Select Committee on European Legislation Twenty-Ninth Report


Proposal for transfer of appropriations No. 23/97 — Section III — Commission — of the general budget for the financial year 1997
Legal base: Article 26(4) of the Financial Regulation; qualified majority voting
Department: HM Treasury
Basis of consideration: Minster's letter dated 28 April
Previous consideration: HC 155-iii (1997-98), paragraph 10 (30 July 1997)
Committee's assessment: Legally important
Committee's decision: Cleared


    7.1  The background to this proposal is that the 1997 budget had appropriated 10 million ECU (£7.37 million) of commitments and payments to the reserves with a view to funding pilot measures to assist refugees within the European Union. The Commission subsequently produced policy and operational guidelines proposing 7.1 million ECU (£5.23 million) of support for pilot projects and 2.9 million ECU (£2.14 million) for analysis, evaluation, awareness raising and related matters. In accordance with the procedure laid down in the Financial Regulation, the Commission was proposing the transfer of the 10 million ECU from the reserves to permit the expenditure to take place.

    7.2  In the conclusion of our Report of 30 July we noted that the expenditure proposed related to a pilot scheme but that the Budget Committee had recommended that the Council should give a negative opinion on the transfer on the grounds that it lacked a legal base. We noted that when an action is clearly a pilot scheme, the lack of a specific legal base should not normally be a problem. We therefore asked the Government to explain the reasons for the Budget Committee's decision and to tell us whether the transfer had now been authorised in spite of the negative opinion.

The Government's response

    7.3  The Government's response is contained in a letter dated 28 April 1998 from the Economic Secretary to the Treasury (Helen Liddell), in which she apologises for the Government's tardy response.

    7.4  In her reply she confirms that the European Parliament notified the Council on 23 July that on 14 July the Parliament's Budget Committee had decided to authorise this transfer of non-compulsory expenditure and that the negative opinion recommended by the Council Budget Committee did not prevail.

    7.5  Explaining the reasons for the Budget's Committee's recommendation she tells us:

        "Our reports indicated that the transfer was discussed on 27 June, and when it was considered again on 11 July "it was rejected by a qualified majority, in the absence of a legal base for the proposed expenditure". In the 27 June discussion, it appears that there was concern both at expenditure being presented as a pilot scheme to excuse a lack of legal base, and moreover that the purpose of the proposed expenditure was much more appropriate to action under the Third Pillar than to a Commission initiative, on which score also it required a legal base. The Committee anticipated that the European Parliament, which has the final say on non-compulsory expenditure, would support the transfer, but all the same felt that the Council should show dissatisfaction by the negative opinion which was given".


    7.6  This is another case where the European Parliament has taken a different view from the Council based, apparently, on the merits of the proposal rather than the legitimacy of the expenditure. We note what happened but at this stage see little point in recommending a debate. The document is therefore cleared.

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Prepared 3 July 1998