In July, the UK’s Foreign and Commonwealth Office launched a review of the balance of competences in the EU. It aims to review the EU’s powers and what they mean for the UK. J Clive Matthews argues however, that the EU is too complex to be divided up into simple costs and benefits, and that any such review is doomed to failure.

In July, supposedly in a bid to allow any future in-out referendum on UK membership of the EU to be based on facts rather than ideology, Foreign Secretary William Hague announced an “audit” of the influence of EU law on the UK. The promised audit has, of course, got a lot of anti-EU types rather excited, as they’re all convinced that any such study will show the EU to be the pernicious, all-pervading menace they’ve always claimed it to be.

Soon after the announcement, Conservative eurosceptic MEP Daniel Hannan wrote a post on his Telegraph blog that mixes up assertion with opinion and with unreferenced “facts” like the claim that: ”on the EU’s own figures, the costs of regulation outweigh the benefits of the single market by five to one (€600 billion versus €120 billion)”.

How justifiable are these claims? Thanks to the Conservative MEP defector to UKIP Roger Helmer for asking the question in the European Parliament and receiving a reply that points out that the €120 billion figure dates from 1992 (when the EU had 12 members), the €600 billion figure from 2006 (when it had 27), and therefore the two are not fair comparisons (even without mentioning inflation).

Thanks in turn to Open Europe for tracking down the details surrounding the €600 billion figure, which Hannan and others attribute to former Commissioner Günter Verheugen. The explanation can be found in an Open Europe study:

what … the Commissioner … actually said in the interview about reducing regulation, was that “I’ve said that in my view it must be possible to get a 25 percent reduction, and that means a productivity gain of €150bn.” The journalist took this to mean that €150bn represented 25% of the total cost of regulation. Verheugen’s office has subsequently confirmed that the €150bn figure referred to the extra benefits that would be generated (as opposed to saved) by a 25% cut in the administrative burden of EU and domestic regulations combined.

And so we see, once again, that Hannan’s numbers are far from accurate. If his own opinions about the EU’s malign influence are based on such misunderstandings, it’s understandable for him to be hostile. But it also means he’s wrong.

Misunderstandings, misinterpretations, and selective quotation

If it’s that hard to track down the source and true meaning of just *one* cost/benefit estimate, how much harder is it to track down the costs and benefits of the many thousands of pieces of legislation and regulations that have come out of the EU over the years? And, more to the point, if misunderstandings like the one above are so easy to arrive at, what are the chances of anyone actually understanding what the findings actually mean?

Of course, no one in their right mind could object to basing arguments on facts – and facts have long been in short supply when it comes to working out the EU’s influence and impact. Hague himself, after all, ran a general election campaign back in 2001 based largely on EU scaremongering, and his old euroscepticism can be revealed in his own assumptions of what such an exercise might achieve as he announced this audit: “less cost, less bureaucracy and less meddling in the issues that belong to nation states”

If an audit really could get proper facts on the EU’s influence, I’d be all for it. The trouble is, there have been plenty of similar studies conducted in recent years (most of which I’ve now rounded up in my previous “What percentage of laws come from the EU?” post). And the most rigorous and respectable of them have all concluded the same things:

1) It’s practically impossible to work out the impact of EU laws, per se, due to:

  • The wild variation in the way they can be implemented: directives vs. regulations etc;
  • The interconnectedness of policy areas;
  • The tendency towards gold-plating (UK officials and politicians adding additional clauses that weren’t required by Brussels onto EU-originated laws);
  • The cumulative impact of almost 40 years of EEC/EU membership;
  • The incredibly obtuse methods by which most laws enter the statute books in the UK, such as statutory instruments, which bypass parliament, and can be used for both UK and EU law;
  • The impossibility, in most cases, of tracking down the origin of the *idea* of a law, from the EU or member states like the UK;
  • Which EU-originated rules *replaced* existing British ones more or less 1:1?
  • Which would the UK have introduced anyway due to its own needs?
  • Which would the UK have to maintain if she were outside the EU in order to continue trading with it?

2) A cost-benefit analysis of EU membership may be nearly impossible:

  • We have no control group by which to measure the relative economic benefits/downsides;
  • The whole point of the EU is its interconnectedness, so to understand its true impact you need to analyse the entire EU economy, not just that of one member state;
  • The sheer volume of laws tells you nothing about their impact;
  • There remains a considerable degree of policy area overlap between EU and national law;
  • The impact of laws and regulations goes far further than simple cash cost/benefit.

But this is the problem with any EU audit or cost-benefit analysis: there are infinite ways to poke holes in any figures that are derived at, both from the anti and the pro-EU sides. Because the EU is simply too complex to divide up into costs and benefits. Not least because what may count as a benefit to some (e.g. freedom of movement and immigration) will be a bitter cost to others (not just xenophobes, but also UK citizens who may end up competing for jobs with those immigrants – or even just feel that they’re competing).

And then there’s the added issue that everyone suspects the current government’s motives for this audit, meaning that left, right, centre, pro-EU and anti-EU will all be looking to pick holes in it as soon as it appears. And if any of them don’t like the result, they’ll simply pick a number from a study they do like – which is why Dan Hannan keeps on using the utterly discredited claim that 84 per cent of laws come from the EU, while pro-EU types often reference an old study that came up with a figure of just 9.1%.

This smacks strongly of being yet another excuse to delay the resumption of hostilities between the Conservative party and its eurosceptic fringe that would kick off as soon as an EU-related referendum campaign is started. Because even former arch-eurosceptic William Hague has come to realise that although the EU is far from perfect, the UK’s other options are even less appealing – and in the process this former eurosceptic golden boy has started to come under attack as an EU stooge from some of the more excitable (and delusional) quarters of the anti-EU crowd.

And herein lies the glorious irony – it’s taken the EU’s worst crisis in its history, with the entire organisation standing on the brink of potential collapse, to convince some of the UK’s most vocal opponents of European integration of the EU’s benefits. Even long-time eurosceptic campaigners Open Europe are starting to come out to argue the benefits of membership.

But many hard-core eurosceptics will never be convinced. For them, costs and benefits are irrelevant. This is not about money or trade or economics – this is about ideology, sovereignty, independence. Better to be a poor free man than a rich slave and all that. No amount of audits or numbers will ever convince them that allowing a bunch of foreigners to have any say in the way we run our country can be right – even if we get a say in how they run their countries in exchange. It is the psychological cost of this perceived loss of freedom that is the most important for them, and even were the streets of Europe paved with gold it wouldn’t be enough to convince them otherwise.

As for the people as a whole? As per usual, the vast majority simply won’t care.

This article is a shortened version of the original post at Nosemonkey’s EUtopia.

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Note:  This article gives the views of the author, and not the position of EUROPP – European Politics and Policy, nor of the London School of Economics. 

Shortened URL for this post: http://bit.ly/EUReview

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About the author

J Clive-Matthews – Nosemonkey’s EUtopia
James Clive-Matthews has been blogging on European issues for more than nine years. He is a writer, editor and online content consultant currently working for Microsoft as Managing Editor of the MSN International Editorial Solutions team. He has been a researcher for a member of the Foreign Affairs Select Committee at the UK’s House of Commons, and has worked at the European Commission in Brussels. In 2010 he was awarded the European Parliament Prize for Journalism, and in 2010 he was named Winner in the Internet category of the European Parliament Prize for Journalism.

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