The
Chairman: We now have until 5.42 pm for questions to the
Minister, which is an extension because of our late start. I remind
Members that questions should be brief. It is up to a Member, subject
to my discretion, to ask related supplementary questions
together—though not so many that it hogs all the
time. Mr.
Mark Francois (Rayleigh) (Con): It is always a pleasure,
Mr. Olner, to serve under your chairmanship. That is
particularly the case this afternoon, as the allocated Chairman was
apparently unavailable when we were due to start. We thank you for
manfully stepping in so that we can proceed with this important debate.
I also thank the hon. Member for South Ribble for ably introducing the
debate on behalf of the ESC and for helping us to focus on the
matter.
Now that I
have paid my compliments, I will ask the Minister a question about
funding. Page 73 of the bundle includes the Minister’s letter of
12 March, in
which she explains that of the €600 million the Commission
estimates that it needs for this project, €250 million will be
reprioritised from the existing European neighbourhood and partnership
instrument. She then goes on to say
that “The
remaining...€350
million”— is
due to
come— “from
the margins of Heading 4 of the budget, EU as a Global
Partner.” As
she knows, that money is set aside for crises. The Minister referred to
funding in her opening statement, but only briefly. Will she update the
Committee on where exactly that €350 million will come
from?
Caroline
Flint: As I stated in my letter, there has been some
discussion around €600 million being provided for this area of
work. Some €250 million is being reprioritised from the existing
European neighbourhood policy budget area. The hon. Gentleman is right
to raise this issue, because this particular budget is about looking
forward to try to foresee crises. We had concerns about that in
relation to, for example, the middle east, or if another situation,
such as the Russia-Georgia conflict, were to
emerge. In
the spring European Council declaration on the eastern partnership, my
right hon. Friend the Foreign Secretary secured language on the
importance of maintaining adequate margins to alert everyone to the
importance of the issue. I understand that there is also an emergency
aid reserve in the European Commission budget. In 2009, there is an
allocation of €244 million for that emergency aid reserve. The
amount was fixed at €221 million for the 2007 crisis for the
duration of the 2007-2013 financial
framework. As
the budget margins under the external action budget accommodate
unforeseen and new expenditure, we really need to ensure that this
matter is dealt with properly and in a disciplined fashion. I must say
that one of the aspects of this matter, if one looks through the tables
in the document pack, is the amount that it is suggested might be spent
as opposed to what it is actually believed will be spent in terms of
payment
appropriations. Again,
we need to continue working in that area. I say that
because, obviously, the six countries involved over the next year or so
will be coming back with different proposals and plans for projects.
With the language that my right hon. Friend the Foreign Secretary
secured, we need to ensure that we pay attention, first, to whether the
margin of money is there and, secondly, to how it affects other
priorities. I think that we can attend to that
matter. In
addition, there is agreement on a mid-term review, which has already
started to look at budgeting in this area, and it is due to be
completed roughly a year from now in 2010. Again, some aspects of the
matter need refinement, and I am happy to keep both this Committee and
the European Scrutiny Committee informed about the detail of that
work.
Mr.
Francois: I hear what the Minister has said, but we still
have a problem: this project is due to be launched formally on 7 May;
we are in late April now, and there is still a potential shortfall of
€350 million, if the project is to be carried through as
originally envisaged.
The Minister
has mentioned the emergency aid reserve of up to €244 million.
However, if all that money were committed to this project and other
crises were to happen, there would be no emergency aid reserve to
provide assistance for those other crises, so it would be a very
important decision if that fund were to be earmarked for the eastern
partnership. Bearing
in mind that we will launch this thing within a fortnight, those
financial questions ought to have been answered by now. I want to press
the Minister. Is she saying that the emergency aid reserve has been
allocated to make up the funding shortfall? If she is not saying that,
where will that money come from, bearing in mind, as I have said, that
we are due to launch this thing within a
fortnight?
Caroline
Flint: As I said, the talks around moneys for this
particular partnership are part of an ongoing discussion, the
suggestion being that there could be scope in the margins of the money
set aside for external crises. I presume that that view is based on
previous spending in that area. The aid reserve money is separate, but
it has been identified as a potential source of money, if necessary.
Again, this is something that has to be worked through.
We can see
from some of the projected spending plans that this amount of money
will not necessarily have to come online in this financial year. For
many of the projects and much of the institution-building, proposals
will have to be worked up and then decided on, on a case-by-case
basis.
So the hon.
Gentleman is right to point out the need to keep on top of this issue,
but he is also right to point out the need for us to ensure that we are
clear about what the money will be spent on. Some of the safeguards
that have been included, to look at annual plans and payment against
individual projects, will be one of the ways to check things; first,
that what we are paying for is a good idea and secondly, that the money
is actually there. As I have said, more work needs to be done and I
will be happy to keep the Committee involved and
informed.
Mr.
Francois: I have heard what the Minister has said.
However, if we boil the issue down, within a fortnight we are
supposedly going to commit to a project that could cost up to
€600 million, but we have identified only half the money with
which to fund it. Control of public spending is clearly important given
our country’s current economic condition, so is it in any way
good practice to commit to something when less than half the money to
fund it has been identified? Furthermore, why are we debating the issue
so late in the day when the money is not available? The situation is a
mess, is it
not?
Caroline
Flint: No, I do not agree. The European Union already has
a level of engagement with the six countries involved on a number of
different fronts, and a number of different projects are already
operating in those countries as a result of EU support. I have met
people in Ukraine who have told me about that, and I saw it myself when
I visited the
country. The
Commission’s plans on the further €350 million will be
discussed as part of the mid-term review of the EU financial
instruments and will need Council agreement. It is acknowledged that
more work needs to be done in this area to see it through, but there is
a commitment to
make that happen. As far as I am aware, none of the six countries feels
that the issue should stand in the way of them working in a closer
relationship with the EU to build on existing relationships. As far as
I am aware, all six countries plan to attend the
launch. The
Chairman: I call Mr. Francois, but this will be
his last related
question.
Mr.
Francois: Thank you for your forbearance, Mr.
Olner; I will try to make my question succinct.
The
issue is not that all of the countries turn up to the launch, but how
the project will be paid for. The Minister has said a couple of times
that the issue will be looked at in the mid-term review in 2010, but
that will be a year after the launch of the initiative. I must press
her again: where is the money going to come from? She is asking us to
commit in principle to an initiative that is not fully funded; in fact,
it is hardly even half funded. If she wants the Committee’s
support, she needs to provide greater reassurance and clarity about
what is going
on.
Caroline
Flint: I have tried to provide the Committee with that
today, as well as in my correspondence with the Chairman of the
European Scrutiny Committee. First and foremost, it was felt that a
step change was needed in our relationships with the six countries,
which was based on the fact that, in many respects, we in the EU and,
bilaterally, in the UK Government, already have relationships with each
of the six countries. The issue is therefore one of building and
looking for efficiencies as well as added value via this new
dimension. Some
€250 million has already been found from existing resources of
the European neighbourhood, which is a pretty good
start.
Mr.
Francois: That is less than
half.
Caroline
Flint: Hang on a second. There is a need across the piece,
as the Commission and I have said and the Council has agreed, to look
further at what other support could be forthcoming to support the
project’s ambition. The Government are conscious of, and are in
many respects influencing more, the way in which we can better budget
and plan for the support we need. That is one of the reasons why we
urge that, when budgets are developed, there is a commitment
appropriation, which is like a ballpark figure of what might be
spent—we can see it in the tables in some of the Council
documents—and payment appropriations in relation to what we
think will actually be spent. If members of the Committee look at the
tables, they will see that there is quite a big difference between
those two appropriations, so I have asked my officials to look into how
we can bring the reality of what we think will be spent closer to the
initial overall figure. I assure the hon. Gentleman that we will be
watching the matter very
carefully. As
I have said, I do not think that there have been any complaints from
the countries involved about the method of going forward. Furthermore,
looking at the issue involves tight scrutiny. We all know that
sometimes budgets can be put down and the money not spent, and it is
not unusual for projects to be supported in that way. As I have said, I
will be happy to keep the hon. Gentleman informed as the debate
develops, and if I can provide anything more at the end, I will
certainly do so.
Richard
Younger-Ross (Teignbridge) (LD): The Minister is clearly
putting meat on the problem. The Conservative party, the Liberal
Democrats and Labour Back Benchers have been trying to argue in favour
of the European Union, as we again have a project that has gained
momentum, and it does not matter whether it has been funded, because it
will proceed. We should start the ball rolling down the hill only when
we know where it will arrive and what it will cost. Will the Minister
state concisely whether she knows where the extra funding should come
from and whether she believes it should come out of the aid programme,
and will she guarantee that some of the other projects will be
protected, such as the funding for Turkey and other countries that the
European Scrutiny Committee debated last
week?
Caroline
Flint: As far as I am aware, our relationship with and
support for Turkey would not be affected. The Commission has proposed
the use of a further €350 million from the margins of
the heading, “External Relations”, in the EU budget
between 2010 and 2013. I think that it is partly a step-by-step
approach to funding to ensure that we advance in a practical way, and I
do not think that we necessarily have to decide it all in advance. This
autumn we are due to agree priorities for the use of margins for 2010,
and the eastern partnership is just one of several priorities. The
Commission proposal for expenditure on the eastern partnership in 2010
is €24.25 million, which is a small part of the
margin. In future years we will be able to look at it in the light of
the mid-term review. We have been asking for the development of
mid-term reviews so that we can better track spending and look at what
is really happening.
To a certain
extent there has to be a level of flexibility in all that, because
projects do not always come to fruition in a way that requires a lot of
up-front loading of finance. The tables suggest that the EU is
recognising that many projects will take a couple of years to plan
before money comes in. Overall, the EU has to look at its budget and
how it works, and part of that will be its neighbourhood policy,
whether in the south or the east.
Richard
Younger-Ross: I hear what the Minister is saying, but
there is a danger, to which I alluded earlier, in that projects gain
momentum. One of the difficulties we have with current EU structures is
that once projects have momentum it is difficult to put the breaks on
and ensure that funding is properly used and that they work and deliver
the aspirations as we are being told they should. What discussions is
the Minister having to ensure proper regulatory and financial control
of the projects so that part of the way through the project we can say,
“No, we are going to put the breaks on, because the funding has
not been identified and we are not convinced that it is worth the
money.”?
Caroline
Flint: I will try to help the hon. Gentleman. I have
mentioned several times the mid-term review of ENP financial
instruments, which will take place over the coming years. Allocations
for the eastern partnership will then be allocated to some of the
countries, based on the outcomes of the mid-term reviews. We would like
the allocation of resources to be prioritised according to needs, but
we would also like them to look at the capacity of partners to
deliver.
We are also
working closely with the Commission on how we can strengthen the
effectiveness of EU assistance. Our suggestion on measuring and
improving the objective reporting of partners’ progress, for
example, was taken on board last year, and I think that we improved ENP
progress reports last April as a result. We will continue to pay
attention to that. We will try to ensure that we get clear objective
reporting about how things are being planned and developed, and the
capacity of those countries to take on a project, so that when the
money is delivered it can be implemented on the ground. Work is in
progress to improve the method of planning, monitoring and reporting.
If a country cannot demonstrate that its planning is such that the
money being provided can actually kick in and go into action, it will
be appropriate to have a discussion and not send the money forward. In
a number of areas—dare I say it?—the European Union has
got better in some of the funding it provides, not only for countries
outside the EU but some of the countries in the EU, to make sure that
we get better value for money. If money is not used in the way
suggested, it is brought back. I recall that we discussed that in
relation to Bulgaria and Romania not long
ago.
Mr.
Borrow: In view of the Minister’s observations and
correspondence and this afternoon’s Committee, will the Minister
elaborate and elucidate how she feels the eastern partnership will
affect the current and future direction of Belarus in respect of its
relationship with the European
Union?
Caroline
Flint: I thank my hon. Friend for that contribution.
Engaging with Belarus was the right decision. It is important to
recognise that Belarus has made some positive steps, but there is still
a long way to go. We remain very concerned about the detention of
activists, and we are in regular contact with NGOs about the detention
of individuals, which is important. Belarus will be fully included in
the eastern partnership only if it can demonstrate that it is making
real progress towards democracy and human rights. We will continue to
monitor the situation very carefully.
I
wrote to the Committee about sanctions not long ago. I am pleased to
say that the European Union has decided to extend the common position
on sanctions for 12 months from April and to suspend the travel ban for
a further 9 months. In many respects, that reflects the mixed progress
that Belarus made during the first six months of the suspension; we
have our eyes wide open. That adds to my earlier point that there is
not one blueprint for the six countries. Those countries have different
aspirations in terms of their relationships with the EU, and we should
be up front about that. We expect certain standards, whether they are
in trade or other areas. There is certainly not one blueprint on the
starting line or what we expect of those countries, because the process
will be customised to the situation of individual
countries.
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