How the Election may have transformed the prospects for "reform" of the EU

David Cameron has not yet fleshed out his “red lines” for the EU reforms he is seeking before putting UK membership to an in-out referendum. It is therefore unclear which of the reforms being called for actually will need Treaty Changes. For example: does cutting access to UK tax credits for immigrant workers to below those on offer in Germany really require a Treaty change? Or does it “merely” require changes to the UK tax credit system which are likely anyway as this  is “incrementally folded” into the Universal Credit: once the pilots with “real” human beings have been shown to work and to be usable by ministers.

Similarly, is a Treaty change needed to require new benefits claimants (including for access to the NHS, Education or Social Housing) to use Government “Verify” (i.e. have a UK digital footprint going back X years) or to have a current electronic identity from another member state (e-IDAS regulation)? Or will we “merely” copy existing practice in Germany, Holland or Denmark (who effectively block those without a job and tax-paying footprint as a local resident from access to almost anything). I suspect that we will soon see pan-European agreement that claimants will, in any case, be entitled only to the “lower” of their “home” or “resident” state benefits – without any need for treaty change..

Enforcing such changes will, however, require making a reality of pan-EU data and identity exchange in the public sector. The implementation of the eIDAS “regulation” has become bogged down with issues that were predicted by those with experience of a century (or so) of electronic identity and access management (the first test case for an electronic signature was 1867 for a cable authentication) and the millennium (or so) with identity arbitrage (which has underpinned correspondence banking since before the time of the Knights Templars and their ID codes and passwords). Hence the problems that both the pan-EU eIDAS team and the UK Cabinet Office ‘Verify’ team are having engaging interest from the banking and finance private sector (other than to sell their own services to the public sector). [I commend the EEMA/e-IDAS briefing in London on June 5th to those in financial services who are looking at the business case for getting involved).

We should also note the rising pressure to tax and regulate on-line transactions in the country of delivery and, at the same time, end attempts to block cross-border purchases of digital content (e.g. subscriptions to TV channels) in ways that have been illegal in the off-line market for decades

The tide for pan-EU co-operation to enforce taxation in the country of destination (as opposed to the Irish Republic Luxembourg, Malta or an external tax haven) is well under way . Once again there appears to be no need for Treaty Change, albeit the former Luxembourg Prime Minister who helped create some of the most egregious of the loopholes may claim differently. The pressure for equality of tax treatment between the on-line and offline worlds (see section 2.5 of the Digital Single Market Strategy  will be followed by pressure to apply the same rules with regard to cross border pricing and product availability (sections 2.3 and 2.4).

It is over twenty years since attempts to stop us traveling to another country to buy the same model of car at a lower price were outlawed, yet today we have discriminatory on-line pricing and access according to our supposed location when ordering on-line. The digital rights management techniques, including to track the location of the device used to make the transaction or receive the content, serve to undermine “the innocent carrier” defence in general, including when it comes to data protection; where we have a slew of laws which may allow organisations to tick boxes but do little, if anything, to protect individuals. One can sympathise with Facebook, faced by a dozen or so regulators now seeking to outdo each other , but the answer is not complicated. Now that the industry has shown, by its copyright policing and advertising tracking services, that it can (within “reasonable” margin of error)  usually identify where the content is being accessed: it is either country of destination or a pan-EU regulator. And if that gets in the way of current business models and fancy share prices … [DISCUSS … as the examination question says]       

An open and honest debate about “Making a reality of the Digital Single Market” exposes nearly as many hidden conflicts of interest as does any debate on “Net Neutrality”. If the UK were to draw a red-line in favour of regulation in the country of destination but with a genuine open market in terms of content access and pricing, we would find most Commissioners and MEPs on the same side as ourselves. Meanwhile we should also note what is happening in the US as it finally begins to address its problems with IPR trolls and also look at the Commission plans for copyright reform
I will blog separately regarding the Commission plans for Digital Skills, Illegal Content, a partnership approach to Cybersecurity and a review of the Audio Visual Media Services Directive and “the free-flow of data” – but the timetable for the “Roadmap for completing the digital single market” has all these completed before the expected date of the UK In-Out referendum.   

Hence the importance of the work that Malcolm Harbour, former chairman of the Internal Market Committee is organising within the Digital Policy Alliance. The DPA co-operation with the European Internet Foundation, on its planned study tour for look at what is happening in the UK regarding Fintech, Digital Skills and the removal of regulatory barriers, may prove to be a critical point of leverage – particularly if the preparations for the briefing are used to also “educate” UK and Commission officials on the current and emerging issues that must be addressed for the EU, not “just” the UK to remain globally competitive.

Those who wish to see the UK remain within a reformed EU have to work together to help bring about that reform – not simply carp or bleat from the sidelines.    

Finally we should remember that “freedom of movement” within the EU is freedom to take up a job offer, not to live off a more favourable benefits regime while looking for work. The growing groundswell against immigration implies that the UK public sector will soon give priority to taking on trainees from the local unemployed or to reskilling existing employees rather than advertising for skilled staff in other member states. Once again there is no need for treaty change, only a need to use the Social Values Act (which embeds up-to-date EU thinking on “intelligent procurement” to ensure that this is actively taken into account when drawing up and adjudicating invitations to tender. The industry response to such pressures will separate those who wish to maintain global career paths from those who merely wish to import cheaper contractors. The changed climate for IT skills after the election, with a  need to take apprenticeship programmes (for all ages) much more seriously also merits a separate blog. I would prefer the slogan “Train British workers for Global Jobs” or “Educating and Training the workers of the world” to that of “Train English Workers for English Jobs”  but I fear that unless we are serious about the former, we will get the latter