Memorandum submitted by the Institute
In reply to your letter of 20 July 2001 to Nina
Wilkins, may I thank you for giving the Institute of Directors
(IoD) the opportunity to contribute to your Committee's inquiry
into democracy and accountability in the EU and the role of national
parliaments. The IoD is a non-political organisation with some
68,000 members world-wide, 54,000 in the UK, whose aim is to help
directors to fulfil their leadership responsibilities in creating
wealth for the benefit of business and society as a whole.
We would not claim to be experts on the issues
raised in your inquiry but we would nevertheless like to offer
our perceptionsfrom a business representative organisation's
point of view. Many of the activities of the EU significantly
impinge on business's activitiessome helpful (for example,
the progress, albeit incomplete, on the Single Market) and some
unhelpful (for example, the additional red tape arising from the
employment regulations). And, therefore, the way in which the
EU operates, its relationship with national parliaments and the
allocation of powers between differing layers of government are
issues of considerable relevance to us.
We see a huge contrast between the influence
we can bring to bear and the ease of access we have to the institutions
of national government (for example, meeting with Ministers and
Civil Servants and access to UK government Consultation Documents),
on the one hand, and the remoteness of, for example, the Commission
and its alien (non Anglo-Saxon) way of operating, on the other.
If we were to join the euro (to which we have economic as well
as constitutional concerns) the feeling of remoteness from relevant
decision-making would, of course, be greatly exacerbated. For
this reason alone, even if there were no other, we strongly favour
delegating as much of the decision-making from EU institutions
to national institutions. We strongly favour a more diverse EU
and one less determined to smother nation states in bureaucratic
uniformity. (Completing the Single Market, by the way, should
be about opening up uncompetitive and closed marketsnot
more regulation.) Moreover, with the possibility of major enlargement
(and the proposed membership of large and relatively poor countries),
increased diversity is an eminently sensible way of proceeding.
May I now offer you our thoughts on your specific
I. What are the underlying reasons for the
apparent "disconnection" between national electorates
and the EU?
The EU is widely perceived to be an alien set
of institutions ruling over, rather than representing and working
for, the various populations of the member states. The recent
referendums in Denmark (on the euro) and Ireland (on the Nice
Treaty, which many of the electorate believed to be on the euro)
are indicators of the disconnection between people and the EU.
There are clear signs that many people feel that the EU legislates
and, therefore, intervenes far too much in their lives. (The Irish
referendum threw up many a quote along the lines of "we didn't
throw off government from London to be replaced by government
from Brussels".) In short, many people perceive the EU as
harming individual liberty and undermining the sovereignty of
their democratically governed nation states.
II. How can decision making be made more open
and governments more accountable for the decisions that they make
in the Council? Is it essential for a more open and accountable
EU that the Council meets in public when legislating?
Could we suggest that governments might be required
to secure the approval of their negotiating positions from their
national parliaments before meetings of the Council of Ministers
are held? All ministers should then report back to their respective
parliaments after meetings of the Council of Ministers.
The issue of whether or not meetings of the
Council of Ministers should be public when legislating is not
the crucial issue. The principal issue, as we have already implied,
is for the institutions of the EU as a whole to legislate and
regulate less and for more power to be transferred to national
governments. The CAP and CFP are prime examples for repatriation.
III. What should the role of referendums be
in the EU? How should the EU respond to national referendums and
could there be a role for Europe-wide referendums?
All countries should hold referendums if changes
to the Treaties of the EU are proposed. If just one country's
electorate rejects any proposed changes, the proposed changes
should fall. (And we are watching the developments concerning
the Nice Treaty, following Ireland's rejection with some interest.)
We believe that there is no case for Europe-wide
referendums because we view the EU as a group of independently
governed nation states and not a political entity as such. Following
on from this we would claim that a European Union "electorate",
as such, does not existthere are only the separate electorates
of the different nation states of the EU.
IV. Would election of the Commission or the
President of the Commission either directly or by the European
Parliament (a) be appropriate or (b) contribute to reconnecting
electorates with the EU?
It would be inappropriate to elect (directly
or indirectly) either the Commission or the Commission President.
As we have already implied, the powers of the Commission and its
President should be curtailed. All members of the Commission should
simply be civil servants, working to carry out the instructions
of the Council of Ministerswho are clearly and unambiguously
accountable to their democratically elected parliaments. Any form
of election would strengthen the political pretensions of the
Commission and its President because they could claim that they
had "democratic legitimacy." Any such an increase in
democratic legitimacy would inevitably be at the expense of democratically
elected national representatives.
We believe that this is likely to exacerbate
the feelings of "disconnection" and the disillusion
with the EU as expressed in the two recent referendums we have
already referred to. The main message coming out of the referendums
was surely that people want to feel that their national politicians
(whom they can "throw out" in a general election) are
running, as far as possible, their countries. They would not,
therefore, wish to see their national politicians lose more power
and influence to the Commission and its President.
V. Should there be any new institutional arrangements
to give national parliaments a more important role in the EU,
such as the second chamber proposed by the PM or involvement of
national parliamentarians in the Council?
Arguably, some MEPs are bent on augmenting the
power of the EU in general, and the European Parliament in particular,
whereas, in fact much of the British electorate would like the
EU and its Parliament to do less. Under these circumstances, the
number of MEPs should be reduced. As far as the UK is concerned,
the European Parliament and its MEPs have little legitimacy and
relevance to their lives. The turnout in the 1999 EU elections
was abysmal and indicative of just how irrelevant 3/4 of the British
electorate felt the European Parliament to be.
Rather than creating a second chamber or involving
national parliamentarians in the proceedings of the Council of
Ministers, national parliaments should have greater opportunities
to be able to veto some EU legislation from becoming law and/or
there should be a greater emphasis on subsidiarity.
VI. What changes are needed to the EU's legislative
process to facilitate democratic scrutiny before decisions are
made? For example, is there adequate consultation at early enough
stages; and should there be tougher rules on allowing time for
scrutiny by national parliaments?
There does not appear to be sufficient consultation
at an early enough stage about proposed EU legislation. National
parliaments should either play a greater role in these consultations
at an early stage (consulting with interested parties), or they
should be able to prevent the imposition of some EU inspired laws
at a later stage.
VII. Could national parliaments play a greater
role in informing the public about the EU and its activities and
in channelling the public's views to EU institutions?
The British Parliament probably already does
highlight the role of the EU in the life of the UK quite wellthough
there is too little emphasis on the total impact of EU membership
on the lives of British people and business. A good case in point
has been the recent debate on the future of farming and the plans
for reform. Very little seemed to be made of the restrictions
on British agricultural policy imposed by CAP and the poor prospects
for radical reform of this policy.
We do not know in any detail just how the Westminster
Parliament already channels the public's views on the EU and related
issues to the appropriate institutions. Clearly it has a duty
to do so. We suspect the EU's institutions learn more about the
public's views from our eurosceptic press.
VIII. What is the potential contribution of
delimitation of competences, subsidiarity and variable speed Europe
to reducing any "disconnection" between electorates
and political institutions? Would a clear statement of the EU's
purpose help? What impact will enlargement have?
As we have already implied, we believe that
subsidiarity and a variable speed Europe could help to reduce
the "disconnection" that exists between the various
individual electorates of the member states of the EU and its
institutions. There is no need for all EU states to adopt the
same law in precisely the same way on every single occasion. There
should be greater flexibility (diversity in the implementation
of legislation so that policies are tailored to local traditions
and needs). Unfortunately, to date subsidiarity has been something
of a "dead letter" because regulations and laws that
should be made at the national level continue to be devised and
imposed by the EU institutions. The Information and Consultation
Directive is a case in point.
Publishing a clear statement of the EU's purpose
would not necessarily be of much use. Quite probably, the purpose
of the EU for some European countries (eg France and Germany)
would be fundamentally different from the British view. For example,
the EU has principally been about political union for France and
Germany (and this includes Economic and Monetary Unions and the
Single Currency)this has never been the case for the UK.
Even if a statement could be produced that was
amenable to Britain's foreign policy objectives, it would, as
far as we're concerned, be a valueless exercise unless it gave
substantive guarantees that the institutions of the EU would intervene
less in the affairs of the member states. Additionally, the European
Court of Justice would have to be committed to defending the autonomy
of the member states against the centralising ambitions of the
other EU institutions. Unfortunately, this seems unlikely to happen.
As we have already implied, enlargement should ideally give a
fillip to the concept of subsidiarity, encourage tendencies towards
a variable speed Europe and increase flexibility and diversity.
Increased diversity is an eminently sensible way to proceed. But,
in fact, this may not occur. After all, the existing applicant
countries are currently required to adopt the acquis communautaire
in full and to adopt the Euro as their currency.
IX. What contribution can be made by regional
and local government and devolved institutions in the UK and elsewhere
and should the EU have any new institutional arrangements in this
We would be surprised if the activities of regional
and local government in England (and, indeed, the Territories'
devolved institutions) significantly ameliorated the alienation
that the British electorate feel towards the institutions of the
EU. (And we have no reason to believe it would be significantly
different in other member statesthough we do not follow
such governmental issues closely.) The problem is especially acute
in England because, as well as having weak local government, the
regional bodies have little powerthey suffer from a legitimacy
The EU should not have any new institutional
arrangements in this respect. More institutions, bureaucrats and
politicians will simply antagonise further the electorates of
the member states. The EU should really take heed of the results
of the Danish and Irish referendums and devolve power back to
those member states that want it.
X. What is the role of the European Parliament
in promoting a more democratic EU? Is there scope for more cooperation
between the European Parliament and national Parliaments?
To an extent, the European Parliament is part
of the problem, not the solution. Many people in the UK are opposed
to the whole concept of the EU as a super-national bodymany
polls show a sizeable minority (sometimes even a majority) wishing
to leave the EU. Turnouts at elections for the European Parliament
in the UK are very low because the institution is perceived to
be at best an irrelevance and at worst an alien institution intent
on furthering its own objectives (the accretion of more power)
rather than representing the electorate.
Ideally, national parliaments should have greater
say over whether EU inspired legislation actually becomes national
XI. How should the debate on the future of
Europe be conducted, eg should there be a convention, and if so,
how could it be made representative and how should it operate?
There should not be a convention for the simple
reason that it probably cannot be made sufficiently representative
of the UK population's views. National governments should discuss
what, if any, treaty changes are required. And national electorates
should all have an opportunity to support or reject any proposed
If you have any queries please do not hesitate
to contact me.
7 September 2001