Neva Sadikoglu-Novaky is the Secretary General of the European Conservatives and Reformists Group in the European Union’s Committee of the Regions, a visiting fellow at Localis Think-Tank, and a Conservative Party Parliamentary candidate.
As we leave the EU, all our attention seems to be focused on the terms of our departure. While that is understandable, we must also not lose sight of the bigger picture – that is, what to do with the powers coming back from Brussels? Firstly, our withdrawal from the EU presents us with the opportunity to fine-tune laws set at the EU level so that they better reflect our national interests. Secondly, it presents an opportunity to pursue genuine localism – and empower our local communities to decide on local issues.
Depending on the deal that is struck, we might find ourselves having to define our own public procurement rules, environmental policies, regional development, and agriculture policies. Needless to say, our legislators will be busy.
Let’s look at how and why a national fine-tuning of EU legislation would be needed. When formulated at the EU level, legislation is made on the basis of compromises among the elected members of the European Parliament and the heads of state and government of the 28 EU countries.
The decisions are made based also on how the technocratic Commission presents and frames the issue. It is a complex decision-making process with local and regional authorities through the European Committee of the Regions and economic and social partners through the European Economic and Social Affairs Committee also formally being consulted and invited to give their opinion.
The end result is to attempt a balance between different interests – and therefore, rarely ever optimal for any single country. It is usually a policy (sometimes with dubious English with terms like “handicapped regions”, being used to refer to regions facing geographic or demographic challenges) that reflects the lowest common denominator. Being able to decide on our own laws will therefore mean we will be able to reshape them to suit our own national context.
Let’s take the example of public procurement, that is to say the selling and buying of public services. EU rules that govern this roughly 1.7 trillion pound (2 trillion Euros) market, aim to catch contracts that are European in scale. If you want to buy or sell a service that is above a certain value, then you are obliged to advertise it across Europe by publishing it in the Official Journal of the European Union (OJEU).
If you think about purchasing power parities in different EU countries, you quickly realise that having a threshold that is going to respect the purchasing power of each country in the EU seems like mission impossible. What we consider as a fair price by UK standards may seem very expensive to others. Let’s take the example of how food is priced differently across the EU. In 2017, for example, the cost of food in Denmark was 32 per cent higher than the EU average, whereas the cost of food in Romania was 35 per cent lower than the EU average. Therefore, the threshold for contracts that have to be advertised on a European scale could seem very high for Romanians and possibly very low for Danes.
You also then have the added complication of the threshold for having to publish your public procurement contracts in the OJEU being set in Euros and fluctuating exchange rates also impacting the process. For example, in the past, even though the threshold for publishing in OJEU had increased, due to the strength of the sterling against the Euro, the equivalent sterling value had actually decreased. This meant that more UK contracts, but fewer European contracts, were subject to OJEU publication. This is just one example, but many similar examples exist in the policy areas governed by the EU.
Now, let’s look at how our withdrawal could be used to pursue greater localism. The UK remains one of the most centralised countries in Europe. We have devolved some powers but have done so in varying degrees to the different nations and different local authorities.
Among the four different nations, the Scottish Parliament has the highest level of powers devolved to it compared to the Northern Irish Assembly and the Welsh Assembly. There is no English Parliament, yet the local and regional picture is complex. Some parts of metropolitan England, like the West Midlands and Greater Manchester, enjoy more dynamic powers under their directly elected mayors to shape their locality and economy than those without devolution deals, especially rural areas. Even London, which has had its own Assembly for almost 20 years, fears it might be left in the wake of the combined authorities.
Yet, Westminster is still the body that decides on most local matters. For the limited powers that local government do have, they depend on national handouts from central government and individual negotiations. The U.K., along with Malta and Ireland, has one of the highest shares of central government involvement in public expenditure while Germany, France and Spain are the most decentralised. Even levels at which council tax is set are constrained by ministerial decisions at which to set triggers for local tax referendums, while in Germany, the regions (Länder) have exclusive rights to obtain revenues from sources such as wealth tax, motor vehicle tax, and inheritance and gift taxes.
In terms of decision-making power, our departure from the EU means that local government and devolved administration are also losing powers. In the EU, local and regional government including our UK devolved administration, formally give their opinion before the EU can legislate on most matters. They also regularly invite Commission, Council and European Parliament representatives to their meetings where they debate policy issues and hold the decision-makers and those proposing the legislation to account. While in countries like Austria, Belgium and Germany regional governments even have legislative powers, in the UK we regrettably treat them like mere stakeholders.
Some lessons can definitely be drawn from the different examples of localism in practice in the different countries in Europe. We may want to think about how we can devolve some decision-making and fiscal powers to our localities – so that they can keep a greater share of the locally-generated revenue, to pursue locally targeted projects, in line with local views and interests. Such an approach could also give room for experimenting with participatory budgeting being tried out in different parts of Europe where citizens are given a choice on the kind of projects they would like their tax money spent on.
The day after Brexit, whether you were in favour of leaving or staying in the EU, a new reality sets in. It is time we start preparing for that reality where we will need to adapt our laws and decide what to do with the powers coming back.