9 Statute for Members of the European
Parliament
| (24341)
PE 324/184
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| Draft Report from the Committee on Legal Affairs and the Internal Market of the European Parliament
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| Legal base | Article 190(5) EC and Article 108(4) of the Treaty establishing the European Atomic Energy Community; approval by Council by QMV except in relation to taxation (unanimity)
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| Department | Foreign and Commonwealth Office
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| Basis of consideration | Minister's letter of 19 January 2004
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| Previous Committee Report | HC 63-xviii (2002-03), para 4 (9 April 2003), HC 63-xxiii (2002-03), para 7 (4 June 2003), HC 63-xxviii (2002-03), para 5 (2 July 2003), HC 63-xxxii, para 11 (17 September 2003)
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| To be discussed in Council | 26 January 2004
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
9.1 By virtue of Article 190(5) EC, the European Parliament, after
seeking an opinion from the Commission and acting with the approval
of the Council, may lay down regulations and general conditions
governing the performance of the duties of Members of the European
Parliament (MEPs). The Council acts by qualified majority when
giving its approval, but all rules or conditions relating to the
taxation of Members or former Members require unanimity.
9.2 We considered the current document on 9 April,
4 June, 2 July and 17 September.[23]
Our principal concern was over the provisions relating to the
privileges and immunities of MEPs, which seemed to be more extensive
than those which are currently enjoyed by MEPs under the Protocol
on Privileges and Immunities of the European Communities, and
we doubted that conferring an immunity from prosecution was a
matter falling within Article 190(5) EC.
9.3 In a letter of 9 September 2003 the Minister
for Europe assured us that the Government did not consider that
the powers conferred by Article 190(5)EC could properly be used
to adopt measures which, in effect, amended or repealed the provisions
of the Protocol on Privileges and Immunities of the European Communities.
9.4 We also noted that the proposed salary for a
Member of the European Parliament would be linked to that for
a judge of the European Court of Justice and would be 50% of such
salary. We thought this salary level was high, but we agreed that
it was sensible to tie the salary to the "Méthode",
i.e. the means used to calculate annual pay increases for officials
of the European Communities. We also noted that the Government
was content with the arrangement proposed for the taxation of
the salary of an MEP, whereby this would be subject to Community
taxation, but with an option allowing Member States to charge
additional tax to bring the rate of taxation up to national levels.
9.5 In relation to expenses, the Minister told us
on 28 March 2003 that a separate Regulation was being drafted
by the EP Bureau and would be based on the reimbursement of costs
actually incurred. The Minister told us that the Government would
prefer there to be an explicit recognition in the body of the
Statute itself that the expenses regime would be based on the
principle of reimbursing actual costs incurred.
9.6 The draft Statute provided for a pension age
of 60, with a pension accrual rate of 3.5%.[24]
The Minister explained that Members of the Westminster Parliament
and UK MEPs have a pension age of 65 with a 2.5% accrual rate.
The Minister also explained that the draft Statute provided for
the winding-up of the EP's own voluntary pension scheme which
MEPs can currently opt into.
9.7 We agreed with the Minister that the proposed
"grandfathering" provision was difficult to justify
. (This would allow existing MEPs to maintain the current ad
hoc arrangements, apart from expenses, for the duration of
their mandate.)
9.8 The Minister undertook to inform us when he had
further news of the negotiation of this proposal.
The EP resolution of 17 December 2003
9.9 The Minister informs us that on 17 December the
European Parliament adopted a resolution by 345 votes to 94 with
88 abstentions which amends the Statute in response to the views
which the Council had expressed in June. The Minister also supplies
us with a copy of the resolution.
9.10 The resolution makes a number of amendments
to the draft Statute and invites the Council to approve an overall
compromise containing such amendments. The resolution proposes
that in relation to that part of the Statute relating to "primary
law" Member States "should be asked to revise those
provisions of the Protocol on privileges and immunities of the
European Communities of 8 April 1965 which concern Members of
the European Parliament using the Statute adopted on 3 and 4 June
2003 as a model". In consequence Articles 4 to 8 and 38(2),
together with the corresponding recitals, would be deleted.
9.11 In relation to pensions, MEPs would become entitled
to a pension at the age of 63 (rather than 60 as in the previous
draft). With respect to taxation, Article 18 (which provides for
Community taxation) is amended to make clear that it is to be
without prejudice to the right of Member States to subject an
MEP's salary to national taxation, provided that any double taxation
is avoided.
9.12 The resolution also provides that the new rules
governing the reimbursement of MEPs' expenses are to enter into
force at the same time as the Statute.
The Government's view
9.13 In his letter of 19 January 2004 the Minister
for Europe (Mr Denis MacShane) informs us of further consideration
of the draft Statute by the European Parliament. The Minister
explains that the revised Statute would allow for Member States
to tax MEPs on the same basis as their constituents, provided
relief is given for the new Community tax. The pension age is
raised from 60 to 63. The Minister adds that the Council wanted
a pension age of 65, but that 63 is viewed as an acceptable
compromise.
9.14 On immunities and privileges the Minister
explains that the resolution removes all the objectionable elements
from the Statute, which aimed to revise primary legislation to
give MEPs wide-ranging privileges, and that instead it "asks"
the Council to revise the 1965 Protocol on Immunities and Privileges
using the June Statute as a model, but puts no obligation on the
Council to do so.
9.15 On expenses the Minister explains that
the resolution states that the reform of expenses will be implemented
with the Statute. The Minister additionally points out that the
Secretary-General of the European Parliament has stated in writing
that the rapporteur in the EP will table a resolution including
a reference to expenses reform in the preamble to the Statute.
9.16 The Minister makes the following overall assessment
of the changes:
"The revised Statute is not perfect. It allows
existing MEPs to keep their current terms and conditions for as
long as they remain in the Parliament ('grandfathering'). This
is not ideal, as the Committee has previously pointed out. It
is not however in our view a basis for rejecting the package:
if the package is a good one, then it is better for it to be implemented
in stages than not at all.
"The allowance for MEPs under the Statute is
more generous than we would have preferred. It will tie the MEPs'
salary to the Méthode, which we and the Committee have
previously agreed (Committee's decision of 9 April 2003) is a
sensible approach. But it sets it at 50% of that of an ECJ judge;
as we have previously noted, this seems rather high, especially
now that ECJ judges' salaries have recently been increased —
meaning that MEPs' salaries will work out as £9,051 or (at
the current exchange rate) £6,379 a month. Most MEPs however,
including our own, will be paying increased contributions to their
new pension scheme under Article 24 of the Statute text (the EP
has calculated the contribution each MEP must make as £1,531
or £1,079 per month) and in some cases social security, which
will offset this increase to some degree. It is also a flat salary,
without the opportunity to increase it by holding e.g. Ministerial
office: all MEPs will receive the same allowance. Nonetheless
we would prefer a smaller allowance, and we welcome the possibility
that some MEPs may propose an amendment to the Statute to lower
it. We will also see, as we move closer to the Council meeting
of 26 January, whether an effort on the Council's part to lower
the salary would have a chance of success, and if so we would
support it — provided that it would not break the fragile
consensus in the EP for the revised Statute and expenses reform.
"We had wanted explicit provision in the Statute
text making clear that national arrangements could apply for social
security purposes, but at any rate the text does not prevent this
— we intend to treat MEPs on the same basis as their constituents
for national insurance and social security purposes.
"The scope for further negotiation is however
extremely limited. Formally, the Council has only the right to
accept or reject. The unexpected EP majority in favour of the
Statute, though large, is fragile, and any attempt to rewrite
the terms of this deal substantively will probably cause it to
disappear.
"The EP has conceded on our and the Committees'
principal demands, omitting the unacceptable provisions on privileges
and immunities contained in the earlier version of the Statute,
raising the pension age, allowing for national taxation and undertaking
in their Resolution to implement reform of the expenses regime
in parallel with the Statute. A failure this time to reach agreement
with the EP on a revised package would make it unlikely that this
long-standing dossier will be resolved, or the expenses system
reformed, before the EP elections in June."
9.17 The Minister invites us to clear from scrutiny
the Statute as revised by the Resolution, before it comes before
the Council on 26 January. This would be on the basis that the
Government will take any realistic opportunity to secure a reduction
of the allowance for MEPs, "provided that this is possible
without wrecking the prospect of a deal" and that the Government
will make clear to the EP that it will expect the Parliament
to abide by its undertaking that the extra costs of the package
will be met from the EP's own budget, and therefore within the
administration expenditure (EC budget heading 5) accorded
to the EP by longstanding informal agreement with the Council.
The Minister adds that the Government will be pressing for an
earlier implementation date.
9.18 The Minister also explains that he had previously
expected that the Statute would need to come before the Council
one more time before it could be implemented, but that he is now
advised that assent at the General Affairs and External Relations
Council would allow the Parliament to adopt the Resolution without
returning to the Council a second time. The Minister understands
that Germany has indicated that it intends to oppose the revised
Statute, but that the majority of Member States remain in favour.
Conclusion
9.19 The revised draft Statute is a considerable
improvement which, among other beneficial changes, removes the
provisions on privileges and immunities which we considered to
be unjustifiable. We repeat that we are unpersuaded that such
a wide immunity from legal proceedings in an MEP's own Member
State, as was foreseen in the now deleted Articles 5 to 8 of the
draft Statute, could be justified, and we see no case for the
Council to give any kind of undertaking that Member States will
revisit the provisions of the 1965 Protocol in exchange for the
abandonment by the European Parliament of its proposals on privileges
and immunities.
9.20 We remain of the view that the proposed
salary is rather high and we welcome the Minister's undertaking
to take any realistic opportunity to secure a reduction.
9.21 We think that the linkage between the Statute
and the new Regulation on Members' expenses is essential, and
we welcome the undertaking given in the Resolution that the Statute
and the new Regulation are to enter into force at the same time.
9.22 We regret being given so little time to consider
the latest proposals from the European Parliament, but we acknowledge
that our principal concerns have now been met and that the forthcoming
Council meeting on 26 January offers the prospect of agreement
finally being reached on this matter. Having regard to the undertakings
given by the Minister in his letter to us, we are content to clear
the document from scrutiny, so that he may participate in an agreement
within the Council next week.
23 See headnote. Back
24
i.e. the entitlement to pension accrues at a rate of 3.5% of final
salary for every year of service. Back
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