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Westminster Hall

Thursday 12 June 2008

[Hugh Bayley in the Chair]

European Commission

[Relevant documents: Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions—Annual Policy Strategy 2009—and Chapter 6 of the Eighteenth Report of the European Scrutiny Committee, HC 16-xvi.]

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. David.]

2.30 pm

The Minister for Europe (Mr. Jim Murphy): I am delighted to serve under your chairmanship, Mr. Bayley, in today’s three-and-a-half-hour debate on this important subject. I thank my hon. Friend the Deputy Leader of the House for proposing the debate as a means of helping the House to achieve better scrutiny of the annual European Commission work plan. That objective is keenly shared by the Government, and I hope that this, the first of what we intend to be annual debates in Westminster Hall on the Commission’s annual policy strategy and legislative work programme, will be an important step in how Westminster scrutinises Brussels.

The Commission’s annual policy strategy establishes policy priorities for 2009 and identifies the initiatives necessary to realise them. As hon. Members know, the new Commission will be appointed in mid-2009. At that point, it will agree a five-year mandate laying out the broad priorities and aims for the period. It is therefore no surprise that the annual policy strategy is primarily a continuation of existing work streams for the current Commission. It is not a set of formal policy proposals but an aspirational document. The Commission has said that it is aimed at “sparking a debate” with the other institutions on where the policy priorities should lie for the next year. That dialogue is helpful in translating the annual policy strategy into deliverables in the legislative work programme for 2009, which will, of course, be presented in October this year.

The annual policy strategy is nevertheless helpful in a number of ways. It provides a framework for the preliminary draft budget for the corresponding year, as well as an operational steer for the Commission services. It helps the Commission to keep on track, preventing drift and endless new initiatives from dominating a new weekly agenda. The strategy is important also because the broad policy priorities that it focuses on will have an impact on the drafting and implementation of specific legislation and proposals. In Whitehall, such documents are important planning tools to help Departments to plan for negotiations.

As my right hon. Friend the Member for Rotherham (Mr. MacShane) and I discussed earlier, 2009 will bring a new European Parliament and European Commission and, subject to national ratification processes, the entry into force of the treaty of Lisbon. Particularly given that backdrop, Members should see the strategy document
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as indicative rather than legislative. I hope that we can welcome it as a series of operational measures following our long institutional debate. After our debates on European structures in recent months, it is a pleasure for me to open a debate not on those structures, but on the substance of what Europe can and should be doing in the next year.

Mr. Philip Hollobone (Kettering) (Con): Will the Minister give way?

Mr. Murphy: I was on my final sentence, but I shall happily give way.

Mr. Hollobone: This debate is about the European Commission’s annual policy strategy. Is there anywhere in it a commitment from the Commission to get its accounts into such an order that they will finally be approved by independent audit? For more than 10 years, the accounts have failed that test.

Mr. Murphy: The hon. Gentleman raises an important point. As I explained in my introduction, the annual policy strategy is not a legislative work programme, but neither is it the annual budget. That will be presented and agreed later in the year. That separate work stream, which is, of course, related to the policy strategy in some ways, needs continuing improvement and transparency, so that there is more confidence in the European Union’s budgetary processes here in Westminster and across the whole of Europe. That is an important point, but not directly germane to the document in question.

The debate is an innovation in our practices here in Westminster, and I look forward to it with great relish.

2.35 pm

Michael Connarty (Linlithgow and East Falkirk) (Lab): As the Minister knows, the European Scrutiny Committee examined last year’s annual policy strategy in detail, not just as a document but as a process. Given that it comes from the European Commission and gives a heads-up of what might be developed into the work programme, we thought, in the spirit in which we have always tried to work, that the earlier that we engaged with the Commission’s thoughts, the more likely we were to be able to influence them before they became directives. After that point, it is a struggle to negotiate improvements at a European Council meeting, as the Minister knows. To do so, we sometimes have to surrender some of our bigger ideas or block something because a directive has been structured so badly that it is not acceptable to the UK.

We carried out an inquiry last year into the 2008 annual policy strategy document. We took oral and written evidence, which I hope Members who are interested in European procedures will have taken the trouble to read. We considered that a useful exercise, providing an examination of the Commission’s planning process and giving the departmental Select Committees the opportunity to engage in the process at the earliest stages.

We often found that, when something became a directive, that was the first time that departmental Select Committees or those with responsibility engaged with it. As the Minister knows, one of the improvements that we suggested was based on the fact that, although Green Papers and
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White Papers from the Commission were widely consulted on by the Government, they were not sent to Select Committees. Everyone outside the House was consulted, but not the responsible Select Committees. Through the process, we saw errors and made positive recommendations.

As the Minister said, the document is not the Commission’s budget, and I am sure that he knows that at our last meeting—not this Wednesday, but the Wednesday before—we discussed the draft budget. We have recommended it for debate, and perhaps those who are interested in the process of audit and accountability will engage with the process in such a debate.

The Committee has considered the 2009 annual policy strategy document, as is reported in our 18th report of Session 2007-08. We examined what was in it and laid out a simple framework for people to look at, hoping that departmental Select Committee members in particular would raise matters with their Departments and engage in the process early on. The document sets out priorities; it does not contain detailed proposals. That is not necessarily a criticism of the Commission, but we assessed that its aspiration that the strategy would be a fundamental tool for debate would not be realised, because of its general nature and because it may have come too early.

It is worth noting that holding such debates on an Adjournment motion on a Thursday, when there is no pressing business in the House, means that we do not necessarily engage all those hon. Members who would normally want to be engaged in the process, because constituency priorities take many of them out of the House.

This will obviously be an important year for the EU. It will have to face up to not only a ratified Lisbon treaty, we hope, and all the new arrangements contained therein, but a new Parliament. There will have been parliamentary elections by the time the annual policy strategy becomes a work programme. That will change the environment in which the debate will continue. Then a new Commission will be appointed, which may set new priorities that disrupt the aspirations in the document.

On behalf of the Committee, I should like to outline what we saw as the key proposals in the annual policy strategy document that people might want to take on board. The Lisbon strategy for growth and jobs will continue to be at the heart of the Commission’s political agenda; I hope that that will be applauded by everyone, because it is fundamental to where we are going as a European partnership. The Commission says:

That is something that we should welcome; just as we are not isolated from the world, the EU is not isolated from the world, and just as we can defend our own position financially, so the EU can help us to defend the position of the 500 million people in the EU.

Kelvin Hopkins (Luton, North) (Lab): I am interested in what my hon. Friend is saying; I always listen with care to what he says on these matters. He is talking about deepening “structural reforms” in the European Union. Those are typical EU words; I wonder whether he could say a little more about precisely what they mean.

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Michael Connarty: Indeed I can. Although this is a very deep and important subject, the Commission sums it up by saying:

If anyone has gone to engage in debate with the other members of the European Union, they will know that, as a country, we have taken on board the Lisbon agenda very strongly. We have gone for liberated markets, including in labour. Some would say that that flexibility has helped to generate jobs, so that we have more people in employment in the UK than we have ever had on record.

Unfortunately, we see a growth in the EU of what has become known as economic patriotism; it used to be called protectionism. Even as we have signed up early to some directives, so other countries are now pushing them back. The one that my hon. Friend the Member for Luton, North (Kelvin Hopkins) hears me talk about quite a lot is the postal directive. We have liberated our postal markets, but the date for the liberalisation of the whole postal market in Europe, which should have been 2009, has now been pushed back to 2011, with some countries calling for a derogation until 2013. Therefore, access to the postal markets will not be available to UK firms in the way that it is available to firms from other parts of the EU.

There are many other examples of such delay. The unbundling of energy markets, with the idea of breaking up the generators of energy from the people who distribute and sell energy, is something that we have already done, but the idea has not been warmly welcomed, let us say, by other countries.

I will not go into great detail about it, but I received an excellent document from the City of London corporation called, “Delivering a competitive EU single market for the 21st century”. It is very well drafted and contains many ideas that we will hopefully take up as a UK Government; perhaps it will be quoted at length as a source of inspiration for Opposition Members. It outlines a very important way of thinking about the future. If there is a new European Commission and a new European Parliament, I hope that they will be more in favour of the Lisbon agenda and less opposed to it; unfortunately, opposition to the Lisbon agenda has been signalled by some at the moment.

The other measures being emphasised are the EU cohesion programmes. To quote the Commission in the annual policy strategy document, those programmes will

will enter—

As we all know, 2009 will be an important year to take forward work on energy and climate change. We had a debate last week on the proposal for renewable
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energy. Our position as a Government is to look for more flexibility in the mandatory targets that have been set by the EU. For example, the Minister for Energy has said that it will cost £5 billion per annum to reach the target of 15 per cent. renewables by 2020. In this particular economic climate, that figure must be a cause for concern. I therefore hope that the figure will be negotiable when the annual strategy policy document turns into the work programme.

Bringing the energy and climate change package to the implementation phase will be a priority. The package will include implementing the revised emissions trading scheme; enacting new legislation on renewables, as I have mentioned; and putting into effect energy efficiency action plans and developing low-carbon technologies. I hope that we all aspire to seeing those measures implemented. At this early stage in the annual policy strategy document, I hope that hon. Members will engage with the implementation process through Select Committees and their own special interests.

The Commission states that a key priority will be to make a success of the Galileo project, which will now be managed by the Commission. There was great controversy, and as a Committee we joined in with that controversy. We were not necessarily convinced that Galileo, as it was originally structured, would be capable of functioning as a commercial activity, and so it turned out; it has now been taken on by the Commission, with some regret on some parts and with some welcome on other parts. Our late colleague, Gwyneth Dunwoody, was very resistant to the idea that the Commission should take on the Galileo project. A number of Opposition Members argued that we have the global positioning system from the USA, which was free to use, and therefore that we did not need a European system. However, we have Galileo, and now we must deal with the question of Galileo, under what is called the Galileo Commission project.

There will also be work on the green transport package. There is a great deal of controversy about how green transport is achieved. In the European Parliament recently, a motion was carried that rejected the idea of biofuels being part of the package, because of the current effect of biofuels on food and food prices.

The APS also mentions the common immigration policy, which will remain a fundamental priority for the Commission and a number of key actions in that field are envisaged. Among others, those actions include the adoption of proposals on legal migration; the further development of Frontex; and work towards completion of the common European asylum system. Of course, the UK has a choice of opting into or out of all those actions, and that will prompt debate in the House every time these issues come up for discussion.

Mr. Hollobone: I am listening with interest to what the hon. Gentleman is saying, and he has now come on to the important issue of immigration. Of course, the EU has some extremely long land and sea borders. Does he or his Committee have any real confidence that the European Commission will introduce any effective measures to prevent the growth of large-scale illegal immigration into the EU?

Michael Connarty: In fact, the role of the European Scrutiny Committee is not to discuss and make policy on the merits of an idea, but to ensure that the Government
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puts forward all the information necessary for Parliament, either in a debate that we hold on the Floor of the House or in the correspondence that we have with the Minister in relation to what the Government propose at the Council of Ministers, which is then reported in the form of statements to the House. Those statements are then on the record in Hansard and in the Library, and every Member should obviously engage with that process of debate if they are interested in the issues.

Personally, I must say that there was a lot of strong argument that we should have joined the Schengen arrangements immediately. There were many reasons against doing so politically, but I can see very few reasons against engaging in all of the processes on immigration and asylum that are proposed under the treaty of Amsterdam. It is unfortunate that the political arguments basically scared everybody into thinking that, if we lost our own borders, we would have a flood of immigrants; we did not lose our own borders and then we had a flood of immigrants anyway.

Mr. Denis MacShane (Rotherham) (Lab): The fundamental point is that no country will surrender control over its immigration policy to Brussels. So when the hon. Member for Kettering (Mr. Hollobone) makes that appeal, he has to convert his own party into thinking in a more pro-European way. Immigration and the control of borders is a matter of national sovereignty; I might regret that, but that is the reality. He cannot wish the European Commission to be tougher on immigration, but deny it the powers and the right to act tougher.

Michael Connarty: That point is very well made. As a former Minister for Europe, my right hon. Friend knows this territory very well. In fact, he was probably the Minister for Europe when some of these decisions were made in the early days.

Immigration is an important matter; it is in the annual policy strategy document, and it will obviously work into the work programme. It is not an issue that will go away; it has to be worked on, and we have to engage step by step with that process. With many of these matters, if the Lisbon treaty is ratified, we will have to take opt-in decisions on them, and as a Committee we are considering how they will be dealt with by Parliament, because Parliament must have a say in advising Ministers about whether or not they should opt in on each of these individual matters.

The point about the 2007 inquiry that we undertook relating to this subject is that it is not likely to cause the kind of engagement on the annual policy strategy document that would prompt the debates on detail. Such issues will come within the work programme; but by highlighting some of them today, we hope that members of the Select Committees will look at the annual policy strategy document. The Government are very positive about it. I have not heard anything from them to indicate that there is something in it that frightens them. It contains matters that we know they are now moving through the process.

We will send the annual policy strategy document and our report on it to all the Select Committees, and I hope that Members will engage with it. Others who do not serve on Select Committees might want to look at the document to see which items are covered, as the hon. Member for Kettering did, whether it is the audit
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function, or immigration and asylum, the use of Frontex and the building of stronger Schengen arrangements to protect our borders.

Those are all things that I hope will be attractive to Members of Parliament who think, as I do, that we need to engage much more closely with Europe. Europe post-Lisbon will involve more of a resolution of forces and less of a triangle of Commission, Council and national Parliaments. The European Parliament will get much more power. We must find a way to be one of the forces in it that makes good policy for Europe, and one of the ways to do so is to engage early, which the annual policy strategy document gives us a chance to do.

I will have to leave early, Mr. Bayley, because I have to speak about the European Union to a group of business people for the Industry and Parliament Trust at 3 o’clock, so I apologise that I will not be here for the rest of the debate.

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