Examination of Witnesses (Questions 1-19)
17 DECEMBER 2003
MR DENIS
MACSHANE MP, MR
DAVID FROST,
MR TIM
BARROW AND
MR PAUL
JOHNSTON
Q1 Chairman: Minister, welcome to the
European Scrutiny Committee yet again. It is good to have you
and your colleagues here. The IGC broke down last week. Was it
just because of the voting system?
Mr MacShane: Principally, yes.
There were positions that could not be bridged. They have been
reported in the papers: France and Germany broadly on one side;
Spain and Poland on the other. We tried to build those bridges
but we did not succeed. That was the proximate cause of the fact
that we did not agree this weekend.
Q2 Chairman: We were all watching it
on the television. I did not see many sad faces on our Government's
side. Where do we go from here?
Mr MacShane: We will wait for
the Irish presidency to start. The Foreign Secretary was in Dublin
yesterday and I have taken the liberty of bringing his speech
with me. The Irish presidency will take soundings and report to
the European Council in March and we will get an inkling there.
We may see developments earlier next year amongst the principal
countries that were disagreeing on the voting weights, though
I have to say from reading some of the continental press and from
the reports of our ambassadors I do not sense a great shift of
where people were as of last Friday and Saturday.
Q3 Mr Marshall: Maybe I can ask the question
overtly which the Chair is clearly seeking to ask you covertly.
Is Britain unhappy with the outcome of the IGC?
Mr MacShane: The British Government
would have liked to have a satisfactory constitutional treaty.
There was a lot in it, as the Prime Minister made clear in his
statement to the House on Monday, which we warmly support. We
were very much in the lead in putting that forward. To take one
specific example, an increased role for national parliaments.
A second one would have been a standing chair of the Council of
Ministers which in a sense is a council of nations which we think
would have given greater equilibrium vis-a"-vis the
Commission president and clearer leadership to the work of the
Council; and an end to the six month rotating presidency which
were 25 Member States—we hope more—which will mean
probably only five or six times a century does a country hold
the presidency of the European Union. There were some good things
in there that we would like to have seen but as we said in paragraph
26 of the White Paper published on 9 September and, as the Foreign
Secretary, the Prime Minister and myself have made clear, the
European Union does not stop. The treaties of Nice, Amsterdam,
Maastricht, the existing rules, the constitution, if you like,
of the European Union is there in place in any event. Some of
the issues that would have been decided at the IGC would not even
have come into play until 2009.
Q4 Mr Connarty: On the question of the
voting weights, the Minister will recall coming back from Nice
and the government telling us that Nice was the contract with
the new accession countries, that we would bring them in. It was
all very sensible. Many countries went to a referendum on that
issue, some, like Ireland, twice, but it was sold on the basis
of the Nice formula. We have been in Poland and talked to the
Polish Government. Is it not reasonable that a country like Poland,
who struck a deal at Nice and put it to the people, should not
be expected after another process that is not a treaty process
to change their mind and to betray the trust that their people
put in them in the referendum? Is that not an unreasonable thing
for people to try to do and was it not inevitable that they would
stand firm on that, as presumably we would if we ever had a referendum
on a similar issue?
Mr MacShane: I think we need to
get a time line into this. Very soon after the Nice Treaty was
signed, it became evident that many governments in Europe were
unhappy with aspects of it and did not feel that it was adequate
to handle enlargement and future enlargements as successfully
as one would wish. Hence, the decision at Laeken to set up the
convention process and where we got to this weekend. I have been
in Poland a lot. I must in all honesty report to the Committee
that I did not get a sense in Poland, before the convention text
was put to the peoples of Europe in June and July this year, that
the issue of voting rights was of huge importance. Looking at
the referendum debate in Poland, I did not sense that this was
a major issue. It was by contrast for the Spanish. My Spanish
opposite numbers from day one have said, "We want to stick
to Nice. We want to assure our weight in votes is maintained."
When the constitutional treaty draft was put forward by Mr Giscard
d'Estaing, it was at that point onwards that the Poles became
extremely concerned. I am adamant on this issue. That has always
been accepted by this Government. We said in the White Paper we
are content with Nice. We are also content with the convention
proposals. We had hoped that a compromise might be possible but
that was not the case.
Q5 Mr David: It has been suggested in
the press and elsewhere that, quietly, the reality was that Britain
was quite supportive of Poland.
Mr MacShane: We have the warmest
of relations with the Poles and with the Spanish, the French and
the Germans. We have said publicly—the Prime Minister said
it on Monday but repeating what he said previously—yes,
you have to accept the reality of the Polish political position.
They were where they were, as it were. It is difficult for the
Polish Prime Minister to return having come with a very clear
red line, just as it would have been for us. Equally though, my
last conversation with Mr Fischer was 10 days before the convention
in Naples and he said, "Please convey back to your Government
that for us the convention voting arrangement is our red line.
We are happy to talk about all the other issues, but it is of
fundamental importance to us", so two red lines clashed.
We will just have to examine this, or the Irish presidency will,
and see whether we come back to the negotiating table in the immediate
future.
Q6 Mr Heathcoat-Amory: In the Prime Minister's
statement on Monday, he implied that all British positions had
been secured. When I asked him whether this was in writing and
would be reflected in any revised text, he did not give a very
clear answer. It has been reported to us that there was very little
discussion on the other issues, apart from defence and the voting
issue. Which, of the red line issues have been secured in the
negotiation before the breakdown and is this in writing? The Prime
Minister referred to 82 measures which had been agreed but perhaps
you can enlighten us and be very clear and specific about whether
the agreement is in writing and therefore reflected in any revised
text, if it is tabled.
Mr MacShane: The reference to
the 82 points which were near consensus was the Prime Minister
quoting verbatim what Mr Berlusconi, as President of the European
Council, said in the conclusion of the Council meeting on Saturday
afternoon. Mr Berlusconi was basing himself on a presidency document
issued, if memory serves me right, on 24 October, which outlined
the areas where consensus had been arrived at. Mr Berlusconi also
in that same statement said that countries agreed that unanimity
should be maintained in areas like taxation, social security and
the financing of the EU. That is his statement as president. We
do not have any written text from the discussions on Friday and
Saturday because those were all in the form of bilaterals or full
plenary sessions or tri or quadrilaterals. Any finished text would
have been produced on the basis of the entire treaty being settled.
We never got to that point but there, in front of 24 other heads
of government, Mr Berlusconi on behalf of the presidency of the
Council made those references to unanimity. We believe that it
is reasonable for Britain to say that those should be banked and
we will not return to them if we restart negotiations shortly.
To give Mr Heathcoat-Amory a direct answer, there is not in writing
anything that is a European IGC conclusion from Friday or Saturday
and, to quote the Prime Minister and the Foreign Secretary, nothing
is agreed until everything is agreed. Were we to start the talks
again in the near future, we would certainly be saying to our
Irish friends—and they share our view on taxation 100%—that
the presidency statement at the end of the talks at about two
or three o'clock Saturday afternoon should now be the starting
point for the reopening of any discussions.
Q7 Mr Tynan: You have made a point as
regards the breakdown of the talks and the fact that we do not
have a constitution agreed, but there will be an opportunity as
regards the next presidency in Ireland. There is a feeling that
the further presidency may be an opportunity, the one after the
Irish one, and we may have to wait that long. If you were a betting
man, do you believe that we are going to arrive at a conclusion
that will lead to a constitution for the European Union?
Mr MacShane: My grandfather, God
rest his soul, apparently did terrible things with parts of the
family finance through betting a long time ago, so I have foresworn
that pleasure. I did place a bet on who would become Mayor of
London and lost but that is another story. We have a constitution
for Europe in the sense of constitutional treaties that provide
very clear rules. Honourable Members yesterday in the House of
Commons were animadverting about the term "ever closer union"
and the fact that it had been replaced by language about Europe
united. Now, ever closer union remains in the treaties which govern
how we take Europe forward. We have strong rules covering all
aspects of the European Union which together form a set of constitutional
treaties which we honour and abide by. I still believe that there
was much that was on offer from the convention text which was
of high importance, certainly for Britain's vision of Europe.
I have alluded to some aspects of it which will be worth having.
Whether the hunger is there immediately to start renegotiating,
I do not know. I just have to report that. We are all pausing.
We are taking stock. It is a period of reflection. I think that
is very much the Foreign Secretary's phrase from his speech in
Dublin yesterday. I am not ducking the question but I would feel
in a much stronger position to answer that in a future scrutiny
hearing of this Committee some time into the new year.
Q8 Mr Cash: I would like to look below
the camouflage of the voting weights question because the question
of how it was that they came to be given what others regarded
as a disproportionate number of votes has a lot to do with the
problems that Poland has in other areas, such as the 25% subsidies
that they were offered. The Government in Poland quite clearly
had to come back with something; otherwise, they would never have
got the referendum through, which is why I raised this with the
Prime Minister yesterday. The problem has been made somewhat worse,
I would suggest, by the fact that it appears that the United Kingdom
has gone along with this restriction on the budget itself, which
is going to have a knock-on effect as far as Poland is concerned.
They cannot understand why the United Kingdom has made itself
a party to this disreputable attack on Poland and the other countries.
Would it not be fair to say that the real question here is that
there is a serious divergence of view, quite apart from what the
Prime Minister said yesterday in suggesting it was just about
voting weights, and that the real reason why Poland took the line
they did was because they were deeply disillusioned by the manner
in which they were being treated?
Mr MacShane: I have some interest
and knowledge of Polish politics. I find that there is a refreshing
enthusiasm about being an active, full-hearted European Union
member that I wish might infect certain quarters, even in my own
country. Poland was ready to sign up, to my knowledge, to most
other parts of the constitutional treaty as we were, but it became
a fundamental point of national importance to Poland to maintain
the voting weight it was accorded in the Nice Treaty. The common
letter from six EU heads of government on the European Union budget
I think reflects a commitment to very sound, small `c' conservative
budgetary thinking, that the European Union should not be profligate.
As you know, Europe can spend up to 1.27% of EU GDP. At the moment,
we are spending far less than that. Let me inform the Committee
because there has been considerable confusion in the press. This
letter was drafted and signed prior to the summit meeting last
weekend, so it is not a consequence of the summit breakdown.
Q9 Mr Cash: Do you think it might have
been the cause?
Mr MacShane: The notion that a
letter that is not published can in any way affect—
Q10 Mr Cash: They may not even tell you.
Mr MacShane: Normally, you send
a letter to the Commission. It is presented to the Commission.
You agree it; you sign it; you send it. The date of its receipt
is a matter separate from the decision to send it. The basic point
is that, if we are asking a number of European countries to cut
public expenditure, they are in a difficult position then if they
are expected to increase public expenditure in the sense of transfers
to Brussels. The important thing, it seems to me—and this
was very well set out by the Foreign Secretary's speech yesterday
and it is a point I have incessantly made as Europe Minister—is
that we need to get European growth and job creation going again.
That will increase the fiscal receipts by definition to Brussels.
One per cent of nine trillion euros is a lot more than 1% of the
current eight plus trillion euros. The money is available then
to the accession states. To finish this point, Poland is receiving,
as are the other accession states, between 2.5 and 3% of GDP in
help from Europe. It is generous. Absorbing it, as we see with
objective 1 funds in our own country, may pose problems. Spain
does face, with the freezing of the common agricultural policy
spending and the discussion about the reallocation of structural,
regional funds, quite a considerable set of difficult political
issues ahead for the Spanish Government. Spain and Poland are
not really in the same camp with regard to this, but I am very
happy that a variety of governments from different perspectives,
some taking quite different positions on Friday and Saturday,
nonetheless are saying that the budget of the European Union should
be exercised in a very prudent manner.
Q11 Mr Davis: To be fair to the Poles,
would you have expected them to make an issue of voting weights
before the convention proposed a change in what had previously
been agreed?
Mr MacShane: The issue of how
you take decisions in Europe has become of high importance, particularly
since the Amsterdam and Nice Treaties. There has been out there
a constant argument that the so-called double majority makes the
most sense. In all systems of governance, how do you allocate
votes? California and Vermont have two senators each. Bremen,
with a population of not even a few hundred thousand, has nearly
the same number of senators as North Rhine Westphalia with 18
million inhabitants. This is in the German Bundesrat. The issue
becomes difficult when you have one country that is more than
twice the size of Poland and Spain and has 30% more substantial
population than the UK or France, namely Germany. As Otto Schilly,
the Interior Minister, put to me—I do not think it is a
conversation he would wish to keep private—if every country
of a few hundred thousand was going to have a commissioner then
maybe every German Land should have a commissioner. He was joking,
I hope, but these issues are out there and they are serious ones.
I hope I bend over backwards to understand and support friends
in Poland but certainly from the summer holidays onwards it was
absolutely clear that that was a Polish position. I regret that
perhaps more accommodation was not made, but I also have to report
that there are other countries absolutely clear that the conventional
voting system should be maintained.
Q12 Mr Davis: You seemed to be expressing
some surprise that the Poles had not made an issue of voting weights
until they did, unlike the Spanish. Why was it a mistake for the
Poles to think that something that was agreed as recently as Nice
should be cancelled or changed? I understand your point about
population sizes, but they have not changed since Nice. All these
factors were known at the time of the Nice agreement. Why should
not the Poles believe that what is agreed is agreed?
Mr MacShane: That is a very fair
point but in that case why did we start the convention at all?
Why did we have the Laeken declaration? Why did all of Europe,
from whatever perspectives they come from, launch this process?
I was not Minister for Europe at the time. There were members
of this Committee here who were. I am not sure if the Committee
raised its voice in protest and said, "We are quite happy
with Nice and see no need to change anything." The convention
process got underway and I certainly bow to the right honourable
gentleman for Wells who was there extremely diligently. It is
not for me to ask a member of the Committee, but he might be able
to help us in saying whether the Polish representatives at it
really made this an issue in the way that I think British Government
representatives and parliamentarians made our so-called red lines
pretty well known. My impression is—and I am not criticising
anybody—I think it was rather difficult for the 10 accession
countries to operate in the convention process with quite the
same authority as existing EU Member States. I am sure it was
raised by Mrs Hubner who is an outstanding Polish European but
I am only making the point that I was at Thessaloniki and no one
was coming up to me saying, "This is absolutely unacceptable.
You must tell the Prime Minister that the recommendations on double
majority are absolutely out of order." It became clear they
were unacceptable. The Spanish had always made it clear. I am
not complaining about this but I think it stresses the point that
a number of us are making that the future construction of Europe
will need cards much more clearly on the table and positions taken.
I think we did that through the White Paper that was published.
Everybody knew. The parliamentary document was properly discussed
in the House of Commons. There was the British position and that
is where we would stand.
Q13 Mr Bacon: You said that, while technically
nothing was agreed until everything was agreed, nonetheless it
made sense to bank the stuff that had been agreed on if possible.
I take it that this is the negotiating acquis that the
presidency referred to, the stuff that has been banked? Is that
right?
Mr MacShane: We do the banking
in a sense. I do not want to go too deeply into another round
of European images and metaphors.
Q14 Mr Bacon: It is really a point of
clarification before I ask my question: what is the negotiating
acquis? Is it these 82 points that have been banked?
Mr MacShane: The 82 points of
consensus were in a presidency document. There is no draft treaty,
as such. There is the Giscard Convention text, the draft of the
constitutional treaty. There are then a series of presidency conclusions
and papers, all of which are published as open documents, but
nothing is spatchcocked together in the formal sense that we have
an amended treaty and then a composite motion where you come back
and amend a bit more of it. At the last intervention by the President,
Mr Berlusconi, on Saturday afternoon, he made the references to
unanimity in the areas that are certainly of important concern
to the UK and a number of other countries. We are publicly saying,
"We are banking these and when and if the IGC talks resume
we do not expect all of that to be reopened", but—this
is my caveat and I am sorry to have to repeat it—nothing
is finally agreed until we have, if we have, a final constitutional
treaty.
Q15 Mr Bacon: What you are saying is
that this phrase here in the presidency statement, a text supported
by a large majority of Member States which will henceforward be
considered as a negotiating acquis not open to further
discussion, is the thing that you just referred to that Mr Berlusconi
was talking about.
Mr MacShane: Have you the date
for that particular statement?
Q16 Mr Bacon: This is the "Declaration
of the Presidency" found at the presidency conclusions, page
30.
Mr MacShane: These are the presidency
conclusions that were published at different times. As each succeeding
negotiation took place, the presidency would say, "Here is
where we are today" and what Mr Berlusconi is saying is that
those are positions where we have reached consensus.
Q17 Mr Bacon: This is a text, so there
is a text.
Mr MacShane: Yes, but the texts
are already circulated in the Commons library.
Q18 Mr Bacon: What I am trying to get
to is this: are all Britain's red lines covered within what you
call the banked stuff, the negotiating acquis, or are there
some of them that are outside it?
Mr MacShane: The presidency conclusions,
as they were published during the autumn, did not cover for example
our wish to seek unanimity on tax and other areas. Those were
contained in Mr Berlusconi's oral declaration made to his fellow
heads of government at the end of the Council meeting on Saturday
afternoon.
Q19 Mr Bacon: This is dated 12 and 13
December and it says, "This difficult work resulted in a
text supported by a large majority of Member States." I am
simply trying to establish what that text says and whether Britain's
red lines are covered in it.
Mr MacShane: The text—
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