Reconceptualising and Delivering Social Policy: Competing Challenges in (Post-)Brexit and Pandemic Europe
Linda Hantrais
Before the installation of the new European Commission in December 2019 and the conclusion of the Withdrawal Agreement in January 2020, social scientists speculated about the implications that Brexit might have for EU and UK social policy (Hantrais, 2019). Ursula von der Leyen’s commission assumed office at the same time as the Conservative government led by Boris Johnson opened a new parliament with a substantially increased majority. These leadership changes created the conditions needed for the Withdrawal Agreement to be ratified on January 31st. The post-Brexit transitional phase in the negotiations could then begin. Workers’ rights, freedom of movement and state aid were identified at the outset as areas for potential disagreement between the UK and EU institutions. Neither side anticipated the global threat that would be posed by the Covid-19 pandemic nor its longer-term impact on EU and UK social policy, as the crisis temporarily eclipsed the Brexit negotiations.
As with many other areas of EU social policy, healthcare systems remain a national competence, whereas public health is shared between national and EU governing bodies (article 168 of the Lisbon treaty). On the one hand, EU-level action is directed towards preventing physical and mental illnesses and dangers to health, including ‘the fight against major health scourges’. On the other, member states remain responsible for the definition of their public-health policy and the organisation and delivery of health services and medical care. This distribution of powers created a fertile environment in which competing and conflicting policy objectives quickly surfaced at EU and national levels.
Social rights during the Brexit negotiations
The UK referendum in 2016 served as a wake-up call and a trigger for EU institutions to review and modernise European social policy. The vote to leave provided an opportunity for the commission to promote social integration in the knowledge that UK-led opposition would no longer be able to block proposals for enhancing social rights. The then commission president, Jean-Claude Juncker, exploited the occasion to prepare his own legacy by launching the European Pillar of Social Rights to counter growing populism and disillusionment with the European project.
A major difference between the Withdrawal Agreement proposed by Theresa May (rejected by the UK Parliament in 2019) and Boris Johnson’s tweaked version (ratified in January 2020) lay in the removal of May’s commitment to respect EU social standards. The Johnson government explicitly excluded the close regulatory alignment advocated by May. The UK refused to operate the level playing field—the new commission’s mantra in 2020 under von der Leyen’s presidency—by following EU rules on government subsidies to industry, workers’ rights and environmental protection. The EU27 negotiators were intent on preventing the UK from gaining an unfair advantage if its regulations diverged from those of the EU.
In recognition of national diversity in social-protection systems, the commission established a Social Scoreboard to accompany Juncker’s EPSR. The scoreboard served as a ‘screening device’ and monitoring tool for tracking the comparative performance of member states and assessing the social situation in individual countries. The area of public support / social protection and inclusion in the Scoreboard compares data about self-reported unmet need for medical care, healthy life years and out-of-pocket expenditure on healthcare. In addition, the commission has long been developing a series of 88 European Core Health Indicators (ECHI), providing comparative information on health status, health determinants and healthcare interventions. Although the ECHI did not document the preparedness of individual member states for a pandemic on the scale of Covid-19, they indicated the readiness of different regions to respond to challenges the public health sector would face, specifically by providing services to meet the demands of an ageing population.
Signs of social fragmentation in member states
The unity displayed among the EU27 during the withdrawal negotiations concealed signs of fragmentation in the social arena. A consultation in 2017 about Juncker’s proposals for the EPSR revealed differing degrees of resistance among member states to centralised regulatory powers and associated keenness to retain control over the social-policy domain.
These underlying tensions resurfaced during the 2021-27 EU budget discussions in 2018, foreshadowing subsequent reactions to the coronavirus outbreak and the risks it would pose to European integration. The commission was proposing further strengthening of the EU’s social dimension through a more flexible and simplified version of the European Social Fund (a European Social Fund Plus), together with a more effective European Globalisation Adjustment Fund. By pooling resources, the aim was to allow more integrated and targeted support in response to the social and, more particularly, labour-market challenges highlighted in the Social Scoreboard.
By February 2020, with the UK having formally left the EU, the loss of its 10 per cent contribution to the total budget was acknowledged as a significant factor constraining its size. Social (qua workers’) rights were no longer a priority for the commission. Yet it was clear that any cuts in funding would have serious implications for the social arena, hampering redistribution of resources from wealthier member states to the cohesion countries. The European Council’s failure to reach agreement over the budget at its meeting in February further evidenced underlying divisions. The ‘frugal’ member states—Austria, Denmark, Finland, Germany, the Netherlands and Sweden (later to become the ‘frugal four’ when Finland and Germany changed their approach)—advocated capping the budget at 1 per cent of EU gross domestic product and focusing on more ‘modern’ (economic) policy priorities. By contrast, the 17 ‘friends of cohesion’ group of countries (essentially the southern and eastern member states) sought reassurances that they would not be left on the periphery, as implied in Juncker’s proposal. They argued for continuing support for cohesion policy if the EU were to achieve greater economic and social convergence among member states (Boucart, 2020).
The challenge of the coronavirus shock
With the commission reluctant to acknowledge the seriousness of the outbreak and the European Council unable to agree on a concerted collective approach, governments initially reacted unilaterally and at different speeds to the Covid-19 crisis with protective and preventative measures (Hantrais and Letablier, 2021). One of the core conditions for EU membership, free movement of citizens—on which the EU’s Brexit negotiators remained adamant—was the first red line to be widely crossed. Without waiting for instructions from Brussels, by mid-March 2020 member states seized the initiative and closed their borders to prevent the spread of the virus. The UK kept its borders open.
Other measures—bans on public events and gatherings, closure of workplaces and schools, social and physical distancing, the wearing of face coverings and personal protective equipment—were introduced progressively and differentially as the pandemic progressed. On March 10th, EU heads of state and government collectively recognised the situation as a policy crisis emergency, severely testing EU solidarity and justifying a co-ordinated response. Despite the apparent unity expressed in the summit’s conclusions, national leaders disagreed over how to contain the pandemic without causing irreparable damage to economic and social life.
Amid growing criticism of its lack of EU leadership, on March 16th the commission began unveiling its own proposals based on the summit’s conclusions. Citizens of non-Schengen EU countries, including the UK, were invited to apply restrictions on non-essential travel from non-EU countries in the hope that they would ease bans within the EU. Throughout the pandemic, in formulating recommendations for implementing and easing protective measures, the commission drew on carefully argued risk assessments provided by the European Centre for Disease Prevention and Control, an EU agency based in Sweden. The ECDC’s March 23rd edition offered the commission a timely reminder: ‘Restrictive public health measures must always respect existing national legislation, as well as international legal and ethical principles.’
In subsequent weeks, commission pronouncements came with increasing frequency as deaths from the virus spiked in several member states. Following actions taken by national governments, state aid—another of those EU red lines—was recognised as an essential source of social support for furloughed workers and their families at risk of poverty. On April 2nd, von der Leyen announced an EU-backed scheme, SURE, deploying the structural funds to support short-time workers in member states. The scheme relaxed rules on state aid and suspended strict regulations on budget deficits in the eurozone countries.
The commission used its shared public-health competence to advocate direct emergency support for national healthcare sectors and for the manufacturing capacity of industry through fiscal incentives, state aid and flexibility in public procurement. While the commission was finalising guidelines on medicines, its lockdown exit plan was circulated to national officials, before being made public on April 7th. Within governments, ministers of finance and health were struggling with conflicting interests and pressures in planning their own exit strategies and did not want their plans to be co-ordinated by Brussels. Heads of state and government reacted angrily, forcing the commission into another U-turn (Bayer, 2020).
The Next Generation EU economic recovery fund, negotiated alongside the budget settlement, was eventually agreed on July 21st, after further acrimonious summits. This compromise involved full flexibility in budgetary and state-aid rules to repair the damage from the crisis. A few weeks later, the way was tentatively opened in the negotiations over the UK-EU future relationship for compromise and agreement on regulatory coherence and non-regression for labour standards.
Conclusion
Throughout the history of the European Union, the social dimension played a relatively minor, though necessary, role in shaping the European project. Entrenched positions over social rights during the Brexit negotiations indicated that they would be contentious issues. The negotiators did not however predict that an existential global crisis would put social issues centre-stage.
As Europe became the epicentre of the coronavirus pandemic, EU institutions and societies were confronted with unprecedented political, economic and societal challenges, which threatened the very foundations of the European project. The unity demonstrated at EU level during the first stage in the Brexit negotiations concealed latent tensions and divisions over social issues, within and between EU member states, and underlying hostility to creeping EU control over the social domain. Member states exercised their treaty responsibility to define their health policies and organise and deliver health services and medical care in accordance with their own resources and political priorities, rather than EU regulations. True to the principle of subsidiarity, social-policy responses to Covid-19 were shaped primarily by national and local socio-demographic, economic and political conditions (Hantrais and Letablier, 2021). The European Commission signalled its complicity by relaxing hitherto constraining rules, notably on freedom of movement and state aid.
The differential responses to the crisis suggest that the challenges and opportunities created in all areas of economic, political and social life in the EU and the UK were shaped to a much greater extent by the pandemic shock than by the UK’s withdrawal from the EU. It might even have brought the EU and UK closer to agreeing a mutually acceptable post-Brexit deal, though tensions were to persist as the negotiations wore on. Whether the longer-term impacts of the shock will prove to be more influential than Brexit in bringing European social integration any closer remains an open question for future generations of social scientists.
References
Bayer, L (2020), ‘Brussels drops lockdown exit plan after anger from capitals: governments force Commission into U-turn over fears it was moving too quickly’, Politico, 7 April
Boucart, T (2020), ‘EU budget: the rule of “Deadlock as usual”’, New Federalist, 2 March
Hantrais, L (2019), What Brexit Means for EU and UK Social Policy, Bristol: Policy Press
Hantrais, L and M-T Letablier (2021), Comparing and Contrasting the Impact of the Covid-19 Pandemic in the European Union, London and New York: Routledge