Reflecting on the Balance of Competences

I recently launched the third round of consultations in the Balance of Competences Review, the most extensive analysis of our relationship with the EU ever undertaken. The first six reports were published in July this year, with the next nine due this winter.  Marking the launch, I spoke to businesses and civil society organisations about the contribution the reports are making to the wider debate on European reform.

For me, one of the merits of an exercise as comprehensive as the Balance of Competences Review is that it allows you to take a step back and look at the bigger picture. The review brings together a broad spectrum of views. Certainly not all the contributions were in agreement, particularly in areas where there is a contested view of the UK’s national interest. But I am struck by some of the common themes emerging.

One significant theme is the need to assess when and whether EU action is appropriate and necessary. Certainly there are areas where collective action works in our national interest; from stopping the spread of animal diseases to co-ordinating overseas aid. But in other areas, there was strong agreement that Member States need to retain sufficient control to make decisions in our own national interests.

No one wants to see British military personnel deployed unless the UK Government so decides and it is right that the UK can veto potentially damaging proposals on direct taxation – as we did recently on the proposal for a Europe wide Financial Transactions Tax. Many contributors were clear that in these areas the EU’s role should remain limited to supporting Member States.

Respondents were more positive about EU action which clearly strengthened the single market. There is clear evidence of the UK’s influential liberalising role in the single market and the positive impact this has had on our economy. At the same time, contributors felt that the full potential of the Single Market has yet to be realised. For example, the completion of the digital single market to reduce barriers to cross border online trade could present UK businesses with significant opportunities.

The reports are also clear about where EU action could be improved. The evidence suggests there is still unnecessary regulation on businesses, often felt most acutely by smaller enterprises, and inadequate transparency and consultation in decision making. These findings support those of the Prime Minister’s Business Taskforce which made specific suggestions for removing constraints to growth and innovation.

There were also calls for more even implementation and enforcement, and a sharper focus on reviewing the effectiveness and necessity of existing EU legislation. We are already taking action in line with these themes – indeed, better regulation and the completion of the digital single market were the focus of discussion for Leaders at the October European Council.

The Coalition Government is committed to working with our European partners to achieve a more competitive, flexible and democratically accountable EU. The Balance of Competences Review is an invaluable part of this process. The first six reports provided really useful insight and analysis on the impact of EU action on the UK. I hope you will take the opportunity the third consultation presents to contribute and make sure your views are heard.