3 The Financial Perspective 2007-13
| (25367)
6232/04
COM(04) 101
| Commission Communication: Building our common future: Policy challenges and Budgetary means of the Enlarged Union 2007-2013
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| Legal base | —
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| Department | HM Treasury
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| Basis of consideration | Minister's response of 28 May 2004
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| Previous Committee Report | HC 42-xv (2003-04) (24 March 2004)
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| To be discussed in Council | March-June 2004
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| Committee's assessment | Politically important
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| Committee's decision | For debate on the Floor of the House (decision reported on 24 March 2004)
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Background
3.1 In March 2004 we reported on a Commission Communication containing
proposals for the next Financial Perspective. We said:
"The new Financial Perspective for the EU will determine
the overall revenue and expenditure of the EU and the expenditure
on each category of EU activity for the seven years from 2007
to 2013. It will also largely determine the net contribution
to the EU of each Member State, and the future of the UK's budget
rebate. It will in practice be binding on the parties to it for
those seven years. It is therefore one of the most crucial forthcoming
EU decisions, with important consequences for enlargement and
the draft constitutional treaty."
We recommended the document for debate on the Floor of the House
together with the Commission's Communication on reform of regional
and cohesion funding, which we reported on at the same time.[5]
3.2 We asked the Government to let us have its views on nine points
on the Communication on the new Financial Perspective in time
for the recommended debate.
The Minister's response
3.3 The Paymaster General (Dawn Primarolo) has now responded on
each of the points and we reproduce her comments in full:
THE COMMISSION'S PRESUMPTION ABOUT THE CONTENT OF THE PROPOSED
CONSTITUTIONAL TREATY, PARTICULARLY IN RELATION TO THE ACTIVE
PROMOTION OF RIGHTS UNDER THE CHARTER OF FUNDAMENTAL RIGHTS
"The Commission's Communication refers to the period 2007-2013.
If the constitutional treaty is concluded under the Irish Presidency
and then ratified by national parliaments, it is likely to come
into force in 2007 or 2008. The Commission has made assumptions
about the content of the Treaty based on current negotiating drafts,
so as to address the issue of financing proposals for the same
period.
"As the Committee is aware, the Convention on
the Future of Europe proposed that the Charter of Fundamental
Rights should be incorporated into the constitutional treaty.
The Commission has drafted its Communication on the basis of
the then current draft of the constitutional treaty, which included
the Charter as Part II. It is important to note that Title VII
of the Charter, as amended, contains significant general provisions
governing the interpretation and application of the Charter.
In particular, Article 51(1) stipulates that 'This Charter
does not extend the scope of application of Union law beyond the
powers of the Union or establish any new power or task or the
Union, or modify powers and tasks defined by the other Parts of
the Constitution'.
"The Government will not take a final view on
the incorporation of the Charter until it is clear what the overall
final proposals are for a constitutional treaty."
THE PRESUMPTION THAT THERE WILL BE A EUROPEAN BORDER
GUARD CORPS
"The Commission Communication states that a
key objective in the area of freedom, security and justice is
the European Border Agency to pave the way for the creation of
a European Border Guard Corps with adequate means to execute tasks
of surveillance and border control in support of national authorities.
"However, as presented in the November 2003
Regulation the UK Government does not support the idea of a European
Border Guard. The case for creating a fully-fledged multi-national
border guard has not been made. Whilst there is much to be gained
from co-ordinated management of the EU's external borders, Member
States must remain responsible for their own borders."
THE COMMISSION'S INTENTION TO PROMOTE "THE POLITICAL
CONCEPT OF EUROPEAN CITIZENSHIP".
"The EU can best promote itself and the value
of EU citizenship through the benefits that the EU brings to its
citizens. Accordingly, the Government welcomes practical measures
that enhance the contribution the EU can bring to creating an
area of freedom, security and justice.
"However, the Government continues to have reservations
about substantial EU funding being directed towards promoting
the political concept of 'European citizenship'."
THE COMMISSION DEVELOPING A DISASTER RESPONSE CAPACITY.
"Disasters within the EU: the role of the Commission
has been increasing since the early 1990s. The Community Action
Programme in the field of Civil Protection (2000-2004) provides
the direction and strategy. The Solidarity Fund created in 2002
provides financial assistance to people, regions and countries
hit by major disasters. In 2002, the Commission set up a new
programme to facilitate co-operation between Member States on
preparation, detection and measures to reduce the consequences
of chemical, biological, radiological, or nuclear (CBRN) incidents
or terrorists attacks inside the EU.
"When hit by a major disaster, Member States
or third countries can request assistance through the Commission's
Monitoring and Information Centre. Any requests are immediately
forwarded to all participating countries — drawing on a
database of personnel and equipment available — and the
Centre compiles the responses. The release of assets by participating
Member States is voluntary. The Commission itself does not own
any civil protection assets: its role is purely to facilitate
contact between the affected country and potential sources of
assistance.
"At present, the beneficiary country bears any
cost involved in receiving civil protection assistance. The Commission
has recently proposed greater common financial input in a Communication
on reinforcing the Civil Protection Capacity of the European Union.
This will be the subject of an Explanatory Memorandum shortly.
"The Government strongly supports international
co-operation to help supplement and strengthen national Civil
Protection efforts. But it would consider any proposals to enhance
the Community's civil protection capacity carefully, to ensure
the right balance between action at the national and Community
levels without compromising national resilience and minimising
additional financial costs.
"External Disasters: It is important that the
EU's actions add value to the collective international effort,
and avoid duplication with bodies such as UN OCHA [UN Office for
the Coordination of Humanitarian Affairs] or the Red Cross societies.
To this end the UK is working with like-minded partners to improve
co-ordination between the relevant donor and relief agencies."
THE RELATIONSHIP OF A NEAR NEIGHBOURHOOD POLICY TO
THE POLICY OF FOCUSSING DEVELOPMENT ASSISTANCE MORE ON POVERTY
ERADICATION IN THE WORLD'S MOST DISADVANTAGED COUNTRIES.
"The Near Neighbourhood Instrument proposed
in the Commission's Communication is aimed at a narrowly defined
set of partner countries. The Government believes this facility
should be limited in scope and budget, sharply focussed on achieving
cross-border objectives.
"The EU's near neighbours could also draw on
development assistance from the global economic co-operation and
development budget, which the Government believes should absorb
the lion's share of the Global Europe (currently 'external actions')
heading. The main purpose of the 'Economic Co-operation and Development'
instrument would be to reduce poverty in developing countries
in pursuit of the Millennium Development Goals (MDGs), with resources
allocated according to policy performance, and need (levels of
poverty)."
THE PROPOSAL FOR A SINGLE EXTERNAL REPRESENTATION
ON TRADE, FINANCE AND "NORMS SETTING" AND A UNIFIED
PRESENCE IN THE WORLD BANK, IMF AND UN ECONOMIC AGENCIES.
"The Government cannot accept the Commission's
suggestion for a single external representative on trade, finance
and 'norms setting'; nor for a unified EU presence in the World
Bank, IMF and UN agencies. Given the shareholder nature of the
International Financial Institutions, and the fact that Member
States have diverse approaches and varying roles due to cultural,
economic and historical factors, the Government believes that
the Commission's suggestion in this area is neither desirable
nor realistic."
"BUDGETISATION" OF THE EUROPEAN DEVELOPMENT
FUND . . .
"The European Development Fund is currently
off budget, with contributions negotiated separately from the
Financial Perspective. The Commission and European Parliament
argue that EDF budgetisation would make EC development assistance
more effective, by bringing all development assistance under a
single structure governed by the Financial Regulation. Member
States are examining the Commission's suggestion to integrate
the EDF into the EC budget. No decision is expected or required
until the end of 2004. In the interim, the Commission is making
the preparations necessary to pursue either EDF Budgetisation
[or] negotiation of a 10th replenishment of the EDF,
without prejudice to Member States' decision.
"The Government opposes EDF budgetisation on
grounds of cost, effectiveness, poverty focus and the political
relationship with the ACP [African, Caribbean and Pacific group
of countries] and OCT [overseas countries and territories]. In
the Government's view, integrating the EDF with the current unreformed
budget structure would further reduce the poverty focus and effectiveness
of EC development assistance. The UK's financing share of EDF
is 12.7%, compared to a 19% share of the EU budget. The government
would only consider EDF budgetisation in the context of a much
reformed external budget, where effectiveness and poverty focus
approached the levels of UK bilateral spending and where the current
nature of the relationship with the ACP and OCT is secured."
THE COMMISSION'S IDENTIFICATION OF "A NEED FOR
INCREASED SECURITY-RELATED RESEARCH" TO STRENGTHEN MILITARY
CAPABILITIES.
"The Commission sees its work on security research
as a contribution to wider EU work on the European Security Strategy,
the Barcelona objectives on research and technology, and the 'EU
initiative for growth'.
"The Government believes the Commission should
limit its work to those areas of civilian security research that
fall under its competence. The issues are set out in more detail
in FCO Explanatory Memorandum on the Commission Communication
on its Preparatory Action on Security Research (COM (2004) 72
final)."[6]
THE COMMISSION'S APPARENT OMISSION OF THE PRIVATE
SECTOR AS REGARDS ALTERNATIVES TO IN-HOUSE DIRECT MANAGEMENT OF
PROGRAMMES.
"The Commission has a policy on externalisation,
including the option of outsourcing to the private sector, which
dates from the White Paper on Reform of 1 March 2000. Action
17 of this White Paper required the Commission to define a policy
on externalisation of tasks and the proposed methods by which
this could be carried out. The policy was defined in the Commission's
Communication on Externalisation (COM(2000)788 final, dated 13
December 2000 — EM submitted on 11 March 2001),[7]
which proposed three types of externalisation: (i) devolution
to a new type of executive agency; (ii) decentralisation to networks
of national agencies; and (iii) outsourcing via contracts with
the private sector."
Conclusion
3.4 We are grateful to the Minister for these
comments. We note that on some points the Government is robustly
opposed to the ideas in the Commission's Communication. On others
its views are more nuanced and sometimes relatively supportive
of the Commission.
3.5 We recognise that the major focus of the Government's
approach to the next Financial Perspective must be on the overall
funds and the major areas of expenditure, such as agriculture,
cohesion and development assistance. But we are conscious that
many of the proposals we scrutinise are for comparatively small
levels of expenditure, where we are not always fully convinced
of the need for Community activity and suspect there is less than
rigorous assessment of value for money. Collectively these minor
activities may well add significantly to the overall size of the
Community budget (as well as creating a presumption of the inevitability
of future expansion of an activity). We suggest that Members
might like to explore in the debate the scope for the Commission
being induced rigorously to appraise and prune existing activities
before seeking increased expenditure elsewhere in the Financial
Perspective.
5 (25423) - : see HC 42-xv (2003-04) (24 March 2004). Back
6
(25352) 6092/04: see HC 42-xii (2003-04), para 5 (10 March 2004). Back
7
(22051) 5314/01 and (23389) 7644/02: see HC 152-xxxi (2001-02),
para 5 (22 May 2002), and (23389) 7644/02: see HC 152-xxxvi (2001-02),
para 15 (25 July 2002). Back
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