Wednesday, 13 August 2014

Attacks on "Welfare Tourism" are really political grandstanding

Worries over the free movement of people have grown into a huge political issue in the EU, with the idea that EU citizens are using their free movement rights to sponge off the welfare states of other Member States becoming more widespread. The panic is particularly pronounced in the UK, where David Cameron has announced changes that will "put the Britain first" by reducing the time EU citizens can claim benefits in the UK without realistic job prospects from six to three months. (So this will put the UK first on benefit claims for those without realistic job prospects?).

The rhetoric over the UK's supposed "magnetic pull" is now deeply ingrained, and hasn't exactly been informed by sober comparisons of the relative generosity of the British welfare system versus other Member States (there's no league table of European magnetism). Strangely, there was an article in the right-leaning Telegraph about how thousands of Britons were claiming unemployment benefits in Germany. And when we look at what the change in the law will mean for benefit claims, the BBC reckons that the change will only affect roughly 10,000 people.

This is a small number - which amounts to around 1% of all jobseekers benefit claimants - but apparently a big enough policy for the Prime Minister to announce it. Indeed, the numbers of EU citizens claiming benefits while not working are tiny across the EU. But the pressure to be seen to be tough on immigration and on the free movement of people is building in many countries, leading to many of the centre-right (and centre-left) parties to adopt tough language on immigration and welfare to win back support from voters who have voted for populist parties. The danger is that this political grandstanding legitimises the politics of populist parties while not winning back support as the measures introduced by the mainstream parties have no obvious effect. The small numbers affected by welfare changes will be read in this political climate as showing the weakness of the mainstream parties, rather than demonstrating that, in reality, the numbers that move just to benefit from the welfare system (rather than actually looking for work), are just that small.

Clearly it's easier to bang the welfare tourism drum and toughen welfare laws than to stand up for the free movement of people - ministers prefer to be able to say "ah, but we have been tackling the problem" rather than be called out of touch for standing up for the free movement of people or arguing for policies to actually improve public services. But it feeds the anti-immigration climate and paints mainstream parties into a corner. When people discover (or "feel") that the policies aren't having any effect, they will lose faith in the ability of the mainstream parties and shift their support to the populists.

Focusing on creating jobs and making the economy work for all is a much harder task but it should be the business of the mainstream parties. It's when they give in to the allure of easy political grandstanding that they fritter away their credibility on a game with the populists that they cannot win.

Tuesday, 12 August 2014

EU-Canada FTA and Investor-State Dispute Settlement

The EU-Canada Trade Agreement has been finalised after German concerns over possible investor-state dispute settlement provisions were satisfied. The treaty still has to be passed by the EU and the Member States, so it's not a done deal yet (apparently the ratification process could continue to 2016), but the treaty is already being described as a model for the EU-US trade deal (or "TTIP").

Investor-State dispute settlement is a mechanism that allows foreign investors to sue host governments in special arbitration tribunals. Such provisions have been included in trade agreements in the past and have come under fire for allowing foreign businesses to litigate against environmental and public health regulations created by host governments - a way for private business to subvert democratically framed laws. This has been the most controversial issue when it comes to the TTIP, raising concerns that European standards will be eroded.

Reportedly Germany protested against the use of investor-state dispute settlement being a part of the Canadian treaty, and even threatened to veto the deal, but Canadian officials state that the disagreement was actually sorted out a while ago, without needing to re-negotiate the treaty. So it's unclear how far the treaty was actually changed, or whether there will still be ISDS provisions in the treaty. The fact that the treaty won't be public before September means that it's hard to welcome this as a victory for standing up against ISDS. (If the ISDS provisions have been removed, then it will show up Trade Commissioner de Gucht's rhetoric over how necessary they are for investor confidence to be waffle).

The treaty probably will be a model for the negotiations to come for the TTIP, not only due to similar issues that need to be thrashed out, but also because this will be a test case for public and parliamentary opinion in Europe. How will the European and national parliaments react - and will the public raise any concerns? The fact that this could be one of the early tests for the European Parliament could make it even more interesting.

Monday, 11 August 2014

Independence or Devolution?

Last week saw the first TV debate between Scottish First Minister Alex Salmond and Alistair Darling the leader of the pro-Union "Better Together" campaign in the run up to the referendum on Scottish independence. Salmond is known across the UK for being a shrewd politician and a great debater, whereas Darling, a former Chancellor, is seen as competent and dependable, but dull. So much was made of Darling's victory in the debate (according to the snap polls immediately afterwards), particularly with the Yes (pro-independence) side behind in the polls.

Darling won the debate largely because the independence campaign has stuck to a highly optimistic view of the transition to independence, so in a debate it comes across as if the Yes side aren't taking the concerns of the No side seriously (hardly a way to woo swing voters with similar concerns). And there are issues with the transition to independence: EU membership won't be automatic (though it hardly be a complicated process for a country that already complies with EU law), and creating a suitable currency union between Scotland and the rest of the UK will doubtless be a complicated task.

But the real question is whether Scotland is not only different to the rest of the UK (read: England), but different enough that full independence is necessary to properly express that difference. From education to healthcare, there's no denying that Scotland is more social democratic than the rest of the UK (though it may just be more in line with the rest of Europe than England), and the political gulf between Edinburgh and London can be seen in the lack of Tories North of the border. But does devolution (with more powers to be shifted from London to Edinburgh in the event of a No vote) not enable Scotland to give voice to those politics while also retaining the benefits of union? The fact that the independence plan would keep so much of the union, from the monarch to the currency, suggests that the "best of both worlds" argument might have some attraction yet.

Looking at how the debate has played in Westminster and how the main UK parties have dealt with it, I can see it only being a matter of time before Scotland leaves. More devolution to Scotland is great, but the asymmetric nature of the union is a big problem for its future survival. Without any debate about what the union should be about and how it should work together apart from occasional devolution to the constituent nations, the union ends up on the wrong side of history. The momentum will stay with Scotland's drift towards independence, and the central institutions of the UK will not be reformed to reflect how the UK is developing. The UK needs to stop acting like a unitary state - really, the UK should take a federal approach to empower English regions as well as Scotland, Wales and Northern Ireland, re-balancing the UK away from London and the South-East and making devolution and union part of the same political narrative.

That's not going to happen. England famously doesn't like to debate constitutional reform, trusting in a flexible, "unwritten" constitution (which underestimates the danger of bumbling through decisions and undervalues the virtue of democratically facing up to such decisions rather than leaving them to a cosy elite to sort out amongst themselves). A political atmosphere where the union is increasingly an English space that the Celtic fringe gets exemptions from is not a union of equals and this leaves very little in the way of common institutions or political narrative to justify sticking together.

Scotland's social democratic vision is a very attractive one - it's one that it can achieve as an independent country, and probably also as part of the UK. Independence will give Scotland something more indefinable than what Salmond promises: the freedom to reflect on, debate and shape itself. The real weakness of the UK may not be that it isn't giving Scotland the tools that it needs to forge its own path while staying inside the union, it's that it struggles to be about more than the London-centric Westminster bubble.