The potential risks associated with remaining in the EU due to its future trajectory have been a subject of debate during the Brexit referendum. Some argue that the UK might be forced into accepting an EU army, further integration of the single currency, or other undesirable developments. However, the crucial point is whether the UK possesses the power to govern such advancements, either through veto or opting out.
This analysis will address the key concerns related to continued EU membership, demonstrating how the UK maintains control through opt-outs or veto power in each scenario. Essentially, none of these changes can be implemented without the UK government’s approval, and almost all necessitate the UK Parliament’s consent as well. Furthermore, any substantial modifications to the EU that raise concerns would require the British public’s endorsement through a referendum. It is worth noting that the UK retains the right to initiate another referendum on EU membership whenever it chooses.
These safeguards, ensuring the UK’s authority over future EU developments, are embedded within the existing EU legal framework and are not contingent on the renegotiated terms of membership agreed upon in February.
This analysis will delve into seven specific areas where the UK exercises control over prospective EU advancements:
a) Defense;
b) Transfers of power;
c) New Member States, including Turkey;
d) Taxation;
e) Non-EU immigration, asylum, and criminal law;
f) The single currency; and
g) The EU budget, including the UK rebate.
For information regarding the controversial EU/US trade deal (TTIP) and its implications for the NHS, please refer to a previous blog post.
a) EU Defense and Foreign Policy
The UK exercises control over EU defense and foreign policy decisions as they generally require unanimous agreement, with limited exceptions. Article 31 TEU outlines that decisions in this domain are made by the European Council and the Council acting unanimously, unless otherwise specified.
Exceptions arise in instances involving prior actions or requests from EU Presidents and Prime Ministers (acting by consensus), implementation of previously agreed-upon unanimous decisions, or appointment of a ‘special representative’. However, a safety mechanism exists in the form of an ‘emergency brake’: any Member State can oppose a decision to be made by qualified majority by citing “vital and stated reasons of national policy,” thus preventing a vote.
Significantly, majority voting is not applicable to decisions with “military or defense implications.” Although majority voting is permitted for funding matters, exceptions are made for military and defense concerns, and for any Member State that abstained from voting on a proposal. Ultimately, the UK retains control over its contributions to EU foreign policy funding.
Therefore, regardless of one’s stance on EU foreign policy concerning matters like Ukraine or Russia, such policies are not imposed on the UK government. The UK possesses the power to veto any such policy, and in the absence of unanimous agreement among EU Member States, no EU foreign policy is enacted. Consequently, individual states act independently, as exemplified by the Iraq War.
Regarding the UK’s permanent seat on the United Nations Security Council, Article 34(2) TEU explicitly refers to Member States’ seats, not an EU seat. The UK can veto any EU decision requiring it to relinquish its Security Council seat, exercising its veto power over foreign policy matters. While the European Parliament might aspire for such a scenario, it holds no influence over EU foreign policy, as per Article 36 TEU, which limits its role to consultation.
Moreover, any alteration to the UK’s Security Council veto necessitates amending the UN Charter, a process over which the UK has veto power, according to Article 108 of the Charter.
Concerning the possibility of an EU army, Article 42(2) TEU clarifies that while the “progressive framing of a common Union defense policy” is part of the common security and defense policy, a “common defense” can only be established through a unanimous decision by the European Council. Subsequently, Member States would need to adopt this decision “in accordance with their respective constitutional requirements.”
Therefore, the UK retains control over any potential “common defense” through its veto power. Additionally, the “constitutional requirements” in the UK involve not only parliamentary approval but also a referendum, as stipulated by the European Union Act 2011. This law establishes a “referendum lock” on any further transfer of power to the EU, granting the British public control over such matters. It also mandates a referendum before relinquishing any British veto concerning foreign policy or defense.
b) Treaty Amendments and Transfers of Power
The possibility of future power transfers from Member States to the EU, whether in the context of the single currency or other initiatives like the ‘Five Presidents Report’, has raised concerns about the emergence of a ‘superstate’ or the realization of the EU’s ‘ever closer union’ clause. However, the UK maintains control over such developments.
Firstly, the UK possesses an opt-out from the single currency. Secondly, it holds veto power over future Treaty amendments. Article 48 TEU outlines several methods for amending the EU Treaties, all of which share two crucial aspects: (a) the UK government’s veto power, exemplified by its use in 2011; and (b) the requirement of approval from the British Parliament, either through a vote in favor or a decision not to oppose.
Furthermore, the European Union Act 2011 grants the British public control over significant Treaty amendments through referendums. This applies to scenarios involving the UK relinquishing any veto power and to other power transfers to the EU, including:
a) ‘the extension of the objectives of the EU’;
b) any ‘conferring’ or ‘extension’ of EU competences, encompassing ‘the co-ordination of economic and employment policies’ (as addressed in the Five Presidents’ Report); or
c) granting any EU ‘institution or body’ the authority to issue orders or impose sanctions on the UK.
The assertion that the UK surrendered its veto power concerning single currency and banking matters during the renegotiation deal is inaccurate. The deal did not modify the Treaties, nor has Parliament amended the 2011 Act.
Consequently, control over any power transfer from the UK to the EU rests with the UK government, the UK Parliament, and ultimately, the British public.
c) New Member States
Article 49 TEU outlines the accession process for new EU Member States. Any European state adhering to the values enshrined in Article 2 and committed to promoting them can apply for membership. This application is then reviewed by the European Parliament, national Parliaments, and the Council, which decides unanimously after consulting the Commission and obtaining the European Parliament’s assent. The terms of admission and necessary Treaty adjustments are negotiated and ratified by all Member States, including the applicant state, in line with their “respective constitutional requirements.”
Therefore, the UK possesses veto power over any new country joining the EU. In the UK, fulfilling the “constitutional requirements” entails enacting an Act of Parliament.
While concerns have been raised regarding future EU enlargement, the accession process mandates that each prospective member state engage in comprehensive negotiations covering 35 chapters of EU law. Despite 11 years of negotiations, Turkey has only reached an agreement on one out of 35 chapters and has not even initiated discussions on many others.
Furthermore, the “conditions of eligibility” encompass human rights standards, an area where Turkey currently falls short. Cyprus would veto Turkish membership unless a resolution regarding the island’s future is achieved. Similarly, other applicant countries have made limited progress in negotiations.
Importantly, current Member States can impose extended waiting periods before granting full freedom of movement of persons to new members. Out of the 22 states that joined the EEC/EU after its establishment, 14 experienced seven-year waiting periods before enjoying full freedom of movement of people. Longer periods could be implemented in the future.
Any removal of the UK’s veto power over enlargement necessitates a Treaty amendment, subject to the approval of the government, Parliament, and the British public through a referendum, as stipulated by the European Union Act 2011.
d) Taxation
VAT and excise taxes are the primary taxes harmonized at the EU level. EU law establishes a minimum rate of 15% for VAT, with certain exemptions, and defines its scope. The UK benefits from VAT exemptions on items such as books, essential foodstuffs, and children’s clothing.
While VAT is often portrayed as an EU imposition, the UK has, in reality, consented to all VAT laws, given that decision-making in this area requires unanimity. Article 113 of the Treaty on the Functioning of the European Union states that the Council, acting unanimously and after consulting the European Parliament and the Economic and Social Committee, establishes provisions for harmonizing legislation concerning turnover taxes, excise duties, and other indirect taxation.
Therefore, the UK exercises control in this domain, having agreed to every VAT and excise tax obligation set forth by EU law. The UK independently determines tax rates for VAT and excise taxes (on items like alcohol, tobacco, and petroleum) above the minimum threshold. While advocating for additional VAT exemptions on products such as tampons or environmental services is possible, it was the UK government that committed to maintaining these rates. Furthermore, the UK government recently consented to extend the 15% minimum rate. Nonetheless, the EU has recently adopted a more flexible approach, allowing for the removal of VAT on tampons and potentially other products and services.
The existence of the veto power ensures that the UK can control any future amendments to EU tax law in these areas, including the elimination of exemptions.
Regarding other taxes, EU involvement in tax law remains limited. For instance, the UK has complete autonomy in setting rates for personal income tax, National Insurance contributions, corporate taxation, council tax, and others. However, limited EU involvement exists in cross-border aspects of corporate tax, such as the recent law aimed at addressing cross-border tax evasion.
These laws are adopted based on Article 115 TFEU, which emphasizes unanimity in decision-making. Consequently, the UK retains its veto power. Article 114(2) TFEU further reinforces this by excluding “fiscal provisions” from the majority voting principle usually applicable to EU single market law.
Therefore, the UK can veto any proposed EU taxes, such as those intended to fund refugee and migration costs, pensions, or other areas.
The European Union Act 2011 ensures that removing these vetoes (partially or entirely) requires amending the Treaty with the consent of the UK government, Parliament, and the British public through a referendum.
e) Asylum, Non-EU Migration, and Criminal Law
Protocol 21 to the Treaties grants the UK an opt-out from EU laws pertaining to non-EU migration, criminal law, and policing.
Concerning immigration and asylum, the UK opted out of most non-EU immigration laws while opting into the initial phase of asylum laws from 2003 to 2005. The UK leveraged its then-existing veto power to ensure these laws did not necessitate changes to UK asylum law. Since 2005, the UK has opted into only the Dublin III Regulation (concerning the return of asylum-seekers to their first point of entry in the EU) and the Eurodac Regulation (regarding fingerprinting asylum-seekers for this purpose). The UK opted out of recent EU laws on relocating asylum-seekers from Italy and Greece to other Member States.
Additionally, the UK maintains an opt-out from the Schengen system of open borders and harmonized external border controls among Member States, as outlined in Protocols 19 and 20. This encompasses an opt-out from EU laws on short-term visas for stays of up to three months. Consequently, the UK will not be subject to the proposed laws waiving short-term visa requirements for Turkish citizens or those from other countries like Ukraine, Georgia, and Kosovo.
For the same reasons, the UK is not bound by the proposed law concerning the European Border Guard. While this law initially allowed the border force to enter a Member State without its consent, this provision was removed during negotiations. Regardless, this would not have applied to the UK. Moreover, the EU court ruled that the UK could not opt into the EU law establishing a border agency (the precursor to the proposed Border Guard law) without joining the Schengen system entirely.
In criminal law and policing, the UK held veto power until the Treaty of Lisbon came into effect in 2009. Since then, it has exercised its opt-out frequently, particularly concerning the proposal for a European Public Prosecutor. It is crucial to note that the EU’s police agency, Europol, is not a ‘federal police force’ as the Treaty prohibits it from possessing “coercive powers” such as arrest, interrogation, or detention. Europol primarily focuses on analyzing police investigation data.
Eliminating the opt-outs on immigration and asylum, Schengen, and criminal law would require amending the Treaty with the approval of the government and Parliament. Abolishing the Schengen opt-out and participating in the European Public Prosecutor would also necessitate a national referendum, as per the European Union Act 2011.
f) The Single Currency
Protocol 15 to the Treaties establishes the UK’s opt-out from the single currency. It explicitly states that unless the UK informs the Council of its intention to adopt the euro, it is under no obligation to do so.
Contrary to certain claims, this protocol does not have an expiry date, and the assertion that all Member States are obligated to join the euro by 2020 is false. The opt-out remains valid indefinitely.
The protocol further clarifies that the various EU law provisions related to the single currency do not apply to the UK. As a result, the UK cannot be subjected to austerity measures imposed by the ‘Troika’ overseeing bailouts to Eurozone countries, as these measures only apply to states using the single currency. Austerity measures in the UK are solely at the discretion of the UK government.
Furthermore, the UK is exempt from certain EU banking laws, most notably the requirement to participate in permanent bailouts of Eurozone states. These bailouts involve only Eurozone states and operate based on a separate treaty. The EU court has affirmed that the EU lacks the authority to enact laws regarding permanent bailouts.
While the UK could potentially participate in temporary bailouts, the law has been amended to guarantee that the UK would be reimbursed in the event of a default.
g) The EU Budget and the UK Rebate
Two key aspects characterize the money the UK contributes to the EU: a) a rebate, meaning a portion of the contribution is never sent; and b) EU spending directed back into the UK. For a detailed overview, refer to this resource.
Contrary to some claims, the rebate is legally sound, and the UK does exercise control over EU spending. The EU’s Own Resources Decision outlines the rebate and does not have an expiry date, unlike rebates for other Member States, which will end in 2020. Article 311 TFEU dictates the process for amending this law:
The Council, through a special legislative procedure and acting unanimously after consulting the European Parliament, adopts a decision establishing the provisions for the Union’s own resources system. This may involve creating new categories of own resources or abolishing existing ones. This decision only takes effect after approval from the Member States “in accordance with their respective constitutional requirements.”
Thus, the UK government, through its veto power, and Parliament, as the “constitutional requirements” necessitate an Act of Parliament for any amendment to the Own Resources Decision, can control the future of the rebate. These safeguards have ensured the preservation of the veto for over 30 years, even though the UK government and Parliament have agreed to reduce it over time.
The rebate is not “conditional,” as sometimes suggested; the UK retains complete control over these funds and can use them at its discretion.
Regarding EU spending within the UK, the law on the ‘Multi-Annual Financial Framework’ outlines the fundamental rules. The UK exerts control over this law through its veto power, as stated in Article 312(2) TFEU:
The Council, acting unanimously through a special legislative procedure and after obtaining consent from the European Parliament (by a majority of its component members), shall adopt a regulation establishing the multiannual financial framework.
It’s essential to consider the EU budget contribution in a broader context. It constitutes less than 1% of UK spending. If the UK ceased its contribution, it would be akin to a marginal increase in pay. The average taxpayer contributes 12 pence per day to the EU.
Conclusion
The analysis has demonstrated that:
a) The UK cannot be compelled to participate in an EU army without the consent of the government, Parliament, and the public;
b) Treaty amendments require the approval of the UK government, Parliament, and (in case of power transfers) the public;
c) The accession of new Member States requires the consent of the UK government and Parliament. Turkey’s accession remains distant and, if it were to occur, would involve extended transitional periods for the admission of workers;
d) The UK possesses veto power on tax matters, and relinquishing it would require the consent of the government, Parliament, and the public;
e) The UK has an opt-out from EU law concerning asylum, non-EU migration, and criminal law. Removing this opt-out would require the consent of the government and Parliament, while joining Schengen or the European Public Prosecutor would necessitate public approval through a referendum;
f) The UK maintains an opt-out from the single currency and related matters, and joining would require the consent of the government, Parliament, and the public;
g) The UK holds veto power over the fundamental EU budget revenue and spending regulations, including the UK budget rebate. Removing this veto would require the approval of the government, Parliament, and the public.
While valid criticisms of the European Union exist, the assertion that the UK government could be coerced into any of the measures discussed above is demonstrably false and constitutes fear-mongering. The UK government, often in conjunction with Parliament and the public, exercises control over all potential developments.