Draft European Union (Definition of Treaties) (Stabilisation and Association Agreement) (Republic of Serbia)
Order 2011

The Committee consisted of the following Members:

Chair: Mr Edward Leigh 

† Barclay, Stephen (North East Cambridgeshire) (Con) 

† Chapman, Mrs Jenny (Darlington) (Lab) 

Corbyn, Jeremy (Islington North) (Lab) 

† Crabb, Stephen (Preseli Pembrokeshire) (Con) 

† David, Mr Wayne (Caerphilly) (Lab) 

Dodds, Mr Nigel (Belfast North) (DUP) 

† Farron, Tim (Westmorland and Lonsdale) (LD) 

† Glen, John (Salisbury) (Con) 

† Graham, Richard (Gloucester) (Con) 

† Hamilton, Mr David (Midlothian) (Lab) 

† Lidington, Mr David (Minister for Europe)  

† Mitchell, Austin (Great Grimsby) (Lab) 

† Mosley, Stephen (City of Chester) (Con) 

† Patel, Priti (Witham) (Con) 

† Roy, Mr Frank (Motherwell and Wishaw) (Lab) 

† Stride, Mel (Central Devon) (Con) 

† Stuart, Ms Gisela (Birmingham, Edgbaston) (Lab) 

† Williams, Roger (Brecon and Radnorshire) (LD) 

Anne-Marie Griffiths, Richard Benwell, Committee Clerks

† attended the Committee

Fourth Delegated Legislation Committee 

Monday 28 February 2011  

[Mr Edward Leigh in the Chair] 

Draft European Union (Definition of Treaties) (Stabilisation and Association Agreement) (Republic of Serbia) Order 2011

4.30 pm 

The Minister for Europe (Mr David Lidington):  I beg to move, 

That the Committee has considered the Draft European Union (Definition of Treaties) (Stabilisation and Association Agreement) (Republic of Serbia) Order 2011. 

It is good to have the opportunity to serve under your chairmanship, Mr Leigh. The stabilisation and association agreement—SAA in short—is an international agreement between Serbia, the European communities and its member states signed on 29 April 2008. The treaty has not yet entered into force. It will do so once Serbia, the European Union and all 27 member states have approved it in accordance with their respective procedures. Fifteen EU member states have so far ratified the SAA, as has Serbia, which ratified it on 9 September 2008. With regard to EU ratification, the European Parliament gave its consent on 19 January 2011 and a further unanimous Council decision will be required in order for the EU to conclude the SAA. 

The order is a necessary step towards the United Kingdom’s ratification of the SAA, as it will provide for implementation of the agreement as an EU treaty. The principal effect of the draft order is twofold. First, it will ensure that the powers under section 2 of the European Communities Act 1972 will be available to give legal effect to any necessary provisions of the agreement in this country. Secondly, it will permit any expenditure arising from the SAA to be charged on and issued out of the consolidated fund. 

Enlargement has been one of the European Union’s biggest success stories. I add that that success has, from the start, been championed by successive Governments in the United Kingdom. The enlargement of the European Union has enabled stability, security and prosperity to be entrenched across our continent, including in countries in eastern and central Europe, where those values and traditions were crushed for most of the last century. The prospect of EU membership was an important factor in supporting the peaceful transition to democracy in Greece, Spain, Portugal and throughout the former iron curtain countries of central and eastern Europe. It is a vital tool in helping us to spread democratic values and freedoms. At the same time, a larger European Union promotes business and our economy by providing access to a bigger market with reduced trade barriers. 

However, I want to make it clear that the Government also believe that enlargement must be based upon conditionality. A country may join the European Union only once it has met all the criteria for membership and

undertaken the necessary reforms to enable it to do so. That applies to Serbia and all western Balkans countries, just as it does elsewhere. It is Serbia that has to adapt to the required EU conditionality, not the other way round. 

The implementation of the stabilisation and association agreement is an important step in fulfilling that conditionality. The SAA recognises Serbia as a potential candidate for the European Union. It is not some kind of reward, rather it is an instrument that enables Serbia to move forwards, setting out objective political and economic criteria, which Serbia must meet and has agreed to meet. 

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab):  In discussing this instrument, it is clear that Serbia is not there yet. Does the Minister share my regret that we have just ceased World Service broadcasting in Serbia? 

Mr Lidington:  Decisions on World Service broadcasting were taken by the BBC in light of the budgetary settlement available to it and its assessment of where the priorities ought to be in terms of priority audiences and the type of broadcasts to which people from various parts of the world have access. It is a truth today that people in the western Balkans already have access to many different perspectives from television and radio services in different parts of the world. The BBC, I think, would argue that it should give preference to services that supply those populations around the world that do not have such access. 

The Chair:  Order. We are starting to stray from the point. I am not sure that the BBC is part of this. 

Mr Lidington:  It is certainly the case that there is no reference to the BBC or the World Service within the text of the order or the stabilisation and association agreement. 

The progress that Serbia must make towards eventual European Union membership is regularly monitored via a closer partnership with the European Union under the SAA, and a track record of SAA implementation is one of the requirements for Serbia to achieve candidate status. The full, effective and transparent implementation of democracy and the rule of law is an example of the criteria that Serbia must meet as an essential element of the SAA and for eventual EU membership. Other criteria include good co-operation on regional issues and international obligations. Conformity with common human rights law, including the protection of minorities, and full co-operation with the International Criminal Tribunal for the former Yugoslavia. 

I want to underline that last point as it has, in the past, been a matter of some concern in this House and in other European Union countries. Serbia’s interim agreement and the SAA were signed by EU member states at the General Affairs and External Relations Council in April 2008. However, at that same meeting, a decision was taken to block the implementation of the interim agreement and the ratification procedures of the SAA pending an assessment by member states that Serbia was fully co-operating with the ICTY. Following successive positive reports from the chief tribunal prosecutor, Mr Brammertz, member states agreed to proceed with the SAA ratification in June 2010. 

On 25 January, I wrote to the Scrutiny Committees to inform them of the Government’s assessment that Serbia was continuing to co-operate fully with the ICTY following Brammertz’s latest report in December 2010. We are, therefore, content that the United Kingdom should proceed with ratification, but I will continue to update the Scrutiny Committees each time the prosecutor issues a further report, the next one of which is expected in May this year. 

Since the conflicts of the 1990s, Serbia has made significant progress, especially in establishing good relations with its neighbours, but this progress needs to continue. The draw of EU integration will continue to be a crucial factor in motivating and enabling Serbian political leaders to continue to agree and implement the necessary reforms and to continue in the process of reconciliation with all of its neighbours and with the rest of the western Balkans region. I commend this order to the Committee. 

4.38 pm 

Mr Wayne David (Caerphilly) (Lab):  It is a pleasure to serve under your chairmanship, Mr Leigh. The Opposition have no disagreement with the Government in supporting this measure today. In fact, we very much support the enlargement process of the European Union. As the Minister has accurately said, there has been a bipartisan approach towards enlargement for a long time, and it has been regarded as a United Kingdom priority inside the European Union. It is particularly important that we continue to place an emphasis on the importance of enlargement both with regard to Turkey, which is often referred to, and the western Balkans, which is less often referred to, particularly in regard to Serbia. We all saw the horrific war and devastation that occurred in that part of Europe not so long ago. It is essential that we do everything we can to ensure stability and change, and to ensure that those countries that make up the western Balkans are in a position to join the European Union in the not too distant future. 

I have a number of questions. The Minister has already touched upon the first, which is about time scale. When I received the documentation, I was, initially, slightly concerned about the long time scale, which ran from 29 April 2008, when Serbia signed the stabilisation and association agreement, until June 2010, when the Council launched the ratification of the SAA by the European Parliament and EU member states. The Minister has talked about the International Criminal Tribunal for the former Yugoslavia—the ICTY—but that work needs to be continued. There is particular concern about the fact that two individuals—Ratko Mladic and Goran Hadžic—have yet to be apprehended. Is there anything further that the Minister can say about the efforts being made, or not being made, in Serbia to apprehend those two individuals? It has been suggested that Mladic was seen at a football match in Belgrade a couple of years ago, and that he has been seen on more than one occasion in Moscow. Is there any information on that? Reference has been made to Russia. Vladimir Putin plans to travel to Serbia in the not too distant future, so has there been any dialogue with Russia, or is there any need for such dialogue? Taking measures against those two individuals is certainly important. 

The Chair:  Order. I do not want to cramp the hon. Gentleman’s style, but there is a lot of history in Serbia over the past 10 or 15 years. It is fine to illustrate points,

but let us not have a debate about the entire Serbian problem. This is a very narrow order, so will he get back to it? 

Mr David:  I hear what you are saying, Mr Leigh, but I think that I am making a valid point that is central to the purpose of the stabilisation and association agreement. 

My second point relates to the progress being made in relation to the Roma population as a result of the order and other measures. The European Commission’s report from a few months ago indicated great concern about the Roma minority’s situation, stating that 

“the Roma minority continues to face discrimination”, 

and that the 

“majority of the Roma population lives in extreme poverty and continues to face discrimination in particular as regards access to education, social protection, health care, employment and adequate housing” 

in Serbia. Do the British Government fully acknowledge the concerns expressed by the Commission about the Roma population? Has close monitoring taken place to ensure that their position improves? 

Not so long ago, we discussed in Committee the situation in Kosovo. The interface with Serbia is of particular importance, and I am sure that the Minister shares my concern that it remains reluctant to have a positive relationship with Kosovo. Indeed, the Serbian Government continue to contest Kosovo’s declaration of independence, and are putting up material barriers to prevent practical discussions from taking place in the western Balkans about Kosovo’s future relationship with its immediate neighbours. Will the Minister say a few words about the situation in Kosovo and its relationship with Serbia? 

My final point is fundamental and concerns economic progress in Serbia. Like everywhere else in the world, Serbia has been hit hard by the global downturn. It is a cause of concern, however, that in Serbia the downturn has led to a relaxation of the progress towards economic liberalisation. Serbia traditionally has a centralised, state-owned, almost command economy. To ensure that it is able to put forward a viable application for membership of the European Union, it is essential that methods of liberalisation are taken forward. Will the Minister comment on the concerns over how certain privatisation measures have apparently been put on hold, and how the country’s excessive red tape is still an impediment to the development of entrepreneurship? Does he share my concern about the lack of support and encouragement given to entrepreneurs? We all recognise that it is those entrepreneurs who will take Serbia forward and make it a more prosperous country that at some time in the future will play a full role in the European Union. 

In conclusion, the Opposition support the order. I welcome the Government’s active involvement in the European Union and their support for the process of enlargement. I would also welcome clarification from the Minister on the points that I have raised. 

4.47 pm 

Stephen Barclay (North East Cambridgeshire) (Con):  I have two quick questions. First, I note that the explanatory notes do not mention a single cost figure. As someone who sits on the Public Accounts Committee, it would be helpful to have a sense of the numbers involved. I

welcome what is being proposed, but will the Minister give us a sense of the impact that this measure will have on the European Union budget? Presumably there will be an impact in terms of assistance, co-operation, staff time and other budgets, whether that is the European investment budget underwriting investments in Serbia, or other measures taken as part of the movement towards membership. 

Secondly, the treaty takes a different approach by abolishing customs duties in the EU, but downscaling and keeping them for a period within Serbia. Will the Minister give us a sense of the current balance of trade between the UK and Serbia, and tell us what impact the abolition of those customs duties will have? I assume the reason they are not mentioned is because they are very modest. 

4.48 pm 

Roger Williams (Brecon and Radnorshire) (LD):  The summer meeting of the Parliamentary Assembly of the Organisation for Security and Co-operation in Europe will be held in Belgrade. That organisation could play a fundamental and important role in supporting Serbia’s advance towards a fully-democratic system that meets some of the requirements for membership of the European Union. Does the Minister know of any way in which that organisation could play a part in supporting Serbia? 

4.49 pm 

Mr Lidington:  I am grateful to the hon. Member for Caerphilly and to my hon. Friends the Members for North East Cambridgeshire and for Brecon and Radnorshire for their comments and questions. I will write to my hon. Friend the Member for Brecon and Radnorshire with a detailed answer to his point. I hope I will be able to respond to the points raised by my hon. Friends and by the hon. Member for Caerphilly, but if I overlook something or if they wish to ask for further details, either through an intervention or after the debate, I will do my best to supply them. 

Mr Frank Roy (Motherwell and Wishaw) (Lab):  Will the Minister write to every Member here, rather than just the one who asked the question?

Mr Lidington:  I am happy to do that. I propose to write to my hon. Friend the Member for Brecon and Radnorshire and copy that letter to other members of the Committee. 

Perhaps I may deal first with the points raised by my hon. Friend the Member for North East Cambridgeshire and then proceed to those raised by the hon. Member for Caerphilly. 

Current levels of trade between this country and Serbia are fairly small, but they are not insignificant. The most recent figures that I have are for January to November 2010. In that period the United Kingdom exported £80 million of goods to Serbia. That was a 4% decline on the previous year. We imported £79 million of goods from Serbia, which was a 28% increase on the same period in 2009. There was therefore a more or less equal balance of trade. The main imports from Serbia to the United Kingdom include iron and steel,

fruit and vegetables and rubber. Our main exports to Serbia are machinery, paper, road vehicles, medicinal and pharmaceutical products and telecommunications equipment. 

I shall see about writing to my hon. Friend, with copies to the rest of the Committee, about the potential impact of the relaxation of tariffs, but in the big picture I do not think that that will be all that significant, in the light of the current figures for trade. Clearly it is our hope that as the modernisation of the Serbian economy proceeds, and trade policies take effect, Serbia will be able to export more of its goods and services to the European Union; but we also hope that Serbia, in becoming more prosperous, will be a more attractive and profitable market for enterprises in this country, and among existing EU member states. 

My hon. Friend asked about the impact that Serbian accession, or the pre-accession process, might have on the EU budget and thus on the UK’s contributions to that budget. The answer is that the EU will continue to fund assistance for Serbia, as it does at the moment, through what is called the instrument of pre-accession. However, the IPA must be funded within the overall budgetary ceilings that have previously been set—so it must come within the multi-annual financial framework that is agreed for a seven-year period, or perhaps, in future, a slightly shorter period. 

Agreement on that matter is subject to unanimity on the part of all member states. Within each multi-annual financial framework any IPA spending in a particular financial year must come within the annual budget of that 12-month period. The annual budget is set by qualified majority vote, rather than with a requirement for unanimity, but annual budgets must themselves come, over the period in question, within the firm ceiling set by the multi-annual financial framework. 

The EU will have to fund help for pre-accession countries within the budget that it has agreed among the various member states, and the United Kingdom’s contribution to the European Union works out at roughly 14% of EU revenue and therefore of EU spending overall. We do not—and indeed there is no means to—earmark United Kingdom contributions to particular items of European Union expenditure. We work on the basis that our 14% contribution will represent a 14% share of any programme that is agreed. 

The key point is that nothing in the agreement necessitates an increase in the budget. Indeed, we shall argue, in both the multi-annual and the annual negotiations, that the EU must set clear priorities, and that sensible conditional help for pre-accession countries should be among those priorities. However, those sums will have to be found in what need to be tight budgetary ceilings that fully respect the difficult fiscal retrenchment policies that not only the United Kingdom but pretty well every other member state has to implement domestically.

Stephen Barclay:  I thank my right hon. Friend for that helpful clarification, and he may need to write to me on this. I fully accept that the UK contribution averages out at 14%, if that is the figure he is suggesting, but I am not clear what the measure’s cost will be over the coming years. Activity is clearly ratcheting up, so there must be an associated cost estimate for the staff time, the budget and the additional spending. That is the figure I seek clarification on. 

Mr Lidington:  I will write to my hon. Friend to make sure that he has absolute clarification on the detailed point that he puts to me. 

The hon. Member for Caerphilly asked four questions. On the time scale and co-operation with the ICTY, EU member states adopted a deliberate policy during the time of the previous UK Government—it is supported by the new UK Government—that progress should be clearly and demonstrably linked to a proven readiness on the part of the Serbian Government to work fully with the ICTY’s prosecutors and to put to rest any doubts that Serbia might not be serious about finding and bringing to justice the remaining two fugitives. We have looked closely at the reports that Mr Brammertz has brought forward, I have met him and he has given reports in person to meetings of EU Ministers. The current Government have not, therefore, treated this condition in any way lightly, just as the Government in which the hon. Gentleman served treated it with great seriousness. 

The history behind the issue is that the agreement was originally signed in April 2008, but it was then put on hold pending an assessment of co-operation with the ICTY. Chief Prosecutor Brammertz gave an initial, positive report in December 2009, after which the European Council agreed to implement the interim agreement and to come back to the ratification of the stabilisation and association agreement after a further six months. The interim agreement came into force on 1 February 2010. Mr Brammertz came back to the Foreign Affairs Council on 14 June 2010 to give Foreign Ministers an assessment of the extent of Serbia’s co-operation with the ICTY. His report was favourable, and it was at that point that EU member states agreed to go ahead with the ratification of Serbia’s SAA. 

However, Chief Prosecutor Brammertz continues to monitor Serbia’s progress. He issued a further report in December 2010, maintaining the positive view that Serbia continues fully to support existing ICTY trials. He did say that 

“Serbia’s efforts to apprehend the two remaining fugitives…remain problematic”, 

but his report also stressed that those words were not intended as a criticism of Serbia’s political willingness to help find them. The reality is that the remaining fugitives have a network of supporters who are loyal to them and who seek to conceal them from the authorities. It is not an easy or straightforward matter for the Serbian authorities or anybody else to track them down, but we and other EU member states continue to give our full support to the Serbian authorities and the ICTY in seeking to bring those remaining fugitives to justice. Our position on that is well known among Governments of other countries. 

Secondly, the hon. Gentleman asked about Serbia’s progress on human rights and, in particular, on the treatment of the Roma people. As he will know, the communication that the European Commission presented on Serbia and the other candidates for EU membership towards the end of 2010 concluded that Serbia had made huge progress on human rights and anti-discrimination in terms of adopting the appropriate legislation, policies and declarations. However, the problem lay in implementing those good intentions. I refer the Committee to the Commission’s report, which said:

“Concerning human rights and the protection of minorities, the necessary legislation is in place.” 

The report also said that constitutional and legislative provisions were in place for the protection of freedom of expression, as were guarantees allowing for the freedom of religion, and that legislation protecting social and economic rights was, broadly, in place. However, in each of those categories, the Commission report went on to say that there were still significant problems with translating legislation and constitutional guarantees into effect on the ground and changing the culture of Serbian politics and society. 

Progress on the issue is clearly still needed; we regard it as important. I think that the hon. Gentleman would be the first to accept that among existing EU members, not excepting the United Kingdom, problems of discrimination persist. It would be wrong to damn the Serbian Government or Parliament because legislation or constitutional guarantees are sometimes defied. My undertaking to him is that we, along with our partners, will continue to monitor progress on the treatment of the Roma, and human rights more generally, as Serbia’s accession proceeds. 

On Kosovo, it has been important to us to make it clear that we see both Serbia and Kosovo as sharing a European perspective as independent EU member states, and we want Serbia and Kosovo to move in due course towards full EU membership. It would be foolish to expect Serbia to recognise Kosovo quickly and dispatch an ambassador to Pristina. What is needed to start to overcome a history of enormous bitterness and mistrust is a dialogue between Serbia and Kosovo, initially at a low level, about practical matters affecting the well-being of people on both sides of the border. 

I am pleased that both Serbia and Kosovo are ready to engage in the EU-facilitated dialogue that will begin that process. We do not expect Serbia’s SAA to have a direct impact on Kosovo, but we believe that the future of both countries lies in the EU, a principle recently reaffirmed by all EU member states. Kosovo takes part separately in the stabilisation and association process, and has a stabilisation and association process dialogue that mirrors the political dialogue parts of the SAA. We look for Kosovo to make progress towards a formal stabilisation and association agreement when it has met the technical requirements. The dialogue has been put on hold somewhat because of the Kosovan elections. We hope that the delay, first in rerunning ballots in a certain part of the country and secondly in forming a new Government, is now over and that that there will be rapid progress in that dialogue from now on. 

Finally, the hon. Gentleman asked me about the economy of Serbia and he expressed fears that, because of Serbia’s current economic difficulties, it might be reluctant to embark on the economic reforms that are necessary. I welcome and indeed I share his ambition to see a move towards greater privatisation of the Serbian economy. 

The 2010 Commission progress report does not justify the pessimism that came through in the hon. Gentleman’s remarks. The Commission reported that Serbia’s economy was slowly regaining stability following the recession. What is true is that Serbian unemployment is rising. The message to Serbia is that reform and restructuring of its economy is essential if it is to meet the competition that it can expect to face both from within the EU, as the barriers come down, and globally. Therefore, although there will be challenging decisions for Serbia to make as

it embarks on that process of economic reform and although it is right for the EU to support Serbia through that process, it is in the interests of the Serbian people that Serbia concludes a successful programme of economic modernisation. 

Mr David:  I agree completely with what the Minister has said. I was just slightly concerned that he thought my comments were somewhat pessimistic. They were not intended to be pessimistic. I simply wanted him to give the type of commitment that he has just given, that this Government are full square behind the EU in its efforts to ensure that Serbia continues the process of change. 

Mr Lidington:  I am happy to give the hon. Gentleman that assurance. 

My final point is that it is the prospect of accession to the EU that is by far the most important driver of both economic and political reforms within Serbia. The Government believe that those reforms are not only profoundly in the interests of the Serbian people but in the interests of political stability and peaceful development in the Balkans region as a whole. In turn, those regional interests are very much in the national interests of the UK. So we wish Serbia well as it makes progress on the stabilisation and association process and we also wish it success in its striving towards full EU membership. 

Question put and agreed to.  

Resolved,  

That the Committee has considered the Draft European Union (Definition of Treaties) (Stabilisation and Association Agreement) (Republic of Serbia) Order 2011. 

5.8 pm 

Committee rose.