Examination of Witnesses (Questions 153-159)
MR DOUGLAS
ALEXANDER MP, MR
ANTHONY SMITH
AND MR
SIMON MANLEY
3 MAY 2006
Q153 Chairman: Good afternoon everybody.
Douglas, thank you for coming along today and agreeing to discuss
the European Union in general. We have got quite a big agenda
that we want to touch on. I would like to begin by going back
to the British Presidency and asking you to give an assessment
of how you think it worked out in the end and what the achievements
were and what the failures were.
Mr Alexander: Firstly, can I say
it is a pleasure to be with the Foreign Affairs Committee. Perhaps
I could just in the briefest sense introduce Simon Manley, who
has served as Head of Economic/Central Europe within the Foreign
Office, and Anthony Smith, who is our Director of European and
Political Affairs. With your permission, Chairman, at appropriate
points in the course of the evidence I may call on them for support.
Reflecting back on the Presidency now just over four months since
its conclusion, I would essentially begin at the beginning: what
did we inherit? We inherited a Europe that was divided on the
issue of the European budget after the June European Council under
the Luxembourg Presidency, a Europe that was still coming to terms
with the scale and significance of the rejection of the Draft
Constitutional Treaty by voters respectively in France and in
the Netherlands, and a Europe that was under an obligation, agreed
previously at a European Council in December 2004, to open accession
talks with Turkey on 3 October. The circumstance dictated that
we had a fairly challenging agenda. If we take each of those issues
in turn, I would argue that in what was ultimately agreed among
the heads of government at the December European Council and what
is now being followed through in the institutional process, we
achieved what many regarded as being very unlikely, which was
to find the common ground and consensus on the issue of the European
budget, a matter I am sure you will wish to question me over this
afternoon. On the issue of the broader constitutional future of
Europe, given the rejection of the Draft Constitutional Treaty,
I think there was clearly a consensus back in the June Council
of 2005 that there needed to be a period of reflection. We began
our Presidency, as was made clear by the speech that the Prime
Minister gave before the European Parliament on the eve of the
Presidency, determined that the period of reflection would not
be seen as a period of stagnation and that it was important to
understand not simply the text and the judgment that the people
in France and the Netherlands had reached on the text but also
the broader context. That explains why we chose to use the informal
heads of government meeting in Hampton Court in October to focus
on those broader questions establishing in its broadest sense
the challenges that Europe faced, embracing the very significant
pressures of globalisation bearing down on the European Union
and the European continent. I think, as was already manifest in
the Spring Council of the Austrian Presidency, Hampton Court proved
impressive both in some of the issues it addressed and the added
impetus it gave to key areas of policy work of the European Union.
There was the important and delicate work of securing the opening
of accession talks with Turkey on 3 October. It is no secret that
I came to the Europe job immediately after the election so it
was my first exposure to negotiations of that sort. I have to
say I learned a great deal working closely with Jack Straw in
the course of September, the weeks immediately preceding the 3
October deal, and it is honest to say that there were various
points, both in the preceding weeks and the preceding hours, where
the barriers at times seemed insuperable. In that sense it turned
out to be a negotiation that went literally down to the wire and
the claim that the accession talks began on 3 October was achieved
by using Greenwich Mean Time rather than Luxembourg time where
the negotiations were taking place. I think by almost any standard
the achievement of the opening of accession talks was adjudged
to be of historic significance and is therefore one of the other
elements of which we are very proud in the course of the Presidency.
Along with those specific challenges that were dictated to us
by circumstance, there were of course dossiers and areas of work
which we inherited from the Luxembourg Presidency and that we
were keen to see progress on, areas for example such as better
regulation, advancing the Lisbon Agenda, and the other areas of
work which no doubt we will have the opportunity to cover in the
course of this afternoon's session. I would reflect on those six
months of the British Presidency as being six months during which
we did make solid and in some cases substantial achievements against
a set of circumstance which did not appear propitious when we
inherited the Presidency in July.
Q154 Chairman: I recall being in
the European Parliament on 4 October and in fact you were not
able to come and speak to us at that time because you were still
in the early hours doing the deal. As a Committee we have travelled
quite a bit earlier this year and certainly when we were in Warsaw
we got from the Polish parliamentarians a sense of some irritation,
I think is probably the best way of describing it. There was a
sense perhaps that they had bigger expectations of the British
Presidency being more congenial to the newer Member States and
they seemed to have some sense of disappointment. I would be interested
in your take on how other Member States saw the outcome. Was our
standing improved, was it raised as a result of the budget deal
or Turkey, or did actually we in the process have to do things
which meant we came out of it not as at the centre of Europe as
we might have wanted to be? There was some press comment about
that as well in some articles. It would be interesting to hear
your take on that.
Mr Alexander: Perhaps as the British
Government Minister for Europe I am not the best person to offer
an objective judgment on how others perceive our efforts. With
the greatest of respect to our colleagues in the third estate,
I do not take the metric of our success as being how some of the
British newspapers report our performance. I think it is right
to recognise that particularly amongst the new accession countries,
the A10, there was a high level of concern after the failure to
reach agreement on the future financing deal back in June under
the Luxembourg Presidency and that concern continued in the course
of the British Presidency. Again, there is something of a parallel
here with the progress of negotiations on Turkey. I read with
interest the evidence that Charles Grant gave before your Committee
on the issue of the Turkish negotiations saying that there was
some irritation amongst new Member States' foreign ministers (such
as Poland) that there was not a greater level of consultation.
During the 30 hours that we spent in Luxembourg I would simply
say that it reflects well, I believe, on the experience and judgment
of the Foreign Secretary how managed the paper flow was during
those very delicate hours. Speaking candidly on the basis of the
success that was achieved, I genuinely believe that had there
been a more open process by which every iteration of papers was
shared with every European foreign minister almost at any point
preceding the final hours of negotiations, I would not be able
to celebrate the fact that the opening of accession talks with
Turkey was achieved on 3 October. The reason I cite that example
was also it was a judgment to go late in terms of the future financing
negotiations. That partly reflects the fact that the June European
Council, which I attended, certainly manifested division and came
close at times to manifesting animus. I think it was right to
have a period immediately following the failure of the Luxembourg
Presidency to secure agreement to have a pause during which officials
such as Simon and others from the Treasury engaged in a detailed
and unglamorous, but nonetheless ultimately important, task of
speaking bilaterally to each of the other 24 members, indeed 26
including Bulgaria and Romania, to establish what were the parameters
and the ground on which a deal could potentially be struck. That
process continued through the autumn. On reflection, Hampton Court
played a useful role in again giving a greater degree of commonalty
of view as to the challenges that Europe faced in the future.
Had we followed conventional orthodoxy and tabled Presidency proposals
on the future financing very early in our Presidency, I am not
convinced it would have made it any more likely that we would
have succeeded. There is one issue in terms of other Member States
in terms of the tactics that we deployed in terms of negotiation.
Ultimately, the real test is not the tactics but the outcome and
in that sense both on Turkey and on the budget I feel there has
been a vindication by results. In terms of other aspects of our
relationships with Eastern Europe, certainly the scale of funds
that have been committed, the broad transfer of resource from
west to east, has been achieved under the British Presidency proposals
that were agreed. The consensus was secured back in December.
Of course, these negotiations are inherently difficult. Every
country is seeking to defend its national interests and every
country is prone to see the negotiations simply in terms of a
zero sum game. In that sense, rather akin to coming into government,
you do not enter government simply to win the popularity stakes;
you enter government to try and achieve important undertakings
and I think there is a parallel there with the European Union.
Q155 Ms Stuart: Can I take you back
to the budget. I am interested in what you said about tactics
and the tactics being justified by the outcome, but was not part
of the problem that there were 24 Member States who said the British
must give up their rebate and for a very long moment we said it
was non-negotiable and then we did give up the rebate?
Mr Alexander: Non-negotiable,
as I recollect, was never language I used as the Europe Minister.
We did claim that the rebate was justified on the basis of the
prior anomaly, the fact of the structure of the European budget,
both in terms of net receipts to the United Kingdom and also the
continuing existence of the Common Agricultural Policy, we argued
strongly and continue to argue and make the case for a British
rebate. Of course, there was a focus, not least in the British
papers, on the issue of the rebate, but I would point out that
in June prior to the British Presidency it was not, as some would
have you believe, the United Kingdom standing alone against a
broad consensus of the European Union. There were five Member
States who were unable to accept the Luxembourg proposals, but
the consequence of the final proposals that were tabled by the
Luxembourg Presidency late in the night in June was that the bar
was set pretty high for both our politicians and our diplomats
to argue that there should be a fundamentally different basis
on which agreement should be reached. Essentially the previous
Presidency proposals had involved a very significant contribution
of funds in the context of a larger budget being contributed by
the United Kingdom, although there was a significant share on
the basis of radical changes to the rebate. As a consequence of
that, part of our endeavours in the months following the failure
to reach agreement in June was both to explain the correlation
and the linkage between the abatement and the reason why the abatement
came into existence, but equally to argue—and the Prime
Minister was very clear on that as early as that speech he made
before the Europe Parliament—that all the time he recognised
we had a responsibility to make a fair contribution towards the
costs of enlargement. I think that reflects the final settlement
that we reached in December.
Q156 Ms Stuart: There is a counter-argument
that we should have put CAP reform on the table about two years
before our Presidency and we could have negotiated earlier but
that is as may be. Has agreement been reached now about what the
size of the budget is between the Budget Commissioner and the
European Parliament?
Mr Alexander: Let me come to your
first point in terms of the CAP and then I will come on to the
reported comments of the Budget Commissioner. Again there is a
judgment to be reached in terms of how best to effect the scale
of reform that certainly we in the United Kingdom would like to
see in relation to the Common Agricultural Policy. It was clear
that we would not be able to secure the consensus that ideally
I would have wished to see, which would have been for more radical
reform of the Common Agricultural Policy. Undoubtedly, under Margaret
Beckett's stewardship we did see significant progress on the sugar
regime, which was one of the most anomalous aspects of the Common
Agricultural Policy. I would argue that the achievement in relation
to fundamental reform was not the final word but rather a platform
on which those of us who remain committed to seeing fundamental
reform of agriculture can build. The establishment of the review
for 2008-09, which will look at all aspects of how the European
Union raises its resources and then allocates them, provides us
with a real opportunity in the course of the Presidency. There
was a British Government paper tabled at the beginning of December
which argued for the kind of agricultural policy that we would
like to see Europe have in the future. I intend to make a speech
in the weeks to come in Berlin on exactly that issue. It is an
issue that we will continue to work and argue the case for but
we have to secure the support of allies in that endeavour. That
partly reflects the importance we attached not simply to the policy
benefits of economic development in Eastern Europe which would
be secured through the budget deal but also in terms of those
countries in Eastern Europe which we would regard as being potentially
natural allies in the cause of reform not just on agriculture
but more generally in the European Union. I think it would have
been contrary to our national interest to lose that potential
alliance for reform within the Union by prejudicing their ability
to access European funds, which of course is a very central focus
of their concern at the moment. In terms of the reported comments
of the Budget Commissioner, we are clear that the budget set out
in the IIA will amount to €864 billion. We did not recognise,
and, as you can imagine, when it was brought to my attention I
tasked my officials very quickly to establish the basis on which
our colleague in the Commission had come up with this figure of
€900 billion. Frankly, we do not regard that as an accurate
reflection of the budget. Our best efforts within the Foreign
Office and speaking with colleagues in the Treasury to at least
understand the basis on which this figure emerged, reflects, in
our judgment, an attempt to say that certain items which have
never been part of the main European budget, principally the European
Development Fund, which I understand is €19.9 billion for
the period 2008-13, should be added on to the European Budget.
Other aspects—the annual flexibility instrument, the Solidarity
Fund and the Emergency Aid Reserve—which no British Government,
indeed the European Union itself has regarded at any point in
any terms of our discussions either bilaterally with other Member
States or indeed with the Commission as being part of the European
budget as being lumped together in order to try reach a figure
as high as €900 billion.
Q157 Ms Stuart: Finally, you seem
quite hopeful about the reviewing process by the Commission on
the budget. If during those discussions in 2007-08 it was put
on the table that the only way would be for the EU to raise its
own resources, what would the British Government's position be
on that?
Mr Alexander: We have long argued
that taxation is a matter for Member States rather than for the
European Union. I know there was flurry of publicity at the turn
of the year, there were certain reported comments, if I recollect,
from the Austrian Chancellor, but we have not changed our position
during the Presidency or post the Presidency. As a matter of principle
we regard taxation as a competence of Member States.
Q158 Sir John Stanley: Minister,
perhaps I could turn to a housekeeping bit of the EU budget, one
directly relevant to the Foreign and Commonwealth Office. I expect
your attention was drawn to the extended piece in The Sunday
Times of 23 April under the heading "High Life of the
EU `stealth ambassadors'". It drew attention to the rising
and substantial expenditure of EU taxpayers' money on the provision
of ambassadorial residences for EU ambassadors. It says: "Houses
are part of a growing property portfolio, housing a cadre of ambassadors
who include Tim Clarke, the brother of the Home Secretary and
John Bruton the former Irish Prime Minister . . ." and it
refers to the fact that there are now apparently 122 EU ambassadorial
residences. Mr Bruton's 16-bedroomed mansion in Washington is
featured and Tim Clarke's accommodation in Addis Ababa is described
as "a splendid residence. The grounds can easily take 300
to 400 people." The question I would like to put to you is
what degree of control is being exercised by our Foreign Office
and our Foreign Secretary and our Foreign Office ministers about
this burgeoning expenditure? As you are well aware, in this Committee
we are taking a very close interest in the regrettable reductions
of ambassadorial posts and ambassadorial residences as far as
the United Kingdom is concerned, and it certainly goes against
the grain, as far as I am concerned and perhaps for other members
of the Committee, to see this huge expansion of both ambassadorial
positions and ambassadorial residences by the EU.
Mr Alexander: Firstly let me say
I think it is something of a misnomer to describe these as ambassadorial
residences and these individuals as ambassadors. It raises of
course the question of the European External Action Service and
we are very clear that the European External Action Service cannot
come into effect without a Constitutional Treaty which would provide
it with a legal base. Indeed, a European Foreign Minister was
anticipated as part of the Constitutional Treaty. Given the status
of the Constitutional Treaty at the moment that is not where we
are. My understanding in terms of John Bruton—and indeed
I cannot deal with all of the individuals, but many of the individuals
that I am sure the piece reflects are Commission representatives.
Do I believe that there is a role for having Commission representatives
working internationally? Yes, I do accept that there is a role
for the European Commission to be represented internationally
in certain locations, but that raises an important question both
of efficiency and of principle, which is do we in perpetuity hold
on to a clear distinction between the Council of Minister and
the European Commission. I have argued very strongly within the
Foreign Office and elsewhere that it is important that we maintain
clarity as to those inter-governmental aspects, CFSP, where it
is appropriate for the Council of Minister to be represented discretely
and separately from the European Commission. On the other hand,
there is one particular case (which has been the subject of discussions
with other committees in the House) where I am sensitive on the
grounds of efficiency as to avoiding a situation in the Former
Yugoslav Republic of Macedonia of having an effective duplication
of exactly the kind of residences and support infrastructure that
the piece describes. In that sense I think it is an area where
we do continue to examine the matter closely. I will take back
the point that you have raised both for myself and also for the
Foreign Secretary, but it is important to recognise that there
is both Commission competence in certain areas of work and discretely
and appropriately separate areas of responsibility for the Council
of Ministers.
Q159 Sir John Stanley: Minister,
may I say how absolutely delighted I was, you are the first Minister
in my experience on this Committee either under this Government
or under the previous Conservative Government who has been willing
to describe the term "EU ambassador" as misleading.
I am delighted you have used that description, which is one I
would entirely share as of course the EU is not a national state
or a national entity. Perhaps you would like to follow this up
with a note because you said it is misleading but it is the term
which has been used by the Foreign Office for years. It has been
used by other Foreign Office ministers in front of this Committee
and it is used by FCO officials and ambassadors and high commissioners
wherever we go. Would you like to let us have a further note as
to whether Britain will take the lead in changing the terminology
from "EU ambassador "to "EU representative"?
Perhaps you can also give us a further note as to what is the
degree of control the UK can have over the endless increasing
designation of individuals as EU ambassadors and also over the
increasing proliferation of EU so-called ambassadorial residences.
It would be helpful to have further information.[1]
Mr Alexander: Of course I will
be happy to write to you. Let me be very clear, the context in
which this evidence session takes place is continuing discussion
and continuing questioning as to whether the European Union intends
on the basis of the Draft Constitutional Treaty to establish an
External Action Service. I would make clear the context in which
I make the remarks reflects the fact that, notwithstanding the
manner in which those particular posts were reported in The
Sunday Times, that should not be seen as prejudging the important
issue which is dependent and consequential upon the ratification
of the Draft Constitutional Treaty.
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