Examination of Witnesses (Questions 1-19)
31 MARCH 2004
MR DENIS
MACSHANE
MP, MR SIMON
MANLEY, MR
TOM DREW
AND MR
ROB TINLINE
Q1 Chairman: Minister, colleagues, welcome
again to the European Scrutiny Committee. Today is going to be
a bit hectic for us all for a whole host of reasons. I understand
you have another meeting that you want to get away to as well
and we hope to let you go as soon as we can. We may be interrupted
by a vote in the House as well, I have just been told. Minister,
welcome.
Mr MacShane: Thank you, Chairman.
Q2 Chairman: Having reached a complete
stalemate in December, the European Council is now aiming to get
agreement by 18 June. How realistic is this?
Mr MacShane: I think it is realistic
because in essence the discussion about what we want as a new
rulebook for Europe, the Constitutional Treaty, has been going
on pretty much now for two and a half years through the Convention
process, through the IGC, which started under the Italian Presidency.
There was a blockage in December because four big countries felt
that they were not in a position to move to a compromise on one
part of it, which is the distribution of votes in Qualified Majority
Voting situations there seems to be movement on that. The Irish
are very, very skilful negotiators. Our position is very clear
from the White Paper, it has not changed. Our so-called "red
lines" and the "red lines" of other countries are
well understood. There is not a lot new to discuss, uncover or
think about. If the political will is there then I think an agreement
under the Irish Presidency is certainly possible.
Q3 Chairman: Minister, you will recall
the last time you were here the Prime Minister made a statement
on the floor of the House about things being in the bank and we
were not too sure whether they were in the bank or out of the
bank and the text from Mr Berlusconi muddied the water somewhat.
If we are confident that we are going to get agreement on 18 June,
is it fair for us to assume that there have been assurances that
what the Prime Minister thought was in the bank is still in the
bank and agreement will be reached more easily because of that?
Mr MacShane: I think when we published
the White Paper in September that was gone through with incredible
care. The Foreign Secretary ruined his summer holidays going through
it line by line by line. That was the definitive British position
and in essence it has not altered since then and our partners
understand that, just as we understand that some of them have
got very important points that they do not want to see in the
new Constitutional Treaty or they want to see included into it.
In that sense, the Irish understand that and Mr Ahern himself
certainly is very robust on maintaining unanimity in key areas
such as tax. He has to represent Irish national interests as well
as being the Presidency of the whole of the European Union. I
do not get a strong sense of people saying to us "Well, now
we have got some movement", not yet an agreement—Our
Spanish and Polish friends are very, very clear that it is not
yet an agreement, as it were. There may be a new government in
Spain but it still remains Spaniard and represents the Spanish
national interests. Our position also is fully appreciated.
Q4 Jim Marshall: Minister, you indicated
that you thought there had been some movement on the definition
of Qualified Majority Voting. Could you give an indication of
what the outcome of the formula is likely to be, whether it is
going to be the 50/55 per cent that we have heard about? If that
proves to be the case, what will be the UK's position on that?
Mr MacShane: I cannot, Chairman,
because I am not the Presidency. I am not being evasive but these
things are kept close to people's chests, and rightly so. It is
a discussion, a continuing negotiation. At all times you want
an equilibrium between efficiency so you can come to an agreement.
We certainly want that in areas like expanding the economy, opening
up protected markets, and if we do not have a European Union with
QMV then that cannot be achieved. It is necessary to keep the
balance between the rights of so-called small countries, not that
I really like that term, and the fact that there are big countries
that have big populations and are the major net payers to the
European Union budget. Population and cash contribution also brings
with it certain rights. I think everybody is looking for a formula
that is based around the idea of the double majority, so at each
stage you can say that there is a majority of the states and there
is a majority of the total population of the EU of 415 million.
There is also discussion on how big a so-called blocking minority
has to be. Forgive me, it is like a Rubik's Cube of different
permutations and I have to say, and I hope I am not in any way
being patronising, I can think of no better experts on the electoral
system, the voting system, than the Irish to find a way through
this maze to provide us with a solution that we can all accept.
Q5 Jim Marshall: Could I just go back
to what you said to the Chairman in response to his questions.
You referred to the new Spanish Government, but it has not taken
over responsibility yet. I presume that the Irish Presidency has
had informal discussions with them but since they do not take
over until towards the end of this month, is it, the end of April,
we are talking about a realistic timetable of about six or seven
weeks. Can it be done in that kind of timescale?
Mr MacShane: I believe so because
we are not starting de novo. The Spanish positions are
known. The new Spanish Government which will take office shortly
after Easter. There is a two week period after the election when
the Cortes assembles but because it is the holy week in Spain
next week that is a complete shut down week and I do not believe
it assembles until after Easter and there is then the swearing-in
process. Clearly the government that is currently there that was
defeated in the election is consulting with Mr Zapatero and what
our Spanish friends say is, "Yes, Spain wants to be positive
about coming to an agreement on the Constitutional Treaty but
please remember that we are still Spaniard and we still have Spanish
national interests to defend". I believe that even had the
existing government, the Partido Popular, won the election we
would still be where we are today. All the signals I was getting
were that Mr Schroeder had gone to see Mr Miller, the French and
German Governments were talking, the Spanish and Polish Governments,
and people were not going to leave the whole process blocked on
that issue of voting weight as it had become blocked in December.
Q6 Mr David: I have two questions. The
first question is how do you think all of this will play in the
run-up to the European Parliament elections on 10 June?
Mr MacShane: The European Parliament
elections are specific in each country. Here I am almost doing
a political commentary perhaps, but my friends in the Spanish
Socialist Party, and I do not think I am revealing any big confidence,
say "We have to be careful because we do not want to go into
our European Parliament elections with the Partido Popular that
has still got a very strong base and is a very efficient and effective
party, a very powerful organisation, saying `you elect the socialists
and they give away the tienda'", they give away the
Spanish shop. It is conscious in their minds. France has also
just gone through a bit of an electoral earthquake as well. I
think that each country will look at that very specifically. Certainly
earlier there was a lot of discussion by German conservative parties
that they would make the issue of Turkey joining the EU what they
call a "hot theme" of European Parliament elections.
As you know, there are a number of countries campaigning for a
referendum which includes Turkey in the question because they
want to keep Turkey out of the EU and this is often a rather sad
by-product if we go down this rather ridiculous referendum road.
Q7 Mr David: In other words, it makes
political sense for most governments in Europe to have the hoped
for agreement after the European Parliament elections?
Mr MacShane: The Council is set
to meet on 18 June and I think there will be a lot of discussion
but whether there will be white smoke before then I do not know.
I think European Parliament elections are important in their own
right and we need to send the best representatives of each party
with its own particular point of view to Strasbourg because the
one thing we have learned is that Strasbourg, the centre of the
European Parliament, does have an increasingly powerful role in
the European Union decisions, not least, of course, in deciding
the future President of the Commission which now is no longer
subject to an individual veto by any one national government.
Q8 Mr David: My second question is, you
mentioned the Commission and assuming that the big nut is cracked
as it were, —the issue of weighted votes-, do you see any
problematic areas as far as QMV is concerned or the number of
Commissioners?
Mr MacShane: The number of Commissioners,
of course, is not yet a settled issue. The Convention proposed
limiting it to 15 and I must say that I have every sympathy with
that perspective. Britain, as you know, would be willing to forego
a Commissioner, but equally there have been very strong representations,
again, by the smaller countries, and incoming countries, that
they want their man or their woman in Brussels. The one way round
it might be to maintain the Commission at 25 and have what is
called a rendezvous clause to revisit it and reduce it down again
when people actually understand, as I think they will come to
understand, that a Commission of 25, 26, 27, 28 is really rather
unwieldy.
Q9 Mr Tynan: Could I move from white
smoke to "red lines". To what extent have the UK "red
lines" been held?
Mr MacShane: I think that in all
the key areas outlined in paragraph 66 of the White Paper, and
I am happy to read this out to you. I tried to read it out on
the Today programme but Mr Humphries allowed me to get
through one or two of them before normal service was resumed.
Q10 Mr Tynan: Is that a long programme?
Mr MacShane: ". . . unanimity
remain for Treaty change . . . tax, social security, defence .
. . own resources . . .", I think all of those are accepted,
"key areas of criminal procedural law". There have been
lurid stories about trial by jury and the rest of it going out
the window. There was a lot of excitement last week because I
mentioned the European arrest warrant and the papers said "Ah,
they are conceding on that". That was agreed two years ago.
In fact, it is a very good proposal to help tackle serious crime
and terrorism. It is not Britain that is blocking it, Italy is
one of the countries at the moment that is unhappy about this
and I hope Italian minds will be changed.
Q11 Mr Tynan: There has been considerable
discussion within this Committee as regards the "red line"
issues and some confusion because of the position of Mr Berlusconi
when the IGC broke up. Is it still true to say that the "red
line" has been held over issues such as indirect tax and
social security when aspects of these can be adopted by QMV under
the proposed Treaty?
Mr MacShane: On taxation, people
right across the board, it is not just a British "red line",
other countries want the relationship between citizen and government
which is defined by taxation more than anything else, it is the
power we have as MPs to take money out of people's pockets legally,
to be a matter of national decision making and I do not think
there is any serious pressure to change that.
Q12 Mr Tynan: So social security, as
far as you are concerned, no doubt at all it remains a "red
line" issue?
Mr MacShane: Yes, because it makes
sense. Each country has got such different social security systems
and the notion that these could be set or decided upon in Brussels
does not make sense to us and it does not make sense to a lot
of other countries as well. I really wish it were possible to
persuade the public that it is not just Britain that has got so-called
"red lines" but other nations, other proud sovereign
independent nations, are also determined to maintain areas of
decision making in Europe that have to be arrived at by unanimity
or, if you want to put it negatively, each country has its own
veto.
Q13 Mr Tynan: Social security will be
done by unanimity. Indirect tax?
Mr MacShane: If by indirect tax
you mean VAT, for example, there is a common European ruling on
that but even that has been shown to be flexible in that the French
I believe, and I turn to my two experts, have been successful
in persuading for a reduction of VAT on restaurants to the same
level as McDonald's and other fast food outlets. On the core issues
of income and corporation tax, the things that really count, unanimity
is being maintained.
Q14 Mr Heathcoat-Amory: Minister, on
social security there is, as you know, an Article III-21 in the
draft text which allows majority voting on social security for
migrant workers and that would obviously be a breach of the "red
lines" as you have mentioned and has to be changed. The Presidency
amendments which were tabled in Rome do not remove that majority
voting, they simply water it down by ensuring that nothing infringes
the fundamental principles of a Member State's social security
system, so even with that amendment it would still be a clear
breach of the "red lines". I am slightly surprised that
we got that far with the Presidency proposals on top of the draft
Constitution without removing the social security provisions which
breach the "red lines". Can you assure us that the whole
of Article III-21 has to go?
Mr MacShane: Mr Heathcoat-Amory
makes a very, very fair point. That is where we got to in negotiations
as of November-ish last year. Our White Paper position is absolutely
clear, that it has to go. Social security is something where we
think, and not just from a British point of view but for the sake
of all Europe, because the social security systems vary so enormously
country to country any change there has to be done by unanimity
so it stays within the remit of national government.
Q15 Mr Heathcoat-Amory: Can I mention
another "red line" which is the compulsory co-ordination
of economic and employment policies which is outlined in Article
14 of the draft Constitution. Again, the White Paper was adamant.
Paragraph 74 of the White Paper referring to the institutional
balance of economic policy and co-ordination says: "The Government
will oppose any such proposals which might lead to unnecessary
rigidities . . ." I take it from that that is a "red
line" issue, Article 14, but again I am very surprised that
the Presidency proposals tabled by the Italians did not mention
Article 14 at all. Although a lot of other countries' "red
line" issues have been addressed the Government appears to
have gone silent on Article 14 which would, of course, be an attack
on our own ability to manage our own economic and employment affairs.
Could you assure the Committee that that is still a "red
line" issue, that the absence of an Italian Presidency proposal
does not mean that we accept Article 14 and, indeed, that one
has to come out to conform with your "red line" promises?
Mr MacShane: Again, Chairman,
I agree with Mr Heathcoat-Amory but it is not that the Government
has been silent, we have got 14 other countries saying exactly
the same thing.
Q16 Mr Heathcoat-Amory: Why was it not
in the Presidency proposals?
Mr MacShane: That is a perfectly
fair point. The Presidency has got to deal with 15 ECOFIN ministers,
very, very strong, determined gentlemen, and I find ministers
of finance in every European country the most terrifying beasts
of the jungle, who have said in terms that this is unacceptable.
You are quite right to say it was not in where the Italians had
got to and I think had we been able to continue negotiating on
it in December a lot of this would be clearer but we stopped where
we stopped at the European Council and ECOFIN, the 15 European
finance ministers, have said it has got to go, so it is not just
a British voice, it is 14 other countries saying exactly the same
thing.
Q17 Mr Heathcoat-Amory: Could I ask one
final point about so-called "wiggle room" on criminal
justice procedures. This is something the Government has been
adamant about, that our court proceedings, the rules of evidence,
the rights of people in court proceedings, none of that could
ever be subjected to majority voting and, indeed, amendments were
tabled by the Europe Minister at the time in the Convention to
remove those whole articles. We now hear there is some wiggle
room on that which makes us a little bit alarmed that because
of the recent bombing maybe that "red line" is becoming
a pink line. Can you again assure us that the White Paper proposals
maintain their potency?
Mr MacShane: I am not too sure
about all the colour co-ordination metaphors. I do not know where
this term "wiggle" has come from.
Q18 Mr Heathcoat-Amory: A Government
spokesman.
Mr MacShane: Ah, one of those.
I am a Government Minister and I would not use that language.
I had better be careful what I say.
Q19 Mr Tynan: Just wiggle a little!
Mr MacShane: We are insisting
on unanimity for key areas of criminal procedural law, things
that matter to us. I think the Prime Minister made that very,
very clear in the House on Monday. I am very happy to go downstairs
and get Hansard and read it very slowly into the record
of the Committee.
Chairman: If you can do it in 15 minutes
that will be fine, Minister.
The Committee suspended from 2.21pm to 2.41pm
for a division in the House.
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