Brussels-London Balance of Powers
Principle of Economics
Read the following case and answer the questions below:
Case Study: Britain and the European Single Market
The balance of powers between Brussels and London is broadly correct in six key policy areas, a Whitehall review has found, undermining David Cameron’s attempts to renegotiate the UK’s relationship with the EU.
The first six analysis papers in the government’s review of EU powers suggest that the UK is not significantly harmed by what Brussels does, and Britain largely benefits from its relationship with the rest of the union.
The papers looked at the single market, tax, healthcare, foreign policy, aid and food safety. A senior government official said: “In none of these areas did the balance of evidence suggest the balance of competences was not broadly appropriate.”
The findings appear to contradict the prime minister’s view that the UK needs to renegotiate the way it interacts with the EU. Mr. Cameron promised in January: “I believe we can achieve a new settlement in which Britain can be comfortable and all our countries can thrive.” Brussels-London Balance of Powers
One Liberal Democrat minister said on Monday: “All this review has done so far is underlined rather than weakened the case for Britain’s membership of the European Union, which is not exactly the message that many Conservatives were hoping for.”
The analysis was ready to publish last week but was held back until after MP’s had left for recess in an apparent attempt to minimize the likely fallout of the review on the Tory benches. Some MP’s expressed anger at both the findings of the analysis and the way the government has handled it. Douglas Carswell, a Conservative MP said: “The Europhile Whitehall elite says EU membership is a good thing. This is hardly a shock.”
Mr. Cameron’s case was also undermined by the fact that just two of the 26 countries asked to submit evidence to the Whitehall analysis did so – Italy and Bulgaria. The prime minister had previously said he thought member states would be keen to cooperate with Britain on the issue.
The papers focus heavily on the benefits to British business provided by membership of the single market. The analysis gives Vodafone as a case study, which told the government its global growth “would never have happened if Britain has adopted one [technology] standard and the rest of Europe another”.
The analysis welcomed the EU’s role in coordinating food safety rules, channeling aid to developing countries and setting licensing rules for drug companies.
On one of the most politically sensitive current topics – the impact of immigrants on the National Health Service – the report said: “Evidence suggested that free movement of persons brings benefits for the UK health sector and for patients.”
Although it added: “A number of NHS stakeholders raised concerns about the large number of EU/EEA patients seeking treatment in the UK as this may place capacity and funding pressures on the NHS.”
However, it found several examples of specific regulations or practices that were harming or could potentially harm British interests.
One that was especially highlighted was the Working Time Directive, which health professionals complained meant junior doctors were not able to balance their workload.
It also found evidence that some member states were using backdoor routes to introduce tax measures without consent of every member state, for example through carbon emissions trading. Brussels-London Balance of Powers
But in general, the reports appear not to give the prime minister a strong evidential base from which to argue for a renegotiation of powers. One senior government aide admitted the papers had found the balance of powers to be appropriate, but added that future papers, such as that into free movement of people, were more likely to be more critical.
In total there are 50 marks available for this question. The marks for each question are given at the end. It is important to answer as fully as possible. Marks will also be awarded for clarity and for the use of correctly labelled diagrams were appropriate.
- Outline the benefits to Britain from the European Single Market. (8 marks)
- With reference to the circular flow of income, how would leaving the EU affect the British economy? (10 marks)
- Using appropriate diagrams, illustrate the impact that the free movement of people within the EU has upon the British labour market. (12 marks)
- The reports suggest that immigration brings both costs and benefits to National Health Service. What are these costs and benefits? (8 marks)
- Suppose that you are working as an economist advisor to the Government. Make an economic case for either Britain staying within the EU or Britain leaving the EU. (12 marks)