My Column – Beware of the European Union Bearing Gifts

History seems to repeat itself in the European Parliament altogether too often. This week in Strasbourg the European Parliament voted for a well-meaning yet naive proposal to cap the costs that can be charged for card payments at a very low level. Whether this ever actually becomes law is an open question, but in the meantime no doubt we will hear plenty of it from the EU’s PR machine.

Remember when the European Parliament voted to end mobile phone roaming charges whilst in other European countries? It happened a number of years ago, but was finally due to come into force at the end of this year.

In the meantime, forgetting the legislation, consumer demand had already overtaken the EU’s processes. Imagine that phone companies were preparing to comply. They’d be removing charges from phone calls from other EU countries. But in fact, something very different occurred. With no legislative prodding at all, providers started to respond to demand. From Australia or the USA, with New Zealand soon to follow, charges are scrapped with my provider: I can call home for free. Non-EU European countries like Norway and Switzerland got in on the act too. In fact, calling home is now free from more non-EU countries than EU countries – despite the obvious point that Europe is geographically closer than the USA, Indonesia or Sri Lanka.

The EU didn’t do it, the market did. But for years, when asked to provide just a single benefit of EU membership to ordinary people that we can’t get outside, the go-to answer was that mobile phone prices would come down. Just like the EU claiming credit for NATO’s success in keeping the peace in Europe, or for ‘European funding’ that just gives us some of our own taxes back with strings attached, they claimed the credit for the role of the free market.

If you force these things to happen when a company can’t make a business case for it (yes, my phone calls from Belgium when I’m in the European Parliament are still pricey), then they’ll just quietly put up their line rental prices to cover the cost. Frankly, I think that would be a bad thing: the public shouldn’t have to pay to subsidise what would be free international calls for MEPs!

And then, this year, the proposal was quietly scrapped. Not with the fanfare that had greeted the announcement in the first place, but with a tumbleweed blowing across the front of the European Parliament.

You can read the rest of this article at my Huffington Post blog here.

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