Üjf199ÝÜxpEuropean Scrutiny Committee: Scrutiny of European DocumentsËÜapScrutiny of European DocumentsÌEuropean Scrutiny CommitteeÌÈWednesday 5 November 2008ÌÜjf27ÝMembers present:ÌÜjf27ÝMichael Connarty, in the ChairÌÜjf55ÝMr Adrian BaileyÈMr William CashÈJim DobbinÈMr Greg HandsÌMr David Heathcoat-AmoryÈKeith HillÈMr Bob LaxtonÈRichard Younger-RossÌËÜjf22ÝËÜjf50ÝÌÜjf12ÝÜcf3ÝChairman:Ì We are in public session.ËÜjf12ÝÜcf2ÝA BriefsÜcf1ÝËÜjf12ÝÜcf1ÝA1 Ücf2ÝFinancial management (29875 : 12156/08 + ADDs 1-2) (29913 : 12471/08 + ADD 1)Ücf1ÝËÜjf12ÝÜcf2Ý(29914 : 12472/08 + ADD 1) (29987)Ücf1ÝËÜjf12ÝÜcf1ÝThat is to report activity against fraud in 2007 and to report developments on internal audit and account system modernisation in 2007 and to report OLAF activity in 2007. The proposal is that we recommend this for debate in European Committee, once the 2007 report of the European Court of Auditors is received. Is that agreed? I will take silence as assent. Ücf2ÝAgreedÜcf1ÝËÜjf12ÝÜcf1ÝIs anyone interested in going to the debate on fraud? We will leave it to the Committee of Selection then to pluck two of you from the list.ËÜjf165ÝÜjf12ÝÜcf1ÝA2 Ücf2ÝMaritime safety (27324 : 6843/06) ( 27271 : 5907/06) (29106 : 14486/07)Ücf1ÝËÜjf12ÝÜcf1ÝThis is to ensure compliance with flag state requirements of the International Maritime Organization. Documents (b) and (c) to introduce a Community-wide maritime civil liability regime. The recommendation is that this is legally and politically important but we should clear it. Mr Heathcoat-Amory.ËÜjf12ÝÜcf3ÝMr Heathcoat-Amory:Ì I would like to register in stronger terms the fact that this is a regrettable outcome. It may have been forced on us by majority voting, but clearly the Government did not want it. They did not want this measure at all. I do not think it fits with the Better Regulation Initiative to simplify administrative and other burdens on business. The outcome as reported is that at best: progress has been made towards rendering these two draft Directives harmless". That seems to be a rather poor outcome from a long process. It is really conceding that, firstly, our aim is to at best make things harmless and, secondly, we have only achieved progress towards that. We have to try and put a stop to this immense administrative enterprise which struggles to a conclusion that at best only minimises the damage.ËÜjf12ÝÜcf3ÝChairman:Ì Can I refer you to the conclusion at the back of the draft chapter. Are you proposing an amendment to that conclusion?ËÜjf12ÝÜcf3ÝMr Heathcoat-Amory:Ì Well, I would like it registered that it does say: the Government and like-minded Member States were unable to secure Ücnrejection of the Flag State draft Directive" and so on.ËÜjf12ÝÜcf3ÝChairman:Ì So you want to express the Committee's disappointment at that conclusion?ËÜjf12ÝÜcf3ÝMr Heathcoat-Amory:Ì I think we ought to express our support for the Government in its aim and our regret that we were not able to achieve their full aim.ËÜjf12ÝÜcf3ÝChairman:Ì Is that acceptable to the Committee?ËÜjf12ÝÜcf3ÝRichard Younger-Ross:Ì No. I am not convinced by that argument. The UK has been fighting against tighter European maritime legislation. If you look at the sinking of the Ücf2ÝNapoliÜcf1Ý, if we had had tighter European legislation then the ship would not have been allowed to sail out of Rotterdam at the time and cause the devastation it did on the south coast. I think the Government has been playing a regressive role and it is not to be complimented at all.ËÜjf12ÝÜcf3ÝChairman:Ì Any further comments on this? Mr Heathcoat-Amory, you are proposing that we should express our support for the Government and our disappointment that like-minded States were unable to secure rejection, I think that is what you are saying if you look at the final paragraph, which is the public document.ËÜjf12ÝÜcf3ÝMr Heathcoat-Amory:Ì Yes.ËÜjf12ÝÜcf3ÝKeith Hill:Ì I do not think I want to support that expression of regret. The reality is that you are in a negotiating framework in the European Union and you cannot expect to get 100% of what you want all the time. It does seem to me that if on these two regulations we have effectively rendered them neutral then that seems to be a reasonable achievement and not really a subject of regret. It is the nature of the beast that you negotiate and you get a result.ËÜjf12ÝÜcf3ÝMr Heathcoat-Amory:Ì It is an odd position that I, as a Conservative, seem to be the only member of the Committee willing to acknowledge that the Government tried to put a stop to a damaging Directive. As the brief says, it did not address the real issue, it was a poor performance of non-Community flag states, so it was completely misdirected effort. We did have some allies, but these things are now decided increasingly by majority voting. I think it is a very regrettable outcome. The Government may have tried but the system went against them and we need to draw this to the attention of the Government, that we support them in trying but we regret the outcome. I think that is fully in line with the Government's original intention and I think the Committee ought to express that view.ËÜjf12ÝÜcf3ÝChairman:Ì Are you pressing that as a formal amendment?ËÜjf12ÝÜcf3ÝMr Heathcoat-Amory:Ì Yes.ËÜjf12ÝÜcf3ÝChairman:Ì We have a formal amendment from Mr Heathcoat-Amory to alter the conclusion to say that we support the Government's position and regret that the Government and like-minded Member States were unable to secure rejection of the flag state draft Directive, et cetera. That is the proposal.ËÜjf12ÝÜcf3ÝMr Bailey:Ì Sorry, could you just say that again?ËÜjf12ÝÜcf3ÝChairman:Ì If you look at the conclusion on the final page of the draft chapter, the second sentence, it would be: The Committee supports the Government and expresses concern that the Government and like-minded Member States were unable ... " et cetera. That is the amendment to that second sentence. That is the proposal, which would be aye. Those against would be no.ËÜjf14ÝÜcf2ÝÜcf2ÝAmendment proposed, in line 2, to leave out the words Although the Government and other like-minded states were unable to secure rejection of the flag state draft Directive", and to insert the words We endorse the reservations of the Government and other like-minded states about the flag state draft Directive"._ (Mr. David Heathcoat-Amory.)Ücf1ÝËÜjf14ÝÜcf2ÝÜcf2ÝQuestion put, That the Amendment be made.Ücf1ÝËÜjf14ÝÜcf2ÝÜcf2ÝThe Committee divided.Ücf1ÝËÈÜdt9p0,0p6g,7p6ÝÜcf2ÝÜbtÜdc30ÝAyes, 4ÜntNoes, 3ÜetÜbtMr Adrian BaileyÜntMr William CashÜetÜbtJim DobbinÜntKeith HillÜetÜbtMr Greg HandsÜntRichard Younger-RossÜetÜbtMr David Heathcoat-AmoryÜdc0ÝÜetËÜcf1ÝÜjf14ÝÜcf2ÝÜcf2ÝAmendment agreed to.Ücf1ÝËËÜjf12ÝÜcf3ÝChairman:Ì The amendment was carried and we will duly amend the conclusion to the draft chapter.ËÜjf12ÝÜcf1ÝA3 Ücf2ÝFinancial Services (30003 : 13713/08 + ADDs 1-2)Ücf1ÝËÜjf12ÝÜcf1ÝA3 is to improve the Capital Requirements Directive. The proposal is that we should clear it, but we draw it to the attention of the Treasury Committee. As we know, they are undertaking an inquiry into these matters at this moment. Mr Cash.ËÜjf12ÝÜcf3ÝMr Cash:Ì I understand the Treasury Committee is looking at this, but there is still a question of whether it should be debated because going to the Treasury Committee does not necessarily mean that it will be debated. Therefore, I would want this debated. In particular, looking at the document itself, you will notice, Chairman, that it says the draft Directive is to amend the Capital Requirements Directive with the aim of achieving certain objectives. It goes on to say that the proposed amendments, according to the Minister, have the potential to deliver significant benefits". The bottom line is it is to do with a document known as Basel II which I am reliably informed by many in the City is actually regarded as the root of many of these problems. It is, therefore, a matter of grave importance to a lot of people as to how this works in practice. The words aims" and potential" would be significantly challengeable by people if they were asked to give evidence before we had that Treasury Select Committee. This is very, very serious territory and it may well be that the Treasury Select Committee will receive evidence on this issue which will change the basis on which the Government is now presenting it. In the Explanatory Memorandum under item three, prepared by the Treasury, it talks about the overarching goal" is to achieve certain objectives. I also notice in paragraph nine, again, the proposal aims" and in paragraph ten the proposal aims". It does not say it will achieve these objectives, these are just anticipated hopes. There is also the question of subsidiarity and the Government believes that the proposal is consistent with the principle of subsidiarity, which I would certainly challenge. Paragraph 21 goes on to say that the United Kingdom, whilst supporting the implementation of these Directive amendments, which by the way is put together within the Treasury and the negotiating team without, as far as I know, and I may be wrong, input from the people in the City who know more about these things, the lawyers and all those sort of people, and there is a huge amount of intensive study going into all this at the moment, not only supports these amendments and, where appropriate, will seek adjustments to further improve outcomes", so they are not sure at the moment whether, in fact, they are going to have to amend these documents later. Furthermore, in the Regulatory Impact Assessment it goes on to say: The purpose and intended effect states: object of the revision", this is set out before us, a single financial market in the EU is a key factor in promoting competitiveness". Now, I have to say that the one thing that it may not be is to improve competitiveness if you bring everybody together into a single market. In addition to which, if you also put all these things within the framework of European legislation, you may be reducing competitiveness and not increasing it. It then goes on to say that there are three strategic objectives ensuring a single market for wholesale financial services and various other aspects", all of which I think are extremely challenging. It also goes on to say: The current proposal is still to be discussed and agreed", so we have got time. It then says it is subject to co-decision and that in itself takes the whole procedure into a new dimension. Co-decision, as we know because we have been studying this, is going to be more and more important. Finally, it talks about transposing the Directive by 31 January 2010 and that means that there is time to get this right. If it were to go to the Treasury Select Committee, if these matters are as important as I believe they are and require extremely expert analysis by people who know a great deal about these things, then I would have thought there was time to consider these questions, time to get the evidence before the Treasury Select Committee and then for us to decide at that stage whether we want a debate or not in the light of what the Treasury Select Committee says. If that was not regarded as a possibility in terms of timing then I would say that we should take the most prudential position we can adopt in the light of the importance of this and recommend it for a debate to run parallel with the Treasury Select Committee. My first proposal would be to wait until the Select Committee has considered it, which I think does make sense, they will then take evidence on all these questions, but we must keep the option of being able to require a debate for legal or political importance at the right time.ËÜjf12ÝÜcf3ÝChairman:Ì Can I just make a few points before bringing Greg Hands in. The timetable is we would have to agree the Directive by 31 January as the best estimate, which means there is a constraint whether you can have both the evidence and debate thereafter which is probably difficult since we are talking a number of weeks off in recess and the Queen's Speech. Your proposal is if we cannot have sequentially the Treasury Select Committee looking at it and a debate then we should have them in parallel. I think that is quite clear. It says in the Explanatory Memorandum on consultation: The Commission ran an open consultation for two months between April and June, published a feedback statement shortly after. They received 118 responses from across the EU on the question about the involvement of their own banking system. Domestically, the Treasury and the FSA have attended a number of meetings to raise awareness among the industry and to actively encourage responses. This engagement will continue throughout the remainder of the process". I think the consultation was quite thorough. I was at a meeting recently where they did say we had worked very closely with the City of London.ËÜjf12ÝÜcf3ÝMr Cash:Ì Chairman, it is my point at the moment and I would like to make this point. The consultation process is taking place in this context at an EU level. I am saying we need to make sure it is in the interests of the United Kingdom as well. Therefore, I am looking to consultation within the UK as presented to the Treasury Select Committee.ËÜjf12ÝÜcf3ÝChairman:Ì The point I make as a supplementary is that at the meeting people from the City stressed that there had been many meetings and discussions with Treasury officials and Treasury ministers and it is ongoing, no-one out is of the loop on this in a domestic sense.ËÜjf12ÝÜcf3ÝMr Hands:Ì I would like to speak in support of what Mr Cash is saying. It strikes me this is likely to be an extremely important set of proposals. It strikes me that there is a demand out there in the House to debate changes in banking regulations and the way securitisation is dealt with, and I think both the Prime Minister and the leading opposition parties have also said that they see potentially a role for the European Union in changing banking regulations. I think there is demand to have a debate about this kind of thing. In support of Mr Cash, I very much agree with him in terms of what we have got in front of us is very vague and is a set of, I think his phrase was, anticipated hopes", which I think kicks off the aim of the document to improve the Capital Requirements Directive. We do not really have much in the way of detail in what we have got in front of us as to how precisely the Capital Requirements Directive might be improved by these proposals. I think this is important and it should be debated. It seems to me quite possible that we can send it to the Treasury Select Committee and have a standing committee debate on it, that does not seem to be precluded. I happen to disagree with Mr Cash on the Basel II regulations. Although the banks do not like them, in my experience what the banks do not like is not necessarily something that we should be against. I think Basel II regulations generally have been quite effective and quite a good thing in the same way that fair value and multi-market accounting regulations have also been very good and very effective despite the fact they have recently been undone. I think this should be debated, Chairman, there is a demand to have a debate about this kind of thing and we should be doing that.ËÜjf12ÝÜcf3ÝChairman:Ì Can I just give further information. We have checked the timetable and we probably have until April 2009, so there is likely to be the ability to have a sequential debate, to refer it to the Treasury Select Committee and thereafter to have a debate.ËÜjf12ÝÜcf3ÝMr Cash:Ì That would be ideal.ËÜjf12ÝÜcf3ÝChairman:Ì That would be the maximum amount of material presumably for such a debate. It may be that the Treasury Select Committee will refer their own report to the floor of the House for a debate.ËÜjf12ÝÜcf3ÝMr Cash:Ì Who knows!ËÜjf12ÝÜcf3ÝChairman:Ì Which may preclude ours.ËÜjf12ÝÜcf3ÝKeith Hill:Ì I just want to put on the record that I have received no representations on this matter either from constituents nor have I had it raised with me by other Members of Parliament and, therefore, from my point of view, I am completely unaware of any demand for a debate on this matter. If you were going to propose in the short-term any debate in a European Standing Committee I would have to oppose it.ËÜjf12ÝÜcf3ÝChairman:Ì The proposal is given the timetable to be sequential, it would be after the Treasury Select Committee had taken this matter into account in its own deliberations on the banking sector.ËÜjf12ÝÜcf3ÝMr Cash:Ì Chairman, we might decide that we did not think it was necessary to debate it after the Treasury Select Committee report. All I am saying is that I am not prepared at this juncture, knowing how important it is, to take it at face value. I do not know, any more than I suspect Mr Hill knows, the real implications of all this. I am saying I want caution, that it is hugely important and, therefore, we ought to be very careful where we go and make sure we get the Treasury Select Committee to look at it first and then make a decision.ËÜjf12ÝÜcf3ÝChairman:Ì The proposal is to sequentially have a debate as well as referring it. That is the proposal from Mr Cash.ËÜjf12ÝÜcf3ÝMr Hands:Ì The proposal is not to clear it, is that right, Chairman?ËÜjf12ÝÜcf3ÝChairman:Ì It is not cleared anyway.ËÜjf12ÝÜcf3ÝMr Hands:Ì But not to send it for debate yet?ËÜjf12ÝÜcf3ÝChairman:Ì It is not to clear, draw it to the attention of the Treasury Select Committee and leave it open for a debate thereafter.ËÜjf12ÝÜcf3ÝMr Cash:Ì That is all.ËÜjf12ÝÜcf3ÝChairman:Ì That is the proposal. Mr Hill, do you want to oppose that?ËÜjf12ÝÜcf3ÝKeith Hill:Ì May I be clear. I am sorry that I am probably not as familiar with the implications of these recommendations, but does that mean that it will not then be drawn to the attention of the House if we do not clear it at this point? Will it be included in our report?ËÜjf12ÝÜcf3ÝChairman:Ì The whole draft chapter will be in, it is just that the recommendation will be amended to say that we are not clearing it and we add that we are holding open the option of having a debate, but at the moment sending it to the Treasury Select Committee. We did this last week also with something that was optional.ËÜjf12ÝÜcf3ÝMr Cash:Ì We are not clearing it for the time being.ËÜjf12ÝÜcf3ÝChairman:Ì Not clearing it for the time being and sending it to the Treasury Select Committee. Is that agreed? Ücf2ÝAgreedÜcf1ÝËÜjf12ÝÜcf1ÝA4 Ücf2ÝControl of ozone depleting substances (29949 : 12832/08 + ADDs 1-3)Ücf1ÝËÜjf12ÝÜcf1ÝA4 Ücf1Ýis to review the steps taken under the Montreal Protocol on substances that deplete the ozone layer, and propose further measures. The recommendation is that we do not clear this, further information is awaited as in the draft chapter attached. Ücf2ÝAgreedÜcf1ÝËÜjf12ÝÜcf1ÝA5 Ücf2ÝMaternity leave (3022 : 13983/08 + ADDs 1-2)Ücf1ÝËÜjf12ÝÜcf1ÝA5 Ücf1Ýis to amend the Pregnant Workers Directive of 1992 to increase the minimum length of time for maternity leave, increase the minimum level of maternity pay and give pregnant workers greater protection from discrimination on the grounds of their pregnancy. The recommendation is we do not clear this and also ask for further information as in the draft chapter attached. Ücf2ÝAgreedÜcf1ÝËÜjf12ÝÜcf1ÝA6 Ücf2ÝVocational education and training (29613 : 8289/08 + ADDs 1-2)Ücf1ÝËÜjf12ÝÜcf1ÝA6 Ücf1Ýis to propose a draft Recommendation to Member States on the implementation of a European Quality Assurance Reference Framework to improve the quality of vocational education and training. The recommendation here is that we clear this. Ücf2ÝAgreedÜcf1ÝËÜjf12ÝÜcf1ÝA7 Ücf2ÝWork-life balance (30015 : 13977/08)Ücf1ÝËÜjf12ÝÜcf1ÝA7 Ücf1Ýis to report on EC activity intended to help people achieve the work-life balance that suits them. The recommendation is to clear it with the draft chapter attached. Ücf2ÝAgreedÜcf1ÝËÜjf12ÝÜcf1ÝA8 Ücf2ÝTerm of copyright protection for performers and record producers (29892 : 12217/08)Ücf1ÝËÜjf12ÝÜcf1ÝA8 Ücf1Ýis to extend from 50 years to 95 the term of protection for recordings of performances. We are recommending that this is not cleared and we seek additional information.ËÜjf12ÝÜcf3ÝMr Cash:Ì Could I just make one comment, and I am very glad that we are not clearing this, simply to say it is hugely important with huge implications and it is a very wise recommendation.ËÜjf12ÝÜcf3ÝChairman:Ì I have to say that I am a great supporter of it and have privately lobbied for this as the Chair of the Parliamentary Jazz Appreciation Group.ËÜjf12ÝÜcf3ÝMr Cash:Ì Of which I am also a member.ËÜjf12ÝÜcf3ÝChairman:Ì You are indeed a member. Many jazz operatives end up in their old age with no income because after 50 years people can put their recordings out without paying them a penny. Hopefully it will be carried eventually in some form.ËÜjf12ÝÜcf1ÝA9 Ücf2ÝExcise duty (29470 : 6615/08)Ücf1ÝËÜjf12ÝÜcf1ÝA9 Ücf1Ýis to update and replace the legislation governing arrangements for excise duty. The recommendation is we clear this. Mr Heathcoat-Amory.ËÜjf12ÝÜcf3ÝMr Heathcoat-Amory:Ì We are being invited here to endorse a scrutiny override. This is a matter to do with tax, which this Committee always treats as a matter of importance, rightly. What seems to have happened is that the EU is proposing to update the regime covered by excise duty. I am sure it is right to have a go, but there is no urgency here. This is not affected by the debt crisis. Indeed, the original Directive goes back decades. Discussions have been going on at official level and for their own convenience they have dawdled along and suddenly say, We need to approve this" without any scrutiny clearance from this Committee and I do not think that is good enough. I think if we let this go through it will become completely routine for the Council of Ministers to agree things according to their own timetable to fit their own presidency priorities. We need to assert that this is not acceptable and, therefore, I propose that instead of accepting the Minister's apology we should only note it and, indeed, we should append a sentence saying we hope that this does not become general and routine, which it seems to be doing.ËÜjf12ÝÜcf3ÝKeith Hill:Ì I am not sure that I agree with Mr Heathcoat-Amory about this. The Minister's letter sets out for us the issues, and there are six of them, which he explains and which he says have now been resolved satisfactorily and seeks from us a kind of prospective forgiveness for accepting the general approach. It seems to me that we are in a position to say that we agree with the Minister that matters have been resolved satisfactorily. In those circumstances it seems to me quite reasonable for us to lift any kind of scrutiny bar at this point and to say we think it is perfectly understandable that if the issues have been removed that he should go ahead at this meeting and accept a general approach.ËÜjf12ÝÜcf3ÝMr Heathcoat-Amory:Ì I am concerned about process here. It is in our Standing Orders that we have an opportunity to look closely at these proposals and to satisfy ourselves about their importance, and possibly recommend them for debate. We cannot do this if we are bounced into a political agreement, which really means the thing has been agreed, simply to suit the timetable set by the French Presidency in this case. They have had years to worry about this. The electronic system was first brought in in a decision in 2003, so they have had five years to implement this and worry about it and bring proposals to Member States, but they are now hurrying it through doubtless to try and get the French Presidency some kudos for its six months in office. This is becoming a system that suits the timetable of the European Union and it is important on behalf of Member State parliaments that this Committee stands up for itself and insists that we must be given time to do our duty. Although I do not think it is good enough in this case, I would entirely accept that if this was an emergency, something to do with propping up the banking system in a credit crisis, but that is not the case with this document. There is nothing we can do about this, as usual we are presented with a fait accompli, but I do not think we should say we accept this, we should note the Minister's apology, and we are grateful for that, but they go on apologising and this is really becoming routine, there are scores of scrutiny overrides now. On behalf of the House I think we should object.ËÜjf12ÝÜcf3ÝChairman:Ì I do not think there are scores, in fact there is a clear downward trend. Particularly since we now hold the meeting before the Councils in early October and late September we have probably prevented the majority that occurred last year. I have to say I lean towards your position, Mr Heathcoat-Amory, I think ministers should be quite strict with themselves about these matters. In this case it seems there are advantages and it is clear the French Presidency are charging ahead with a number of issues and the Minister should not, therefore, think that he can just get away with it and we accept it. We have to expect an apology and send a warning out that we do not expect this to happen and every effort should be made to avoid it. In this case it was probably unavoidable, but every effort should be made.ËÜjf12ÝÜcf3ÝMr Bailey:Ì I oppose what has been proposed by Mr Heathcoat-Amory. Looking at the documentation it says: When the Committee first considered this proposal it commented that clearly introduction of the EMCS and simplification of general excise procedures were important". If this Committee takes a position that early introduction of these were important, and in the narrative it explains some of the outstanding issues were resolved, then to say that there should be further consideration of it and that a decision should not be made by the Minister effectively contradicts the position this Committee took earlier. I think really what is being recommended is consistent with the approach that has been taken by the Committee before.ËÜjf12ÝÜcf3ÝChairman:Ì Do you want to press it?ËÜjf12ÝÜcf3ÝMr Heathcoat-Amory:Ì Yes, I do. This is a question of process. It is not that this might have been the best outcome that we could hope for. We are always told not to centre on the merits of proposals but on the means by which decisions are taken. This is an acknowledged override of our scrutiny, there is no doubt about that, that fact is not in doubt, indeed the Minister apologises for it, but we should note that we do not like this and it should not become routine. I regret that in my view I think it is and we should try and put a stop to it.ËÜjf12ÝÜcf3ÝChairman:Ì I think there is some logic in what has been said because really the French have been remiss in this. The French have brought something forward, the text emerged on 29 October and they put it on an agenda on 4 November. I think our ministers have to push back a little when they are bounced like that and maybe if we were a little bit stricter with them they might actually say to the French, No, you can't do that. You can't produce something on almost the last day of one month and put it on an agenda for the 4Ücf5ÝtÜcf1ÝÜcf5ÝhÜcf1Ý of the next month". It is unnecessary and, given it is an electronic system, it will not come in for quite some time given the equipping and all the rest of it we will want. I think the French do want to get through the agenda and maybe we should constrain them. The Committee have a proposal to take out from the conclusion in the draft chapter and accept". Does anybody want to further amend that?ËÜjf12ÝÜcf3ÝMr Heathcoat-Amory:Ì To take out and accept" and also to put a sentence or clause at the end saying that we hope that further overrides of this nature will be resisted by the Government.ËÜjf12ÝÜcf3ÝChairman:Ì That is the proposal. Those for that proposal would be aye. Those for the conclusion as in the draft chapter would be no.ËÜjf14ÝÜcf2ÝÜcf2ÝAmendment proposed, in line 3, to insert the words We hope that further over-rides of this nature will be resisted by the Government"._ (Mr David Heathcoat-Amory.)Ücf1ÝËÜjf14ÝÜcf2ÝÜcf2ÝQuestion put, That the amendment be made.Ücf1ÝËÜjf14ÝÜcf2ÝÜcf2ÝThe Committee divided.Ücf1ÝËÈÜdt9p0,0p6g,7p6ÝÜcf2ÝÜbtÜdc30ÝAyes, 3ÜntNoes, 4ÜetÜbtMr William CashÜntMr Adrian BaileyÜetÜbtMr Greg HandsÜntJim DobbinÜetÜbtMr David Heathcoat-AmoryÜntKeith HillÜetÜbtÜntRichard Younger-RossÜdc0ÝÜetÜcf1ÝËÜjf12ÝÜcf1ÝThe amendment is lost. The draft chapter as originally put down.ËÜjf12ÝÜcf1ÝA10 Ücf2ÝAmendments to the rules of procedure of the European courts (30042 : 13298/09) (30081 : 14418/08) (30080 : 13299/08) (30083 : 14420/08) (3007 : 13300/08) (30082 : 14419/08) (30078 : 13301/08) (30084 : 14443/08)Ücf1ÝËÜjf12ÝÜcf1ÝA10 Ücf1Ýis to amend the rules of procedure of the European courts and the Civil Service Tribunal. The recommendation is we clear it. Ücf2ÝAgreedÜcf1ÝËÜjf12ÝÜcf1ÝA11 Ücf2ÝMarketing of products from genetically modified oilseed rape (30091)Ücf1ÝËÜjf12ÝÜcf1ÝA11 Ücf1Ýis to authorise the placing on the market of products containing, consisting of, or produced from genetically modified T45 oilseed rape. The recommendation is that we clear it.ËÜjf12ÝÜcf3ÝMr Cash:Ì I have reservations about this. For reasons that are clear, this is a matter of great importance. In terms of the generation of genetically modified oilseed rape it has been around the House of Commons over a period of time but this, however, is the marketing and products from these genetically modified oilseed rapes. There is also a very big question which is currently in the public mind politically about whether or not oilseed rape is the right way to go. For a variety of reasons I think there are a lot of people who would want to debate this and who would be very interested in the outcome to see how, within the House of Commons, the political balance emerges on the marketing of the products. I would recommend this for debate.ËÜjf12ÝÜcf3ÝRichard Younger-Ross:Ì I would support that. We have a string of GM motions or Directives coming through from the Union, I know that they have been debated in the past and I know that attendance at those meetings has got lower, however because we cannot necessarily interest some of our colleagues in the matters they are important and I believe it is right for us to make sure that they are raised for debate. The public would certainly consider them important.ËÜjf12ÝÜcf3ÝChairman:Ì The debate would be entirely on this document. We know the process and I have supported debates in the past where it is clear that they cannot get a majority in Council for it, which means there is not a majority among the countries for it, but because it is a regulation it is within the remit of the Commission to deliver it. We had the famous Austrian case. I think we now know what will be the mantra in response to any debate, that it will be the same tale we have heard a number of times. I wonder if it is really worth sending it for debate on that basis. We do not get a large turnout at these debates, we did not when we had them, but you have the power as a Committee. The proposal is to send it for debate, so it will be aye for a debate and no for the recommendation that we clear.ËÜjf14ÝÜcf2ÝÜcf2ÝChapter Headnote read. Amendment proposed in line 10, to leave out the word Cleared", and to insert the words For debate in European Committee."_ (Mr William Cash.)Ücf1ÝËÜjf14ÝÜcf2ÝÜcf2ÝQuestion put, That the Amendment be made.Ücf1ÝËÜjf14ÝÜcf2ÝÜcf2ÝThe Committee divided.Ücf1ÝËÈÜdt0p3g,9p6,0p9g,6p3,0p3gÝÜcf2ÝÜbtAyes, 3ÜntNoes, 3ÜetÜbtMr William CashÜntMr Adrian BaileyÜetÜbtMr David Heathcoat-AmoryÜntJim DobbinÜetÜbtRichard Younger-RossÜntKeith HillÜetËÜjf14ÝÜcf2ÝÜcf2ÝWhereupon the Chairman declared himself with the Noes.Ücf1ÝËËÜjf12ÝÜcf1ÝI cast my vote for the recommendation to clear.ËÜjf12ÝÜcf1ÝA12 Ücf2ÝMarketing of products from genetically modified soybean (30074 : 14683/08)Ücf1ÝËÜjf12ÝÜcf1ÝA12 Ücf1Ýis to authorise the placing on the market products containing, consisting of, or produced from genetically modified soybean. That is line MON89788. The recommendation, again, is to clear.ËÜjf12ÝÜcf3ÝMr Cash:Ì I have to say the same as I did before.ËÜjf12ÝÜcf3ÝChairman:Ì We will just have a vote. Those for a debate will be aye. Those for recommendation that we clear will be no.ËÜjf14ÝÜcf2ÝÜcf2ÝChapter Headnote read. Amendment proposed in line 13, to leave out the word Cleared", and to insert the words For debate in European Committee."_ (Mr William Cash.)Ücf1ÝËÜjf14ÝÜcf2ÝÜcf2ÝQuestion put, That the Amendment be made.Ücf1ÝËÜjf14ÝÜcf2ÝÜcf2ÝThe Committee divided.Ücf1ÝËÈÜdt0p3g,9p6,0p9g,6p3,0p3gÝÜcf2ÝÜbtAyes, 3ÜntNoes, 3ÜetÜbtMr William CashÜntMr Adrian BaileyÜetÜbtMr David Heathcoat-AmoryÜntJim DobbinÜetÜbtRichard Younger-RossÜntKeith HillÜetËÜjf14ÝÜcf2ÝÜcf2ÝWhereupon the Chairman declared himself with the Noes.Ücf1ÝËËÜjf12ÝÜcf1ÝI give my casting vote for the proposal to clear.ËÜjf12ÝÜcf1ÝA13 Ücf2ÝEU military mission in Chad and the Central African Republic (29396) (29397) (29398)Ücf1ÝËÜjf12ÝÜcf1ÝA13 Ücf1Ýis to enable the launching of a military mission in Chad and the Central African Republic. This is a further report about the mid-point review and the Minister's views on its conclusions. The recommendation is that we clear but ask for further information at the end of the time. Ücf2ÝAgreedÜcf1ÝËÜjf12ÝÜcf1ÝA14 Ücf2ÝProtecting euro coins (a) (28956 : 13468/07) (b) (29936 : 12586/08 + ADD 1)Ücf1ÝËÜjf12ÝÜcf1ÝDocument (a) is to amend legislation on protection of the euro from counterfeiting, and document (b) is to amend legislation prohibiting medals and tokens too similar to euro coins. It is recommended that we should clear both documents. Ücf2ÝAgreedÜcf1ÝËÜjf12ÝÜcf3ÝMr Cash:Ì Even though I do not like the euro, could I say that even I would say that it was not a good idea to produce counterfeit euros. I think the euros are counterfeit anyway!ËÜjf12ÝÜcf1ÝA15 Ücf2ÝConsumer rightsÜcf1Ý (Ücf2Ý30036 : 14183/08 + ADDs 1-3Ücf1Ý)ËÜjf12ÝÜcf1ÝA15 Ücf1Ýis to repeal four existing Directives on consumer rights and replace them with one which is intended to improve consumer protection and remove barriers to cross-border trade. The recommendation is that we do not clear and we ask for further information. Ücf2ÝAgreedÜcf1ÝËÜjf12ÝÜcf1ÝA16 Ücf2ÝValue added taxation (29836 : 11615/08 + ADDs 1-2)Ücf1ÝËÜjf12ÝÜcf1ÝA16 Ücf1Ýis to make permanent the possibility of reduced VAT rates on labour-intensive and locally supplied services. The recommendation is that we do not clear and we await further information. Ücf2ÝAgreedÜcf1ÝËÜjf12ÝÜcf1ÝA17 Ücf2ÝFinancial assistance for Hungary (30093 : 14949/08)Ücf1ÝËÜjf12ÝÜcf1ÝA17 Ücf1Ýis to authorise a balance of payments support loan to Hungary. The recommendation is that we should clear this. Mr Cash.ËÜjf12ÝÜcf3ÝMr Cash:Ì There are two issues. First of all, the question of the question of the scrutiny reserve. I note that today they are having the meeting, so for practical purposes we are being told that they are deciding this today and agreeing that the financial assistance for Hungary should go ahead, and that is a breach of the scrutiny reserve. I would actually want to have the Minister to explain this because the way it is put is that we want to work together on a co-ordinated basis to help all the Member States, but actually the real problem here is how have people been conducting themselves in relation, for example, to the Stability and Growth Pact. I am not at all happy that we should simply go ahead and tick the box, and nor should the Minister. There has been ample time to get to the issue itself, for us to have had this document at an earlier stage. I note that the European Central Bank made its decision on 16 October, which was several weeks ago, and on 28 October the Community agreed a total of #16 billion for Hungary plus #5.2 billion for Hungary from the Community. We are talking about a total of #21 billion, which is a lot of money. There is the question, if we are not going to put our heads in the sand, or at least if governments are not going to put their heads in the sand, how this can be justified. It seems to me that even if it can be justified, it should be debated because it is a huge issue. As we are informed, Hungary is the first non-eurozone Member State to receive ECB support, so it is a unique situation. It seems to me that it is the kind of thing where they could have acted sooner in getting it to us. It is an issue of such importance, particularly as they say: The Minister says that there are no direct financial implications for the United Kingdom under this proposal", but I do not agree. I would qualify that by saying there are indirect financial implications of a significant kind because we are contributors to all this. For a variety of reasons, and without in any way wanting to be difficult to Hungary, who I am sure do need help, that in itself politically is not a reason why we should not debate it. Firstly, we have been overridden by scrutiny reserve for what I would regard as lack of good timing by the Government in getting documents to us. Secondly, I think it has ongoing implications. It is a unique situation and I strongly believe that we should at least debate it because there are many people in the House of Commons who would think that this is a hugely important matter and politically I would have said it should go on the floor of the House, but I would be prepared to accept a standing committee.ËÜjf12ÝÜcf3ÝMr Hands:Ì I would like to speak in support of what Mr Cash has said. I agree with everything he has said so far. All I would add is I do not think this will be the last one of these, I think there are other smaller EU states that are in balance of payments difficulties, or likely to be, or certainly in budget difficulties_at least a couple of the Baltic States. I am conscious of the fact that we are in public session and I do not want to cause a diplomatic incident by naming individual countries. There could well be implications for one or two of the larger EU countries. I think it is very important for us to be able to examine this in the House. I would probably go for a standing committee rather than on the floor of the House at this juncture, but in the future I think it may well have to come on to the floor of the House. There should be a debate on this. In actual fact, we know Hungary has been in financial difficulty for some time, for a couple of months, and I think it might have been possible for the Government to get a view before that. I am not fully sold on the argument that this came suddenly and out of the blue. I would support any move for this document to be further debated.ËÜjf12ÝÜcf3ÝKeith Hill:Ì Chairman, can I advance a view on this?ËÜjf12ÝÜcf3ÝChairman:Ì Yes, Mr Hill.ËÜjf12ÝÜcf3ÝKeith Hill:Ì I accept the importance of such support loans to Hungary and potentially to other European Union Members and it probably is a matter which ought to be discussed in the House of Commons, but my understanding is that if we were to have a debate on this particular document we would be restricted to the technicalities of this particular loan. My understanding is also that it is quite likely that in short order we are going to receive further documents which are about the wider issue of the actions of the ECB in conjunction with the World Bank and other organisations. It seems to me that a document which raised the broader issue of such loans would be a more appropriate vehicle for the sort of debate which Mr Cash is calling for. I would, perhaps unusually in terms of my track record, agree with the principle of such a debate, but suggest that we hold fire for a time in the expectation that there will be a better vehicle for such a debate coming along shortly.ËÜjf12ÝÜcf3ÝMr Cash:Ì Chairman, through you, could I ask Mr Hill on what basis he believes that there will be an opportunity for a broader debate and in relation to which documents. I am not trying to be difficult, I am just fascinated, as I am always with everything you say.ËÜjf12ÝÜcf3ÝKeith Hill:Ì The fascination is entirely mutual, I can assure you. In fact, you are like a snake hovering before my eyes! I say this because of advice that has already been submitted to the Committee, but, if I dare say it, in private session.ËÜjf12ÝÜcf3ÝChairman:Ì If you look at the document, the large facility referred to by Mr Cash, in fact the IMF is referred to in paragraph four of the draft chapter and it was on 28 October that the IMF, the Community and the World Bank announced a joint financing package of è20 billion. It was not the European Central Bank. The è20 billion is from the IMF, the World Bank and the Community.ËÜjf12ÝÜcf3ÝMr Cash:Ì It says the Community and". It is a wrap-up.ËÜjf12ÝÜcf3ÝChairman:Ì The Community is not involved in that. The Community is a separate matter. The Community is in a situation where it says in paragraph five: the Community will provide a loan of è6.5 billion", that is #5.2 billion, through support". The two are separate. The very large financial package is coming from the IMF, the Community and the World Bank but it is really an IMF borrowing process. What they are asking for in two parts is, one, to approve what has been done for Hungary, and that was where the breach of scrutiny came, and the Minister did write and apologise to myself that this was being forced on them. The second part is that it is a facility, as Mr Hands said, where, as Mr Hands said, it will be anticipated that other countries may come into similar situations looking for loans in the future. I am just putting that on the record, I am not giving any view on debate or not debate, it is just so that we know what we are discussing.ËÜjf12ÝÜcf3ÝMr Heathcoat-Amory:Ì Can I just draw attention to a rather heroic statement in the section on the Government's view where it says: There are no direct financial implications for the United Kingdom". I think what he means by that is he hopes there will be no direct financial implications because what we are effectively doing is underwriting a loan to Hungary. If they default there certainly are implications for this country. If in our private lives we underwrite a loan to a third party we are certainly involved. You hope you will not be called on to pay, but just to assume that there are no financial implications shows an absolutely startling innocence and naivety which I do not think is justified by what I know about the Hungarian economy. I think this needs debating.ËÜjf12ÝÜcf3ÝChairman:Ì I will not intensely question you on how much you know about the Hungarian economy, but I am sure it is one of your prime interests. We seem to have a proposal that we should debate this document and we have a counter move that we do not. The suggestion in the document here is that we clear.ËÜjf12ÝÜcf3ÝKeith Hill:Ì Chairman, could I simply ask whether you are aware that this kind of issue, but perhaps in more general terms, is likely to arise before this Committee at some point in the fairly near future?ËÜjf12ÝÜcf3ÝChairman:Ì Mr Hill, I do not think this is the last time that such a measure will be considered. We are into a completely new context. There was absolutely no doubt both in going to the Chairmen's Committee and COSAC that the discussion around a European agenda for the banking and financial system of Europe is high on the agenda in Europe and high on the agenda here, so we will come back to it, I have absolutely no doubt.ËÜjf12ÝÜcf3ÝRichard Younger-Ross:Ì No doubt you are about to be inspired!ËÜjf12ÝÜcf3ÝChairman:Ì Yes. There is a document in the pipeline, which is a Commission document, which will not come to us on the table of the Committee for a week or two probably, but it is already in hand, in the office. It is in the hand of our adviser as I speak and it will be turned into an Explanatory Memorandum which will have this overarching debate context.ËÜjf12ÝÜcf3ÝKeith Hill:Ì Overarching debate?ËÜjf12ÝÜcf3ÝChairman:Ì Not just one paper, not just one committee, but the actual structure to deal with financial crisis in Europe.ËÜjf12ÝÜcf3ÝMr Cash:Ì There is a slight problem here, I understand, and it is basically that we have not got this document in front of us.ËÜjf12ÝÜcf3ÝChairman:Ì No, we do not.ËÜjf12ÝÜcf3ÝMr Cash:Ì So, formally speaking, we cannot assume that it is not going to be withdrawn or whatever.ËÜjf12ÝÜcf3ÝChairman:Ì Correct.ËÜjf12ÝÜcf3ÝMr Cash:Ì My own view is that the implications of this are broader and, in fact, on 7 October in the fiscal rules debate I mentioned Hungary as a candidate which I think proved to be correct. I am extremely worried about this and I know a lot of other people are too. The fact is that the scrutiny reserve has been overridden and from the correspondence I still have not got a clear picture as to why we did not get that document from the Minister after 16 October/28 October. It could have been last Wednesday at least. We are being told on the scrutiny reserve aspect of things that there was no time and they apologise, but actually, on the face of it, I think they could have let us have the documents earlier.ËÜjf12ÝÜcf3ÝChairman:Ì You did hear me earlier say on the record that I found it a criticism of the French that having received a document on the 28Ücf5ÝtÜcf1ÝÜcf5ÝhÜcf1Ý they bounced it on to the agenda on the 4Ücf5ÝtÜcf1ÝÜcf5ÝhÜcf1Ý. If the document was as in paragraph four, 28 October, we are pretty short on timescale to have it here. With the Minister asking us for some sort of approval, this is the first meeting thereafter that we could have come to it. I accept the apology and what we are dealing with is do we want to debate this. I can see the interest points made by yourself and Mr Hands, the question is do we wait a couple of weeks to get the document on the overarching plan or do we send Hungary to be debated as an individual document.ËÜjf12ÝÜcf3ÝMr Cash:Ì On balance I would say yes because of its unique nature.ËÜjf12ÝÜcf3ÝChairman:Ì Okay, we are going to proceed. We have a proposal before us that we have a debate on this particular document. I do think it would probably be better if it was added to a debate on a much more overarching document, but the Committee are in control of this. Those for the proposal for a debate are aye. Those for the proposal to clear are no.ËÜjf14ÝÜcf2ÝÜcf2ÝChapter Headnote read. Amendment proposed in line 12, to leave out the word Cleared", and to insert the words For debate in European Committee"._ (Mr William Cash.)Ücf1ÝËÜjf14ÝÜcf2ÝÜcf2ÝQuestion put, That the Amendment be made.Ücf1ÝËÈÜdt9p0,0p6g,7p6ÝÜcf2ÝÜbtÜdc30ÝAyes, 3ÜntNoes, 3ÜetÜbtMr William CashÜntMr Adrian BaileyÜetÜbtMr Greg HandsÜntKeith HillÜetÜbtMr David Heathcoat-AmoryÜntRichard Younger-RossÜdc0ÝÜetËÜjf14ÝÜcf2ÝÜcf2ÝWhereupon the Chairman declared himself with the Noes.Ücf1ÝËËÜjf12ÝÜcf1ÝIt is cleared. It will come back to us in a bigger form, I hope, very shortly.ËÜjf12ÝÜcf1ÝA18 Ücf2ÝFood prices and the developing countries (29865 : 11983/08)Ücf1ÝËÜjf12ÝÜcf1ÝA18Ücf1Ý is to set up a facility for rapid response to soaring food prices in developing countries. The recommendation is that we do not clear this but ask for further information. Ücf2ÝAgreedÜcf1ÝËÜjf12ÝÜcf2ÝB BriefsÜcf1ÝËÜjf12ÝÜcf1ÝWe have two B Briefs. These are matters of insufficient legal or political importance to warrant a substantive report to the House.ËÜjf12ÝÜcf1ÝB1 Ücf2ÝEducation and training statistics (29847 : 11799/08 + ADDs 1-3) AgreedÜcf1ÝËÜjf12ÝÜcf1ÝB3 Ücf2ÝLocal authorities and development cooperation (30044 : 14015/08 + ADD 1) AgreedÜcf1ÝËÜjf12ÝÜcf2ÝC BriefsÜcf1ÝËÜjf12ÝÜcf1ÝC Briefs, comments?ËÜjf12ÝÜcf1ÝC1 Ücf2ÝTrade in certain steel products between the European Community and the Republic of Kazakhstan (30046 : 14364/08) AgreedÜcf1ÝËÜjf12ÝÜcf1ÝC2 Ücf2ÝAgreement for scientific and technological cooperation between the European Community and the Government of the United States of America (30013 : 13779/08) AgreedÜcf1ÝËÜjf12ÝÜcf2ÝPre- and Post-Council ScrutinyÜcf1ÝËÜjf12ÝÜcf2ÝPre-Council Annotated AgendaÜcf1ÝËÜjf12ÝÜcf2ÝCulture and Audiovisual Council (13 October)Ücf1ÝËÜjf12ÝÜcf2ÝPost-Council Written Ministerial StatementsÜcf1ÝËÜjf12ÝÜcf2Ý General Affairs and External Relations Council (13 October)Ücf1ÝËÜjf12ÝÜcf2ÝEnvironment Council (20 October)Ücf1ÝËÜjf12ÝÜcf2ÝJustice and Home Affairs Council (24 October)Ücf1ÝËÜjf12ÝÜcf1ÝAre there any points on those? Thank you. There is a Tripartite meeting coming up, the date being Thursday 13 November, if people can try to get along to that, MEPs, Lords and Commons. We have had expressions of interest from a number of our colleagues from the European Parliament. Thank you for your attendance.ËÜjf90ÝÜjf22ÝÜte