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Uncorrected Transcript of Scrutiny of European Documents To be published as HC 20-ii ___________________________________________________________________________
House of COMMONS EUROPEAN SCRUTINY COMMITTEE
SCRUTINY OF EUROPEAN DOCUMENTS
WEDNESDAY 17 DECEMBER 2008 Scrutiny of European Documents in Public
USE OF THE TRANSCRIPT
European Scrutiny Committee
Wednesday 17 December 2008 Members present Michael Connarty, in the Chair Mr Adrian Bailey Mr William Cash Mr James Clappison Mr Greg Hands Keith Hill Kelvin Hopkins Angus Robertson ________________
Chairman: We are now in public session. Can I first put on the record the Committee's thanks to all of our staff for their work over the last year. Angus Robertson: All of them? Chairman: All of them. Angus Robertson: Excellent. Good. Mr Cash: Could I also thank the stenographers for their diligence in making sure the public outside were able to hear what we were saying when we were in public session before the extremely regrettable action was taken to terminate the public sessions. Let us get that on the record! Chairman: We have had a number of staff who have come and gone. We are about to lose another member of staff, Anwen Rees, who is going to work on the structures in some way for the new Regional Committees. We have been joined by a new member of staff, Clare Cousins, who has been sitting in for the last few sessions. We are very grateful to them all, and all of the back office team who keep this Committee supplied with its paperwork and organise our logistics. We would not function as well if they did not function as well as they have done. We have welcomed a few new members of staff and we have put that on the record in earlier hearings. We have Karuna who has joined us over the year. With those words of thanks could we move on to the actual business. Again, I will take silence as assent to the proposals on any of these issues. A Briefs A1 Raw materials initiative (30202) This is to set out a strategy for securing Community supplies of non-energy raw materials. The recommendation is that we should clear it, draft chapter attached. Mr Hill. Keith Hill: Chairman, I consider this to be a very important document and an extremely important initiative on the part of the Commission. It concerns the future acquisition of raw materials to the industries of the European Union in an era of global challenge and sets out a number of very important steps towards securing these supplies for Member States in the future. It does seem to me that this is exactly the forward looking, proactive role that we expect the Commission to be adopting. I do think that it is such an important initiative that we perhaps should commend it more warmly to the attention of the House. Therefore, I have a form of words that I would like to propose to substitute for what I think is perhaps an insufficiently enthusiastic set of words in the conclusion as currently drafted. I would be very happy to read out this form of words. Mr Cash: Spare us! Chairman: Can I dissuade you from doing so. The point of this is that we think it is legally and politically important, it is an A Brief and it appears as a chapter in our report every week. We are here to scrutinise, not necessarily to give gold stars to initiatives from either the Commission or the ministries. Keith Hill: With respect, Chairman, it does seem to me that --- Chairman: I think your enthusiasm is on the record, Mr Hill. Keith Hill: --- quite often we are perfectly willing to express our reservations about the documents that we have before us in communicating them to the House and it does seem to me that where you have a good news story it is perfectly legitimate to make a rather more positive set of observations. Chairman: In the conclusion, which is paragraph 19, you are wishing to propose an addition to paragraph 19 of our draft chapter. Let us hear the proposal first and then we will see what happens thereafter. Keith Hill: I propose the deletion of the present words in paragraph 19 and their substitution as follows: "The document represents an excellent initiative by the Commission on the vital issue of the future acquisition of raw materials to the industries of the European Union. It proposes a common approach to this global challenge and sets out a significant series of steps towards securing these supplies. In clearing the document we commend it to the attention of the house". Mr Clappison: I feel so sorry for Mr Hill, not because of his motion but because I can obviously see this as the first of a stream of endless paeans of praise for the European Union. What a shame it is for him that from now on all our proceedings are going to be in secret so the world is never going to hear it. On second thoughts, he may not want the world after all to hear about all of these wonderful things the European Union is doing! Chairman: Can I put a procedural point, that if carried it will be in the draft chapter and produced in the bound volume next week for everyone to read. It is in the hands of the Committee. We have a motion. Mr Hill, first do you want to push it to a vote if necessary? Keith Hill: Can I listen to the debate and then decide. Angus Robertson: Can I say that on a matter like this I would probably take the same view as the right hon. Gentleman to the subject matter of the proposal by the Commission. However, I think what he is proposing goes beyond the remit of this Committee to establish the legal and political importance of a measure. If we were to feel that something is of such legal and political importance for the reasons that Mr Hill thinks in a positive sense, we have the opportunity to propose it for debate elsewhere or individually to take it for debate to Westminster Hall. I just think that the amendment and the way in which it is couched goes beyond the remit of the Committee, although I would find myself in sympathy with the point that he is trying to make. If we do not want the Committee to get bogged down every week in discussing how attractive or unattractive particular proposals are from the Commission, the Council or wherever, we are going to be sitting and debating these things for a long time in a way which is not the role of the Committee to do so. Although I would sympathise, and that is on the record, with the point that Mr Hill has made, I would not support his motion. Chairman: Follow discussion? Mr Cash: You are doomed! Keith Hill: When I looked around the room I knew I was doomed. I just want to say, Chairman, that I think my amendment would certainly underline the political importance of this proposal. My feeling is also that it is too soon to recommend these proposals for debate. Nevertheless, I think I understand the temper of the congregation and I accordingly withdraw my proposal. Chairman: Thank you, Mr Hill. Agreed Mr Cash: Defeat! A2 Maximum residue levels for veterinary medicinal products (28570) Chairman: A2 is to amend the procedures for setting maximum residue levels for veterinary medicinal products used in food-producing animals. We do not clear this and request further information. Agreed A3 Internal Market Information System (30184) This is to give a progress report on the development of the EC's Internal Market Information System. This is to clear, draft chapter attached. Agreed A4 Financial Services (30038) This is to amend the Regulation governing cross-border payments in euros. The recommendation is to clear. Agreed A5 Taxation (29962) (30169) A5, document (a) is to present a review of the Savings Directive. Document (b) is to amend the Savings Directive. The recommendation is that we clear document (a) but we do not clear document (b) and await further information. Agreed A6 Radio frequency bands for mobile communications (30215) This is to provide Member States and businesses with greater flexibility in the use of the radio spectrum based on the global system for mobile communication, GSM. It is recommended we clear this but ask for further information. Agreed A7 European Defence Agency (EDA) (30175) (30176) (30212) (a) Head of the Agency's Report on activities in the European Defence Agency. (b) Guidelines for assessing the report and recommendations about the direction of the European Defence Agency in 2009. (c) Agency's budget for 2009. The recommendation is we clear this with a report to the House. Mr Cash. Mr Cash: Just to say, I do think we ought to debate this in conjunction with some later business, which is A16, for the very simple reason that it is properly pointed out by our adviser that there is widespread interest in the development of the European defence industry and strategy and ESDP generally and that it also draws it to the attention of the Defence Select Committee, with which I certainly agree, but I think it ought to be debated. This is a crucial time in relation to scrutiny of defence at the European level. There is a vast amount of uncertainty about where NATO is going. There are more and more proposals coming out of the Presidency at present for a greater European defence component and I think this is the right time for us to be looking at this. There is Afghanistan, and one could go on. I think the real reason for doing it is for the reason that has already been suggested, which is that there is widespread interest and a debate would actually focus on all these matters. I am proposing that there should be a debate. Mr Clappison: I support it. Mr Cash has mentioned A16, if we could link A16 together with this, because A16 deals with the very important declarations which have been made at the European Council. As we know from A16, documents which should have been deposited with this Committee in advance of that to enable parliamentary scrutiny and possible debate to take place were not deposited, so we were therefore deprived of any opportunity of looking at this in advance. These declarations bear all the hallmarks of mission creep on behalf of the EU. Reading through the commitments which we have entered into, they are very far-reaching commitments which certainly do nothing to dispel the impression that a European Defence Policy, a European Common Defence is being put in place bit-by-bit, piece-by-piece. Mr Cash: And in advance of this Lisbon is also relevant. Mr Clappison: I was going to mention that as well, if I may, Chairman. Lisbon has very important revisions related to defence which we never had the opportunity of properly debating on the floor of the House. All of these changes on defence are going through without the House having an opportunity to debate them. I think it would be absolutely pertinent to have this debate, to link A16 and A7 together so we can have a debate on this. Angus Robertson: I think it is obvious why we are considering not only A7, which is where we are on the agenda, but we are now jumping ahead to A16 because there is a sense in which they are linked, the same subject and for the same reasons. I point out for the record that A16 is a report as opposed to a draft directive or such like. It is relevant, it is interesting, but it is only a report. Seeing as we are considering A16 as well as A7 at the present time, it is important to highlight there are a whole series of questions that are being prepared that we would wish to see an answer from the minister to and I would like to have those answers before moving this recommendation for a debate because it would be useful for us to have all these answers so that when we do get to that stage, and I would support having a debate on both these documents, we have those in our hands rather than calling for a debate and perhaps not getting them and having a debate before we might have those answers, if that makes sense. I am very supportive of the move for this to be debated, but the recommendation before us as it currently stands on item A16, because it is a report, is that we clear it because it is politically important but we ask for further information. There is a whole list of questions that we would wish to have answered as a Committee. I would like to have those answers as well as having a debate. Mr Clappison: I think that is reasonable as long as we have them within a reasonable timescale. Angus Robertson: Indeed. Chairman: Any other contributions to the debate? I think the proposal is we indicate that we wish this to be debated at some time but after we have the replies to the questions from the minister so we do not get cut off, as Angus said, in a debate without proper information. At some time after the minister has replied. Mr Clappison: But to have the answers within a reasonable timescale. Chairman: It would be quite nice to have the answers, the evidence session and then the debate because then we would have it all wrapped up. We would have the minister's evidence before and we would be able to use that in the debate. So we will not clear it, it is still under scrutiny. We are reporting to the House but we are not clearing it if we are going to hold it for debate in future. Is that agreed? Agreed A8 Intra-EU transfers of defence-related products (29271) This is to set out rules on the transfer of military equipment and supplies within the EU. The recommendation is that we should clear this. Agreed A9 The Eastern Partnership (30248) (30249) This is to propose a new relationship with the EU's six Eastern neighbours. The recommendation is that we do not clear this and ask for further information. Also that we tag it to the debate on EU-Russia relations. Mr Cash. Mr Cash: I very much endorse the views that have been expressed. It seems to me incredibly important because we have just debated, for example, the whole question of Bulgaria and Romania and it is all part of the general question about how enlargement goes. I understand that the Minister for Europe wants to have a debate on enlargement later. Really we should not clear this, we need to try and draw everything together into probably that one debate, I would say. Chairman: It is not cleared, definitely not. It will be tagged to the debate when we have it on the floor of the House. Agreed A10 State aid scoreboard - autumn 2008 updated (30200) This is to provide the latest update on the provision of state aids within the Community. The recommendation is that we clear this. Mr Hopkins. Kelvin Hopkins: On the record, while I accept the recommendation I take the very strong view that during this recession in particular Member States ought not to be constrained from using state aids as and when they choose to defend their own economies and to look after their own employment. It is very noticeable that Germany uses two and a half times as much state aid as ourselves. There is scope even for Britain to use state aid to a much greater extent than they do and when the recession gets really bad, as I think it will do, we should not be held back from using state aids as and when we think necessary and, indeed, other Member States think necessary for themselves. Chairman: I note your comments and remind people that those who do not study history are doomed to repeat it, if you look at the American depression that was caused by a protectionist attitude in the US. Sensible use of state money to innovate and create new products is much better than just producing things people do not want to buy, but hopefully that is not what you are suggesting. I take your point. Agreed A11 Financial Services (30168) This is to regulate credit rating agencies. The recommendation is that we do not clear this and await further information. Mr Hands. Mr Hands: I am concerned by this, Mr Chairman, and I am going to float the idea of putting this for debate. Credit rating agencies are an area of the current financial crisis that have attracted a great deal of attention and interest and, therefore, I do not think there would be a shortage of contributions to such a debate. I am concerned about the impact assessment. The Government is even suggesting that the impact assessment from the Commission is on the conservative side and there is a lot of criticism about this being quite hasty. I realise we do have a problem which credit rating agencies are said to be part of, and I am not necessarily disagreeing with that, but I think before we introduce any of these hasty draft regulations, and I realise that we are suggesting that we keep it under scrutiny, I think there would be merit in putting this to debate now given the large amount of interest in this House in the issue of credit rating agencies. Mr Cash: I would very much endorse those views, if I may. Chairman: I presume both of you have read the interesting discussion on the workshop on credit rating agencies in the National Parliament Office Bulletin this week which was very interesting. Mr Hands: Yes. Can I just add to that, Chairman. One of the witnesses at that workshop, if I am not mistaken, was the chairman of the US SEC, or somebody senior from the US SEC, and the US has also just introduced some legislation on credit rating agencies and I think we should have a look at that legislation. I just think there is enough material here for a Standing Committee debate rather than merely keeping something under scrutiny. Chairman: Is there anyone on the Committee opposed to that? Keith Hill: This does seem to me a slightly arcane area. Mr Cash: What? Keith Hill: I would be very surprised if there was widespread interest in credit rating institution arrangements in the House. If there is a genuine feeling around the table I would be interested to hear from other colleagues as to whether they really feel there would be a demand for a debate of this kind in the House. It does seem to me that we need to be a little cautious about how many matters we refer to debate. Already there must be quite a substantial backlog of debates arranged here and, as I have had occasion to remark frequently, the main attendees at these European Standing Committee debates seem to be Members of this Committee, which is an example really of navel gazing in my view. Angus Robertson: I think when Mr Hill came on the Committee I made the point then, as I have done with all Members who have come on the Committee, that I have always viewed our job here as making sure that we never end up in the circumstance that colleagues did 15 or 20 years ago when the so-called Fridge Mountain Directive went through this House when people did not examine a proposal closely and then there was a big problem. This is a draft regulation to deal with the regulation of credit rating agencies, organisations which failed patently in the run-up to the current financial crisis we are in. While the matter might be arcane to some people, I think it is something we would be remiss not to ensure is looked at as closely as possible by those who understand it. I am not counting myself as part of that, but it seems to me at the present time this is pretty closely associated with the troubles of the global and UK economy. Maybe the issue of who attends these Standing Committees is something that we should be turning our attention to ensure across the political parties there are colleagues who are interested in these things in the way that Mr Hill and myself are perhaps less directly involved so we ensure that the right people get there. I would be concerned that having flagged it up we would then say, "Well, we don't think it needs to be looked at". Chairman: I do not think we have any real serious opposition. Mr Bailey: I was basically going to say that whilst completely understanding and taking Mr Hill's point about the number of items being submitted, I think we have to recognise the failure of credit rating agencies was very significant in terms of the credit crunch and the global fallout there. Whilst it is arcane and probably there is not a huge amount of interest in it, the fact is it is very relevant to the situation that we find ourselves in and crucial that we move on an international front to have the right sorts of checks, balances and regulatory framework to prevent the thing happening again. I do think it is quite a decent opportunity to debate that, so I would support it. Chairman: I think we have general agreement. Can I just ask, Mr Hill are you happy to see it going forward for debate? Keith Hill: I would not be quite happy but I am not going to resist it. I am certainly not going to put it to a vote. Mr Cash: I just mention briefly Enron, the question of the recent Mr Madoff, whatever he calls himself, in America, the 50 billion fraudster, the question of Northern Rock and the Market Abuse Directive. This goes right to the heart of the way in which so many people have been misled into this fantastic financial crisis. Chairman: Mr Cash, I almost hear a volunteer in that tone of voice for this debate. I assume Mr Hands is wishing to volunteer. Mr Hands: I would also volunteer for this. I appreciate what colleagues are saying in agreement that this should be debated, but my main concern is that my knowledge of credit rating agencies is that in additional regulation of them there is a danger that we could be approaching this in the wrong way. Clearly there have been a number of mistakes by credit rating agencies but it is not obvious to me that increased regulation is necessarily the way to prevent those mistakes being made in the future. I guess we are getting into the merits of the proposal, but I think there is enough material for a debate here, Chairman. Chairman: I think we have agreed that we will send it for debate and the point was made very well by Baroness Cohen when she spoke at the Tripartite meeting. Mr Cash: A splendid contribution. Chairman: She is someone who has spent her life in banking and probably does understand the arcane machinations of these organisations. We are going for debate. We have one volunteer in Mr Hands. Any other volunteers for the debate? I think you need to speak to your whips, Mr Hands, because this problem of you volunteering and then not being nominated has to be cleared up on your own side of the floor. Agreed A12 Working time legislation (30061) This is to amend the working time legislation for road transport workers. The recommendation is that we do not clear it but wait for further information. Can I just indicate this is not the same as the Working Time Directive, it is working time legislation for transport workers which we do not have an opt-out on. Mr Cash: I am bound to mention that, of course, quite rightly, it is said here that the Government fears that this risks setting a precedent for further Community intervention in the enforcement of other working time legislation. Of course, there is the embarrassment of the fact that the Government's views, as expressed by the Prime Minister, have just been overturned by the European Parliament. I do not want to make too much of that, it would not be right or fair. Angus Robertson: To put it on the record? Chairman: That was almost in praise of the European Parliament, my goodness! Agreed A13 Research and Development (29896) This is to propose a legal framework for the establishment of "European Research Infrastructures" to provide the advanced and very expensive facilities needed for some research and development. The recommendation is that we do not clear and await the progress reports from the minister. Agreed A14 Energy efficiency: tyres (30193) This is to establish a tyre labelling system. The recommendation is that we do not clear and we await further information. Agreed A15 Public access to documents (29666) This is to amend Regulation (EC) 1049/2001 on public access to documents. The recommendation is that we do not clear but seek further information. Mr Cash. Mr Cash: Just simply to add to that, I think this is hugely important. We have a lot of this use of blanking out of documents. Sometimes it has to be the case with intelligence reports, but when it becomes too endemic it definitely interferes with freedom of information. Chairman: This is proposed to change that, I think. Agreed A16 European Security and Defence Policy (ESDP) Presidency Report (30250) This is to report on developments in European Security and Defence Policy during the French Presidency. The recommendation is that we clear it but we ask for further information. This is obviously a main area of discussion. We have the Minister for Europe, Caroline Flint, coming before us on 4 February and there are many relevant matters that could be put to her at that time. Mr Hands: Is there a timing set, Chairman? Chairman: 4 February, it will be at 2.30. What we need to do if we want to keep this alive for possible debate, which we generally do, is we should not clear it rather than clear it and then it will come back to us. Possibly the best scenario is if we had the written responses, the Minister's evidence and then the debate so we would be debating with the maximum amount of information. Agreed A17 Use of the Structural and Cohesion Funds to stimulate growth and employment (30230) (30229) This is to amend the rules of the Structural and Cohesion Funds so as to make them simpler and to encourage Member States to invest, in 2009, in environmental, infrastructure and employment-creation projects. The recommendation is that we clear this and the draft chapter is attached. Mr Cash. Mr Cash: I feel very strongly that we should debate this. This is a very crucial moment. There is the question of the issues that we discussed yesterday in relation to Bulgaria and Romania and the relationship of fraud to Cohesion and Structural Funds. There is the enlargement question which will also bring that into account which was also debated yesterday. We debated the whole implication of Cohesion and Structural Funds yesterday and the Minister wants a debate on enlargement which in itself also covers this question. The sums of money are enormous. I would suggest there is a very substantial reason that they do not really achieve their objectives in many, many respects. We are talking about €277 billion for the Structural Funds and the additional payments here for 2009 we understand would be 6.3 billion. I just feel very strongly that this a critical moment in relation to the whole question of the redistribution of resources throughout the European Union. Money is going down a black hole, much of it is to do with fraud. The accounting arrangements are inadequate. The Court of Auditors has just said, yet again, for the fifteenth occasion, I think, that irregularities and illegalities are not being properly monitored. For all of these reasons I think this would be a moment to catch the use of the Structural Funds for debate so that we can have a proper discussion. Chairman: Mr Cash, because everyone is being so well-disciplined and we are not here for two hours I let you go on, but in reality this is a minor simplification which is recommended. The debate would be on these minor simplifications, they would not be on the Structural Funds and Cohesion Funds. If it is exercising you so much, and it may be relevant, it may come up in the enlargement debate or it is a very good subject for a one and a half hour debate in Westminster Hall. Mr Cash: What I was really suggesting was that we tag this to the issue of enlargement and matters of that kind. Chairman: This is not relevant. This is a very small simplification. If it was on the whole gamut of Structural Funds and Cohesion Funds certainly, but it is a minor simplification. Mr Cash: I do not think €6.3 billion is a minor matter. Chairman: That is not simplification, so we would have to debate the simplification, not the 6.3 billion. Mr Cash: I am very, very keen on debating this, so I shall put it to a vote. Chairman: It is aye for this to go for debate and no for it to be cleared. Chapter Headnote read. Amendment proposed in line 20, to leave out the word "Cleared", and to insert the words "For debate in European Standing Committee". - (Mr William Cash). Question put, that the Amendment be made. The Committee divided.
Ayes, 3 Noes, 3 Mr William Cash Mr Adrian Bailey Mr Greg Hands Keith Hill Kelvin Hopkins Angus Robertson
Whereupon the Chairman declared himself with the Noes.
It is 3:3 and I give my casting vote for the recommendation. It is cleared. Agreed We are now going to move on to B Briefs which are matters which are of insufficient legal or political important to warrant a substantive report to the House. The recommendation is to clear. I will read the numbers and I will take silence as assent. B1 EC Financial support for SMEs (30165) Agreed B2 Single European Sky (30185) Agreed B3 Consumer protection (30209) Agreed B4 Value added taxation (30179) Agreed B5 Fisheries guide prices for 2009 (30220) Agreed B6 Cohesion Fund (30207) Agreed C Briefs C Briefs, summary briefs only provided and the recommendation is to clear. C1 EC-Republic of South Africa Agreement on Trade, Development and Cooperation (30201) Agreed C2 Imports of certain broad spectrum antibiotics originating in India (30260) Agreed C3 Imports of monosodium glutamate originating in the People's Republic of China (30261) Agreed C4 Imports of citric acid originating in the People's Republic of China (30262) Agreed C5 Annual Reports of the Community Plant Variety Office for the financial year 2007 together with the Office's replies (30136) Agreed C6 Fishing opportunities for certain fish stocks applicable in the Black Sea for 2008 (30231) Agreed C7 Fisheries Partnership Agreement with the Republic of Guinea (30235) Agreed C8 Draft Directive on wheeled agricultural or forestry tractors (30223) Agreed Pre- and Post-Council Scrutiny Pre-Council Annotated Agenda Employment, Social Policy, Health and Consumer Affairs (EPSCO) - Health items (16 December 2008) Pre-Council Written Ministerial Statements EPSCO - Health and Consumer Affairs items (16 December 2008) EPSCO - Works and Pensions items (17 December 2008) Post-Council Written Ministerial Statements Competitiveness Council (1-2 December 2008) ECOFIN Council (2 December 2008) Environment Council (4 December 2008) EU Energy Council (8 December 2008) GAERC - General Affairs Council (8 December 2008) EU Transport Council (9 December 2008) Chairman: If there are no comments can I thank everyone for their efforts over the last year. As the Chair, I have to say I am disappointed that it did not work as maybe people aspired it should work when we had public sessions and we are now finishing our final public session. I think maybe if people had either understood or approached it differently during the period in which it first worked we might not be where we are now, but we are where we are and we are ending our final public session. The meeting has finished. |