pretty clear-cut: to paint a picture of housing benefit which will be deeply unattractive to the general public. This started prior to the announcement, with ubiquitous stories in the media about particular families who appeared to be getting very generous support with their rent, had no desire to become active in the labour market, and were photographed, slouching or beaming around a flat-screen television.

Latterly, in justifying the cuts, a similarly jaundiced picture has been painted. So Nick Clegg, at Prime Minister’s Questions, contrasted those who claimed Housing Benefit with those who
“go out to work, pay their taxes and play by the rules“. This is a pretty hopeless representation of housing benefit –“the rules” dictate that people are perfectly entitled to claim housing benefit if they are on a low income, and a good many people on HB do go out to work. As the homeless charity Shelter pointed out, just 12% of housing benefit recipients are unemployed. In many of the remaining cases (i.e. excluding pensioners, parents of very young children, and the disabled), it is just that their work is insufficient to allow them enough money to live on whilst paying their rent.

Similarly, both Nick Clegg and David Cameron focused on the £400 weekly cap on housing benefit payments. In fact, this particular measure will apply to under 22,000 households, whereas some 774,000 households, according to the government’s own impact assessment, are likely to see their benefits drop as a result of reduction in rates to the 30th percentile within a Broad Rental Market Area (the area for which benefit levels are calculated).

It is perhaps no surprise that there is initial, abstract support for the government’s plans, which 57% of voters say they support. Whether the efforts to discredit the benefit and those who receive it are as successful once the full impact becomes clear remains to be seen.