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Session 2003 - 04
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European Standing Committee B Debates

European Communities (Staff Regulations)

European Standing Committee B

Wednesday 23 June 2004

[Mr. Roger Gale in the Chair]

European Communities (Staff Regulations)

[Relevant Documents: European Union Document No. 15185/03, relating to staff regulations of officials of the European Communities; and European Union Document No. 6378/04, Commission Communication, Completing the reform mandate: Progress report and measures to be implemented in 2004.]

2 pm

The Chairman: Good afternoon, ladies and gentlemen. Hon. Members may remove their jackets if they wish. We have until 3 pm at the latest for questions to the Minister. I remind hon. Members that their questions should be succinct and asked one at a time. There should be ample opportunity for all hon. Members to ask questions. Given my experience of the ingenuity of my parliamentary colleagues, I gently remind hon. Members that this is not an opportunity to discuss the workings of the European Union or matters arising from the proposed European constitution. Those matters can and should be debated on the Floor of the House on another occasion.

2.1 pm

The Minister for Europe (Mr. Denis MacShane): The Government welcome the opportunity to debate the Commission's proposal to amend the European Union staff regulations. We believe that comprehensive reform of the staff regulations is vital for an enlarged EU. The reforms will promote merit, efficiency and staff development, and will deliver significant long-term savings in the EU budget. That is why we supported the adoption of the new staff regulations in March at the General Affairs Council.

I regret that we were unable to debate the regulations prior to that agreement. That was due to the tight time frame, as we made clear in a written statement to the House and in correspondence with the European Scrutiny Committee. I have been studying my predecessor's correspondence on the subject—it goes back some years—but this seems to be the first time that a debate could be organised.

The Council needed to agree the proposal in March in order to give the Commission sufficient time to put the necessary implementing regulations in place for accession on 1 May. Otherwise, new officials recruited from the accession states from 1 May would have joined the institutions under outdated terms and conditions, and we would have lost the opportunity to make significant savings in pension and pay.

Reform of the Commission's personnel policy was the third key priority of the Commission's ambitious administrative reform programme set out in its White

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Paper of March 2000. Since then, some of the personnel reforms, including the new training and appraisal procedures, were introduced under the existing regulations, but the majority of proposals could not be implemented without reform of the staff regulations. The process continues, as the Prime Minister made clear in the House earlier today. We will be asking the incoming President to sustain that drive, because during the 1980s and much of the 1990s—indeed, until the last three years—absolutely nothing was done to reform the administration of the regulations.

I am proud that Britain has been instrumental in driving forward the process of Commission reform, and the reform of the staff regulations. Following the resignation of the Santer Commission in 1999, it was the Prime Minister, in a statement to the House, who first called for root and branch reform of the Commission. The UK then circulated a paper of reform ideas to the Commission and other member states prior to the Berlin Council.

Many of our ideas were included in the Commission's White Paper on reform. Some were taken forward by the Commission in its original proposal to revise the staff regulations, which was published in April 2002. That brought many of the EU's outdated human resource provisions into line with best practice in the UK and other member states, but it left pay and pensions provisions relatively untouched. The continuation of so-called promotion guarantees meant that it did not deliver the merit-based career structure that we wanted. We thought that it put UK candidates for entry at policy level at an unfair disadvantage by restricting entry in respect of graduates with three-year degrees. We therefore had to go back to the negotiating table to ensure that UK objectives on reform and significant long-term savings in the EU's budget were met.

The political agreement of May 2003 represented an excellent outcome for the UK. That was reflected in the revised proposal put forward by the Commission in November, after agreement with the staff unions. The new package is designed to promote best practice in human resources, budget discipline and accountability. The pay and allowances system has been streamlined. The pay scales reflect the new linear grading system, with lower starting salaries, which means that new entrants cost less.

A new special levy will be introduced to replace the temporary contribution made by officials to pay for improved working conditions, European schools and so forth. That is now linked to and will offset what was called the methode, which is the annual mechanism adjusting pay, allowances and pensions—it will now be the AMAPAP—which guarantees annual pay increases. Again, we are dealing with technical stuff, but it is a substantial reform in the direction in which we want to move, so that careers are based on merit and are more open to British citizens and so that the European Commission can be more effective.

We have also secured vital changes to the pension scheme. An increase in the retirement age, the gradual abolition of the country weighting mechanism and

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reduced annual accrual rates will ensure significant long-term savings. That bites into the EU budget in the direction that we want. Actuarial evidence suggests that in real terms the measure will save more than euro 100 million a year by 2033. If my calculations are right, that means that some euro 3 trillion will not now be spent on very generous pensions, which means that the money can be released for more productive use and to develop the European Union's real interests. However, there will also be savings in the short term. Commission calculations suggest that there will be a cumulative saving of euro 187.3 million between 2003 and 2006. The pension reforms are consistent with the active ageing agenda agreed at Lisbon in 2000.

We have also played a key role in ensuring that the new regulations provide for career progression that is based on merit, and that recruitment will be fair and open. Promotion will no longer be guaranteed by quota. We have also preserved a level playing field for UK graduates. Our three-year degrees will continue to be accepted for entry to the first two management grades, alongside the four-year degrees from other member states. Furthermore, new entrants at management grades will not be required to hold three languages, despite pressure from some member states.

The overall package of reform of the staff regulations is a result of five years of hard work in negotiations in Brussels. The process has been difficult, tiring, nit-picking and painstaking, but it is crucial to take the time to get a satisfactory agreement that is acceptable to all member states and staff representatives in the institutions. The European Parliament, the Court of Auditors and the European Court of Justice were all fully consulted and gave their opinions, because without such buy-in, implementation would be impossible.

I reiterate the Government's view that the new staff regulations are essential to the Commission's effective functioning in the 21st century, not least in view of enlargement. The regulations will allow the Commission to work more efficiently, transparently and economically. We will continue to work with the Commission to ensure that this reform and all other areas of Commission reform are thoroughly implemented and are a success.

I regret the fact that, with the exception of my distinguished opposite number, the shadow Minister for Europe, and one or two of my hon. Friends, no hon. Members are present. I have read serious articles complaining about how the Commission is run and about whistleblowing. I have also read disgraceful, dishonest, mendacious and unfair attacks on the vice-president of the Commission, the right hon. Neil Kinnock, a former Member of the House, despite the fact that he has done more under the present mandate than anything that was achieved under the Commission from 1979 to 1997. We read lamentations and accusations in the wider press and hear demands that the House be consulted and that hon. Members be involved, but where are Conservative Members? I understand that the regulations are technical, but we are talking about taxpayers' money. It is a disgrace that not one Conservative Member other than my

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opposite number is here today. The next time that they start complaining about the Commission in the Chamber, on ''Newsnight'' or on the ''Today'' programme, I will simply say that there was a chance here today to hold the Commission to account through the Government's reform agenda, and they were absent.

Mr. Richard Spring (West Suffolk) (Con): It is a pleasure to see you in the Chair, Mr. Gale.

I have several questions to ask the Minister. I listened with interest to his latter remarks, but I recall that only a few days ago, in a Commons debate of considerable importance on European affairs, a considerable sparsity of Labour Members were willing to speak. Most who spoke did not support his line, so this is not the time to rant, which seems to be the way of Ministers on these occasions. It is inappropriate and unworthy of him to rant, but he is probably doing so because of the tie that he has been wearing this morning, which has made him rather boggle-eyed.

The information for the debate is admittedly vast, and it includes correspondence between Ministers and Committee Chairmen, European Scrutiny Committee reports, EU documents and explanatory memorandums. Only three of the documents are listed as recommended for debate, but the bundle contains 17 documents, if one includes background documents and those documents that are relevant in some way to the matters under consideration. There is a total of 510 pages, including a considerable amount of technical calculation and data. It is unhelpful that this full bundle was made available to Members and staff only last week in the Vote Office.

 
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Prepared 23 June 2004