There is devilish detail in the new euro pact

Forget use of EU buildings, the threat is members of the new fiscal union cooking up deals that affe

The issue of David Cameron's "phantom" European veto has fallen out of the headlines pretty quickly, ousted from the agenda by the news of Fred Goodwin losing his Knighthood. (The announcement landed yesterday, by remarkable coincidence, within moments of the Prime Minister getting a bit duffed up in a Commons statement on Monday's European summit and after a weekend of bad headlines around banker bonuses.)

Conservative Eurosceptics, however, will not forget how the gesture of anti-Brussels defiance they so celebrated in December has turned, as they see it, into a supplicant bow to the forces of continental integration. It doesn't help that the Lib Dems are conspicuously pleased by Cameron's restoration of normal diplomatic service with regard to the EU.

As I wrote last week, upholding the spirit of the "veto" to the satisfaction of Tory back benchers and doing what it takes to secure British influence in European Union diplomacy were mutually exclusive demands. In fact, it seems, Cameron has done neither.

The sceptics have concentrated on the Prime Minister's failure to prevent signatories to the new Fiscal Union (FU) treaty using EU institutions to enforce their agreement. That was always a bizarre and unrealistic fixation. If Britain's position is to support other countries pursuing their plan, why would we sabotage the obvious mechanism for making it work. (There is an argument that says Britain should be opposing FU on the principle that any countries surrendering control of their budgets to a central European authority and insisting on choreographed austerity in the middle of a downturn is bonkers - but that is a different matter and definitely not government policy.)

The real issue for concern, as far as British influence is concerned, is not the use of institutions by the FU members, but the prospect that they will crowd the UK out in discussions of the single market. This is the problem that euro-wonks refer to as "caucusing" - the danger that plans will be hatched, positions agree, alliances cemented within the FU members that can then be presented at European Council meetings as faits accomplis.

This is not a threat for today or even tomorrow, but it is clearly a problem and potentially a very big one. If Britain struggles to build alliances in the Council it can get outvoted on things that matter deeply to our economy - on tax and regulation policy, for example. In the past, this hasn't happened too often, but the new FU structures, including regular summits (combined with some ill will generated by the whole "veto" episode) make caucusing much more likely.

Thus, as I have written before, the eurosceptic prophecy is self-fulfilling. Marginalisation diminishes influence leading to bad deals, suspicion of a conspiracy and more marginalisation. Onward towards the exit. Cameron told a press conference in Brussels that the government would "take action" if there was any sign of the FU members "encroaching on the single market". And that he would watch out for such encroachment "like a hawk". He didn't say what action would or could be taken.

The main safeguard in the draft fiscal union treaty appears to be in the preamble:

NOTING, in particular, the wish of the Contracting Parties to make more active use of enhanced cooperation, as provided for in Article 20 of the Treaty on European Union and in Articles 326 to 334 of the Treaty on the Functioning of the European Union, without undermining the internal market, as well as to make full recourse to measures specific to the Member States whose currency is the euro pursuant to Article 136 of the Treaty on the Functioning of the European Union, and to a procedure for the ex ante discussion and coordination among the Contracting Parties whose currency is the euro of all major economic policy reforms planned by them, with a view to benchmarking best practices.

Yes, I know that isn't even a sentence - such is the language of European treaties. Anyway, in something approximating English, this seems to be saying that the FU treaty is recognised as a special deal between some but not all existing EU member states - "enhanced cooperation" - for which a legal framework already exists in the much revised founding treaties of the EU.

The key passage on "enhanced cooperation" in the Treaty on the Functioning of the European Union says:

Such cooperation shall not undermine the internal market or economic, social and territorial cohesion. It shall not constitute a barrier to or discrimination in trade between Member States, nor shall it distort competition between them.

In other words, cooperation between FU members mustn't formally skew the single market against the non-FU members (Britain and the Czech Republic). In practice, however, some or all FU members could end up deciding on things that would subsequently be put to a full EU Council and comfortably outvote Britain.

To what extent this will happen and what Cameron could do about it are the real questions that should be asked about the changing nature of Britain's status within the EU after Monday.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

Paul McMillan
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"We're an easy target": how a Tory manifesto pledge will tear families apart

Under current rules, bringing your foreign spouse to the UK is a luxury reserved for those earning £18,600 a year or more. The Tories want to make it even more exclusive. 

Carolyn Matthew met her partner, George, in South Africa sixteen years ago. She settled down with him, had kids, and lived like a normal family until last year, when they made the fateful decision to move to her hometown in Scotland. Matthew, 55, had elderly parents, and after 30 years away from home she wanted to be close to them. 

But Carolyn nor George - despite consulting a South African immigration lawyer – did not anticipate one huge stumbling block. That is the rule, introduced in 2012, that a British citizen must earn £18,600 a year before a foreign spouse may join them in the UK. 

“It is very dispiriting,” Carolyn said to me on the telephone from Bo’ness, a small town on the Firth of Forth, near Falkirk. “In two weeks, George has got to go back to South Africa.” Carolyn, who worked in corporate complaints, has struggled to find the same kind of work in her hometown. Jobs at the biggest local employer tend to be minimum wage. George, on the other hand, is an engineer – yet cannot work because of his holiday visa. 

To its critics, the minimum income threshold seems nonsensical. It splits up families – including children from parents – and discriminates against those likely to earn lower wages, such as women, ethnic minorities and anyone living outside London and the South East. The Migration Observatory has calculated that roughly half Britain’s working population would not meet the requirement. 

Yet the Conservative party not only wishes to maintain the policy, but hike the threshold. The manifesto stated:  “We will increase the earnings thresholds for people wishing to sponsor migrants for family visas.” 

Initially, the threshold was justified as a means of preventing foreign spouses from relying on the state. But tellingly, the Tory manifesto pledge comes under the heading of “Controlling Immigration”. 

Carolyn points out that because George cannot work while he is visiting her, she must support the two of them for months at a time without turning to state aid. “I don’t claim benefits,” she told me. “That is the last thing I want to do.” If both of them could work “life would be easy”. She believes that if the minimum income threshold is raised any further "it is going to make it a nightmare for everyone".

Stuart McDonald, the SNP MP for Cumbernauld, Kilsyth and Kirkintilloch East, co-sponsored a Westminster Hall debate on the subject earlier this year. While the Tory manifesto pledge is vague, McDonald warns that one option is the highest income threshold suggested in 2012 - £25,700, or more than the median yearly wage in the East Midlands. 

He described the current scheme as “just about the most draconian family visa rules in the world”, and believes a hike could affect more than half of British citizens. 

"Theresa May is forcing people to choose between their families and their homes in the UK - a choice which most people will think utterly unfair and unacceptable,” he said.  

For those a pay rise away from the current threshold, a hike will be demoralising. For Paul McMillan, 25, it is a sign that it’s time to emigrate.

McMillan, a graduate, met his American girlfriend Megan while travelling in 2012 (the couple are pictured above). He could find a job that will allow him to meet the minimum income threshold – if he were not now studying for a medical degree.  Like Matthew, McMillan’s partner has no intention of claiming benefits – in fact, he expects her visa would specifically ban her from doing so. 

Fed up with the hostile attitude to immigrants, and confident of his options elsewhere, McMillan is already planning a career abroad. “I am going to take off in four years,” he told me. 

As for why the Tories want to raise the minimum income threshold, he thinks it’s obvious – to force down immigration numbers. “None of this is about the amount of money we need to earn,” he said. “We’re an easy target for the government.”

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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