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Leaving the EU... A paper from the House of Commons

!Leaving the EU... A paper from the House of Common


The current tract is based on the research paper dated 1 July 2013(external link) from the House of Commons. Different important excerpts of the paper that are deemed applicable to the British Staff are simply presented below:

The President of the European Council, Herman van Rompuy, spoke of the complexities of leaving the EU in a speech on 28 February 2013:

... leaving the club altogether, as a few advocate, is legally possible – we have an 'exit clause' – but it's not a matter of just walking out. It would be legally and politically a most complicated and unpractical affair. Just think of a divorce after forty years of marriage… Leaving is an act of free will, and perfectly legitimate, but it doesn’t come for free.

The European Commission has emphasised the importance of the UK’s role in the EU. Its President, José Manuel Barroso, replied to an EP question on 20 February 2013:

It is for the British Government and the British people to set out what they feel is the best approach to the UK's place within the European Union. Through its membership the UK has positively contributed to the realisation of European policies from the deepening of the single market, to enlargement, to climate and energy policy, to keeping Europe open to the world and developing new trade opportunities. The Commission considers that, provided that the UK so wishes, it is in the European interest and in the UK's own interest for Britain to continue to be an active member of the EU.

If UK were to leave the EU then:
...the relative importance of VAT to the Exchequer – accounting for around 17% of all government receipts – suggests that future governments would be unlikely to substantially increase these reliefs or abolish the tax, even if leaving the EU gave them this power...

Consequences on employment are:
...An EU exit could well foreshadow significant change to UK employment law, much of which flows from Europe. A post-withdrawal government would face conflicting pressures. On the one hand, it would face pressure from employers’ associations to repeal or amend some of the more controversial EU-derived employment laws, such as the Working Time Regulations 1998 and Agency Worker Regulations 2010.120 On the other, trade unions would probably strongly oppose any perceived rowing back on rights originating from the Social Chapter...


Scottish opinion about leaving the EU:
...According to an Ipsos MORI poll published on 14 February 2013, over half of the Scottish electorate (58%) think there should be a referendum on UK membership of the EU, compared with just over a third who disagree (36%). Just over half of Scots (53%) said they would vote to stay in the EU, compared with a third who said they would vote to leave (34%)...

On 18 September 2014 a referendum will be held in Scotland on the question of independence from the UK.

Angus Roxburgh, in an article published in the Guardian, 19 May 2013, wrote:
To put it crudely, the simple way for Scotland to avoid the risk of being cast out of the EU would be to vote for independence from the UK before the English get the chance to vote on Europe….
Scotland will hold its own referendum, in September 2014, to decide whether to stay in the UK. Not surprisingly, the SNP is already arguing that leaving the UK might be the only way for Scotland to guarantee it remains in the EU.

On Pension schemes the EU regulatory framework currently covers four main points:
1. Cross border coordination of social security pensions to facilitate the free movement of workers and equal treatment for workers who change country.
2. Establishing an internal market for funded occupational schemes and the necessary minimum standards on prudential rules to protect scheme members and beneficiaries.
3. Minimum guarantees concerning occupational pensions and accrued rights in case of the insolvency of enterprises as sponsors.
4. Anti-discrimination rules apply, although with some differentiation, to both statutory and private pension schemes


Being outside the EU would have implications for UK citizens who were members of pension schemes that operate on a cross-border basis. In 2012 there were 84 EU cross-border schemes, many of them operating between the UK and Republic of Ireland. Under the IORP Directive, such schemes are subject to more stringent funding requirements. It is probably in the interests of the UK that, where its citizens are receiving a pension from another State, that State’s scheme is fully funded. Outside the EU, there would be no mechanism in place to ensure this, so it would have to be done through negotiation.

The Insolvency Directive (Directive 2008/94/EC, 22 October 2008) provides for the protection of employees’ rights in the event of the insolvency of their employer, including requiring Member States to adopt measures to protect the interests of pension scheme members. In 2007 the European Court of Justice held that the Directive left Member States considerable latitude as regards the level of protection and ruled out any obligation to provide a full guarantee. However, a system that could lead to a guarantee of less than half the scheme member’s entitlement could not be deemed to fall within the definition of “protect” as applied in the Directive. This was one factor prompting the UK Government to increase the level of compensation provided by the Financial Assistance Scheme (a taxpayer-funded scheme set up to provide compensation to members of defined benefit pension schemes that started to wind up before April 2005). The Pension Protection Fund (PPF), set up under the Pensions Act 2004 to provide compensation to members of schemes that started to wind up underfunded from 6 April 2005, is funded by a levy on schemes, the assets of schemes transferred to it and investment returns. If the requirements of the Insolvency Directive no longer applied, the UK Government would probably have greater latitude to decide what levels of protection were appropriate.



Reference: 1(external link)