Examination of Witness (Questions 79-106)
Sir John Grant KCMG
15 December 2010
Q79 Chair: Sir John, welcome
to the Committee. As you know, we've been taking evidence from
constitutional experts on the sovereignty question, and we've
also had some political scientists to give a broader analysis.
What we'd like to do today with you, if we may, is to look at
the question of what goes on inside the system. It's somewhat
opaque to many of us, but no doubt your evidence will throw some
interesting light on what is going on and how you see it going
on under this Bill. So I'll ask the first question, which is
basically this: how would you describe the United Kingdom's influence
as a negotiator in the Council when you were the Permanent Representative?
Did we actually punch above our weight? What factors do you
think gave the UK credibility and influence in the Council, and
what would take that credibility and influence away?
Sir John Grant:
I'm not sure I'm a neutral witness on that point, Chairman, but
I'll do my best to be one. This is a subject I've thought quite
a bit about over the years, so I hope I can give you an answer.
My answer might strike you as a little long, but it may be relevant
to some of your other questions judging by the evidence session
with Professor Hix, which I've read. On this question of punching
above our weight, I think it's quite important to be clear about
the metaphor. In other words, is it one boxer versus another
in a ring, or is it something slightly more unruly—a whole
bunch of people fighting with one another?
I think the most important point of departure for
understanding the UK's position in the European Union is to recognise
that on a range of quite big issues, which tend to define Member
States' political positions, we start off in a natural minority.
Let me just give you two or three examples. The first point
is I think the most important and most relevant to the deliberations
of this Committee. If you look at the development over an extended
period of the national political institutions of the Member States
of the European Union, it's clear that very, very few—a
handful—of those Member States have national political institutions
that historically have been a success and have endured. The United
Kingdom is one. If you look at Europe and the history of the
20th century, there are very few others. Now I think that's been
very, very decisive in shaping the attitudes of other Member States
of the European Union and the United Kingdom's attitude to questions
of political integration.
I could give you quite a long list of similar considerations:
the structure of our agricultural sector, the fact that we have
a Common Law system, the structure of our economy, the role of
the City, our relations with the rest of the English speaking
world, the nature of our foreign policy etc. So we start off
in a different place to the majority of our partners on a lot
of big issues. Now that's changed a bit with enlargement and
I suspect we'll come on to enlargement—judging by your exchanges
with Professor Hix—and I'll touch on that then. Nevertheless,
it remains broadly true. Given that, I think that we have often
been able to exercise influence disproportionate to that starting
position. I'll give you a couple of examples in a moment.
I think that influence derives from three main things:
first of all, the efficiency and effectiveness of our diplomacy—in
other words, our arguments and our ability to work the system.
I think we've been good at that, and I think if you were to go
to Brussels or Paris or Berlin, you would find that everybody
thought that we'd been a bit too good at that actually. We can
come back to that if you like. This is not a smart comment on
anything to do with the current Government, I absolutely assure
you of that, but when I was in Brussels the Prime Minister of
the day had some strong political relationships in other European
capitals. Not so much the obvious ones such as Paris and Berlin
but others, and he used these to effect. Now, what did that mean
in practice? I'll give you a couple of examples. I was in Brussels
during the period of the no votes, one of the many crises of the
European Union—and they're very frequent of course. There
was a lot of hesitation about continuing with enlargement because
it actually suited quite a lot of people in the European Union
to ascribe the no votes, the lack of support for the constitutional
treaty, and the general sense of malaise to the enlargement project.
We succeeded, not alone but working with the Commission and some
other Member States, in maintaining momentum behind enlargement
when a lot of other Member States would have liked to slow it
down or stop it.
Secondly, if you look back at the records, climate
change became a top priority for the European Commission in the
autumn of 2006, leading to the decisions of the March European
Council of 2007, under the German Presidency, to set the targets
that the European Union has on climate change. Now that was a
very rapid change. If you look back at the public statements
for instance of the President of the Commission in the middle
of 2006, climate change was not a factor. By the autumn of 2006,
it had become one, and by March 2007, we'd taken some very farreaching
and significant decisions. I like to think that British diplomacy
and influence was behind that.
So there are some examples. I don't think this is
open and shut; you can't demonstrate it beyond doubt. My best
test is if you go elsewhere in Europe and say, "Do the Brits
get a better deal than they deserve?" most people will say
yes.
Chair: Thank you very
much.
Q80 Penny Mordaunt: I
wanted to ask you what difference you think part 1 of the Bill
would have made to the way you operated as the UK's Permanent
Representative?
Sir John Grant:
I think very little. By definition, the working groups of the
Council, the Committee I sat on, and indeed the Council of Ministers,
are working within the competence of the European Union. Now
that doesn't mean there aren't disputes about competence. There
have been occasions when the United Kingdom, for instance, has
taken a different view from the majority of Member States and
the Council Legal Service on where the EU has competence, but
you can't negotiate on legislation if there isn't competence.
Since the Bill concerns itself with changes in competence or
changes in voting procedure, I think it would have made no difference.
If I can just add a point that may be implicit in your question:
except at political level, principally in the European Council,
occasionally in Ministerial Councils, but certainly among officials,
negotiations in Brussels take place on the merits of the issue.
We form alliances of convenience in order to pursue the national
interest. So, if this was behind your question—and it might
have been—a Permanent Representative of another Member State
doesn't sit there thinking, "Those Brits have got this unpleasant
piece of legislation and therefore I'm not going to support them
on this issue." If it happens to suit him for his negotiating
purposes he will do so, and vice versa. So I think it would have
made very little difference.
Q81 Michael Connarty:
Sorry, I was slightly late. Welcome, and thank you for taking
the time to come and see us. I'd like to ask about the idea of
having a whole wedge of issues that are subject to a second control
mechanism, like our referendums and all these things in section
4 and section 6. In your experience, do you think that they will
be viewed by other members of the Council and the people you worked
with in COREPER as an extra barrier and difficulty in dealing
with what in many cases will be qualified majority votes, eventually,
on a lot of these issues? I'm trying to get into my mind, if
we pass this Bill and into an Act, what that will do to the way
decisions are made in the Council. I don't know if you've thought
about the new environment where there's clearly a lot more influence
from the Parliament and a lot more troika meetings. Is it troika
meetings where they actually get together and deal with final
difficulties of final drafts?
Sir John Grant:
Yes.
Michael Connarty:
How do you think this will affect that process? The Government
says it's signalling to people that Ministers are not free agents.
When they go to the Council, they may be called back to put their
views to a vote of the people.
Sir John Grant:
I understand exactly why—and I've tried to do this in my
mind too—it would be good if one could give a general answer
to that. But I think it is quite difficult, because the only
way of doing it is to look at the specific areas of competence
covered by the Bill; in other words, those areas where, in practice,
it seems extremely unlikely that we will be able to make a transition
from unanimity to qualified majority. At least, that is the conclusion
that other Member States and Commission will draw.
The question you then have to ask is: are any of
these issues ones to which the rest of the EU, if we can call
it that, is going to attach a very strong political priority?
Or are they going to shrug their shoulders and say, "Well,
we are not going to be able to make progress on this. Does it
really matter? Is it existential, either for us as a Member State
or for the European Union?" I think at the moment the answer
would be that none of those issues fall into that category. I
am, as it were, looking at this from a technocratic point of view,
but in the end this is a political—I was going to say this
is a political union, but I shouldn't use that expression in this
Committee. But the European Union is driven by politics, and
if you go through the specific issues that are caught—if
that's the right word—by the Bill and say to yourself, "Well,
where are the interests in Brussels that are going to rise up
and feel like the United Kingdom is frustrating an essential piece
of legislation?", I think, subject to one point, which I'd
like to make now, if I may, we are not in that situation now.
I can't rule it out for the future, because anyway, this Government
has been fairly categorical about its refusal, irrespective of
the Bill, not to countenance this. So I'm not sure it changes
very much on a view of a few years.
What is it that the European Union is preoccupied
by at the moment? It's the financial crisis and the future of
the euro. The reason, therefore, that I don't think this Bill
will impact on the major preoccupation inside the EU at the moment,
on my reading of it and my reading of the treaties—remember
I'm out of the game now, so I've had to mug up on this—is
it doesn't seem to me the Bill will have the effect of frustrating
that, because of the arrangements that apply to the United Kingdom
and the terms of the Bill. I think that's the fundamental point.
But I'm not absolutely certain about that, because I haven't
had the chance to get expert advice, but I think that's the key
issue.
Q82 Michael Connarty:
You were going to enter a caveat; you said "with one exception."
Sir John Grant:
That's my euro point. If you look at the politics of, let's call
it Brussels by shorthand—the rest of the European Union
as a whole—the issue is the euro and the future of the euro.
For instance, on Saturday in the Financial Times, there
was an article, I think from a Franco-German summit the previous
day, saying that Angela Merkel and Sarkozy had called on their
eurozone partners to draw fundamental lessons from the debt crisis
and take steps towards political integration. When you read the
article, it wasn't political integration in the historical sense
of the world, but that's the issue of the day and I suspect several
years to come. If a situation were to arise where the United
Kingdom by virtue, for any reason, was to set an immovable roadblock
in the way of changes that the members of the eurozone thought
were necessary, then I think that that could have a very significant
impact on our relationship with our partners and on work in a
broad range of contexts in Brussels. Subject to that, I myself
don't see a major issue. There may be specific issues, but I
can't identify them I'm afraid.
Q83 Chair: Could I perhaps
offer you one? I have an amendment down to the Bill relating
to the proposals for having an Act and a referendum. This relates
to the treaty proposal relating to the application of the financial
stability mechanism. What I've proposed is that any extension
of the use beyond the Republic of Ireland—i.e. down the
road to Portugal or Spain—would require an Act or a referendum,
where you would therefore have a natural convergence of political
and economic requirements in our national interest, together with
something that does impinge on the euro and its stability in terms
of whether or not there would be a bail-out for Portugal and for
Spain or anybody else. Now, don't you think that is the kind
of situation where—I am asking you for an opinion about
whether there should be a referendum—there would be quite
a lot of very serious reaction on the basis that the UK was going
to say "so far and no further," in terms of financial
bail-out.
Sir John Grant:
Yes, I mean, the devil is always in the detail of these things,
and I'd have to think it through. I go back to my general point:
if by virtue of either this Bill or anything else the United Kingdom
was going to act in a way that was, as I described it, an immovable
roadblock, then I think that that might create a significant reaction
from our partners, as I think you'd expect it to.
Chair: As was intended.
I think you've answered the next two questions. Jacob, would
you be kind enough to refer to question five?
Q84 Jacob Rees-Mogg: Thank
you very much. If there were to be new treaty negotiations, so
beyond dealing with the existing competencies, do you think the
Bill would strengthen or weaken the position of the United Kingdom—increase
or decrease its credibility?
Sir John Grant:
One of the reasons I hesitate is because I've taken the view for
some time, and by some time I mean a number of years, that there
wouldn't be, after this treaty, a new wideranging treaty
for very many years to come. The whole history of the Constitutional
Treaty and then the Treaty of Lisbon suggests to me that, quite
apart from the position of the United Kingdom, there isn't a readiness
in the rest of the European Union collectively to have such a
treaty. My own view is that it is a hypothetical question. Perhaps
the best way to answer it is to look back a bit.
The Prime Minister of the day, Mr Blair, announced
a referendum before we completed the negotiations on the constitutional
treaty. We had a number of red lines; we maintained those socalled
red lines. I think the assumption that other Member States drew
was that Mr Blair thought he could win a referendum and that if
they met his points on the red lines that would be enough. So
in that particular case it didn't make an enormous difference
in the endgame. I think this is the right answer: if you're seeking
to prevent something, and the general expectation is that it will
be extremely difficult to win a referendum in a country, then
it makes it easier for you to prevent the things you are trying
to prevent.
Chair: Could I just ask on that? Andrew
Duff, in his evidence, says that actually the European Union,
he uses I think it is the Walter Hallstein analogy of the bicycle,
and if you want to keep it going you have to keep on pedalling.
So is it so hypothetical?
Sir John Grant:
I don't agree with the analogy—well, I agree with it up
to a point, but that doesn't necessarily mean treaty change.
The European Union started as an exercise in using treaties to
create institutions. That approach to the development of the
European Union has historically been very strong, is still strongly
held in what I now believe is a minority of Member States, and
that view is held by a not insignificant number of Members of
the European Parliament. But I don't think that it has to mean
the development of institutions and process through treaty change.
For instance—and this is a slightly slippery argument;
I will try and make it clearly—the Treaty of Nice wasn't
a perfect treaty, but the assumption in what I'm generically calling
Brussels was that the reasons that the European Union quite frequently
wasn't acting as effectively as the Member States and those involved
in it would wish was because there was something wrong with the
institutions or the voting procedures. I don't take that view.
The accumulation of legislation is not axiomatically a route
to the effectiveness of an organisation or a set of institutions.
What seemed to me to have happened, probably starting
in the late '90s but certainly was the case by the beginning of
this century, was that Europe was being measured by a different
series of tests. It was being measured by a test, for instance,
of whether it was contributing to the economic success of the
individual Member States in the European Union as a whole. The
reaction of quite a lot of people was, "We need another treaty."
In my view it is not likely to make an enormous amount of difference
to that particular test; nor—well, we'll see—to some
other things. I know Andrew, and in many ways I certainly respect
him and I admire him for some things, but I think that's a slightly
depressing conclusion to draw, that the only way that the European
Union can succeed into the future is to have more treaties. I
simple don't buy that.
Chair: Okay, thank you
very much. Now, Professor Simon Hicks claimed in his evidence
that there was evidence that backed up his claim that where there
were significant domestic constraints on the Government in negotiations
on treaty change, the Government can credibly threaten that an
agreement will be rejected domestically if it doesn't gain sufficiently
in the negotiations. The consequence, at least in his view, is
that the greater the constraints on domestic Governments in any
such negotiations, the more likely they are to gain in bargains
unanimously. Now, Denmark and Ireland he gave as examples of
this, but he also went on to say that France and the United Kingdom
strengthened their hand in negotiations on the Convention on the
Future of the Europe when they announced that referendums would
be held. James, would you like to take up the next question on
that?
Q85 Mr Clappison: Yes,
I think you've already touched on this, but when you draw on your
experience of what happened after the Prime Minister of the day,
Mr Blair, announced that there'd be a referendum on the Constitutional
Treaty, I think it was implicit in your answer that you thought
that States were then looking to see how they could accommodate
him, if they could, within their negotiating positions.
Sir John Grant:
Yes, what other Member States would want to know in that case
is what do you need to win the referendum, and they got an answer.
It wasn't an answer that was radically different to the answer
they were getting—indeed, not significantly different to
the answer they were getting three or four months earlier. Remember,
and this is etched on my memory, we had a negotiation in the autumn
of 2003. There was then a hiatus after the European Council of
December 2003 collapsed. Everybody was expecting an agreement.
President Chirac and Chancellor Schröder weren't ready for
that. We all collectively gave up for a bit, and then we came
back to it under the Irish Presidency. In the interim, the Prime
Minister announced his intention to have a referendum. Most of
the negotiation was done. So that is completely different from
going into a negotiation with a referendum requirement behind
you. It is different in concept.
Q86 Mr Clappison: We're
also requiring various procedures to be followed in the case where
a passerelle clause is implemented and there is a change in the
voting referendum requirements on internal Council procedures.
Do you think this will have an effect in negotiations as far
as that's concerned or not? Will the same thing happen?
Sir John Grant:
No, I don't think so. I think two things can happen then. I
may not have been listening carefully enough; are we talking about
the movement from unanimity to QMV or the simplified?
Q87 Mr Clappison: Yes,
unanimity to QMV where there's a requirement in the Bill dealing
with that. Would that have an effect on the Member States in
their approach towards the UK, or not?
Sir John Grant:
A bit. So let's take a hypothetical example where the Commission
bring forward a proposal under unanimity for a piece of legislation
that is desirable. The United Kingdom supports it; most Member
States support it; but two don't. Then the next question is:
will those two be prepared to agree to move to Qualified Majority
Voting, so they can be outvoted? It's inherently unlikely, but
I suppose it could happen. I don't think it's very likely in
practice. So the other possibility is that in anticipation of
such a problem an attempt is made to engineer the move from unanimity
to QMV, so that you can outvote somebody who'd be opposed to it
under unanimity. It's on the margin—isn't it?—once
you think it through.
Q88 Mr Clappison: On a
different subject, drawing on your experience, you referred earlier
on to the Franco-German meeting that took place. Looking at it
from the outside, this always seems one of the curious things
as far as the EU is concerned, that those two countries have their
own meetings where matters are discussed between them, as arguably
the two most powerful members of the EU. What effect do you think
those meetings and the message that comes out of them has on other
states, particularly smaller states?
Sir John Grant:
It depends on the message. It's quite a pragmatic world. People
have got used to the idea of close FrancoGerman co-operation,
and it's become clear over a number of years that that co-operation
isn't always trouble free. It is a commitment by both those countries;
it's institutionalised.
Mr Clappison: But
there is a recognition on each side that it is of their benefit
to keep that going.
Sir John Grant:
It is, and they are both prepared to compromise in order to keep
it going, which is the crucial element in it. So do people resent
it? Yes, sometimes, and I think recently they may have, from
what I read in the press—for instance, over the question
of a new treaty, if I understood what happened between Merkel
and Sarkozy correctly. But it's a fact of life, and so people
sometimes resent it.
Q89 Mr Clappison: But
pragmatically, is there an effect upon smaller states that they
see the message coming from there and they then want to fall into
line with what's been decided or take advantage in whatever way
they can of the message that's coming out?
Sir John Grant:
Yes, because if something has the support of France and Germany,
it has enormous political momentum, and therefore people look
at it and say, "There is a high probability that this will
happen. Can we frustrate it?" It doesn't always happen.
If you go back, for instance, to June 2004, when there was very
clear FrancoGerman support for Mr Verhofstadt as President
of the Commission, that didn't happen.
Q90 Chair: Could I follow
that by asking a question relating to the manner in which majority
voting applies, where those countries economically dependent upon
Germany have a tendency to vote with her. Ronald Vaubel of Mannheim
University has written quite extensively about what he called
"regulatory collusion"—the application of majority
voting to secure a comparative advantage to certain blocs—and
of course Germany does have economic ties with the Czech Republic,
Hungary, Poland and the rest of it. Do you think that in general,
despite the FrancoGerman alliance if you could put it that
way, there is an inevitable centre of gravity which we've seen
recently in relation to the euro questions, where Germany does
have a predominant influence when it comes to economic questions?
Sir John Grant:
I think its influence reflects the size and success of its economy.
The point you make is very interesting; I have never noticed
it, but perhaps I've been looking in the wrong place.
Chair: I'll send
you the paper if you're interested.
Sir John Grant:
Yes, I would be interested. People tend to vote in the Council,
in my view, in relation to their interest on the question, so
countries will look at the piece of legislation and say, "Does
it suit us?" There's very little, in my experience, of people
saying, "We'll vote for that, although we don't like it very
much, because we're dependent on another Member State for something
else." In my experience, there's very little of that. But
I think that, given the success and the size of the German economy
and its importance for the work that's going on in the eurozone,
what has happened is very logical. It may be that if you take
a snapshot of the past 12 months, where the preoccupation of the
EU has been the eurozone, and for the reason I've given Germany
has played the absolutely decisive part in decisions on that,
that doesn't extend to the rest of the EU. Britain retains very
significant influence in Europe, despite the fact that it's not
a member of the euro. Sweden was able to conduct a successful
presidency of the European Union despite the fact that it's not
a member of the euro. I never felt in COREPER—and I hope
I speak on behalf of the Swedes—nor I think did I sense
at least that the Swedish negotiating position suffered on other
issues outside the Ecofin sphere, and indeed not always within
the Ecofin sphere, because it wasn't a member of the euro. My
point, Chairman, is that I think you're quite correct to identify
the decisive German influence. It will always be very significant
because of the country's size and importance, but it's disproportionately
high in relation to the euro.
Chair: And, of course,
there is Thomas Mann's remark about whether it would be a European
Germany or a German Europe? Perhaps we'll go on from there.
Q91 Kelvin Hopkins: What
is your view of the credibility with which this threat of the
Bill's referendum locks will be viewed by other Member States?
Sir John Grant:
Well, I think that is very credible, because if the United Kingdom
passes legislation that requires it to have a referendum then
people will assume that it will. Forgive me if I'm going to be
anticipating incorrectly what lies behind that question. There
was a point in Professor Hix's evidence where he thought there
would be a point at which people wouldn't think it was credible.
I think that he might have referred to environmental taxation
in that respect.
Chair: Carbon tax.
Sir John Grant:
Yes. If every other Member State of the European Union was ready
to take a unanimous decision to move to Qualified Majority Voting,
so that legislation could be passed on a carbon tax, then I think
what was really behind Professor Hix's point, if I can reinterpret
him, is that people would say "Surely, you can't be serious?"
If the United Kingdom was one of those countries that wanted
to pass this piece of taxation then all the more so. I think
in that quite narrow respect, this issue of "Surely, you
can't be serious" might well arise. It seems to me the answer
would have to be: "Well, we are absolutely serious."
But I think you have to look at the specific issues, and I think
on the issue of carbon taxation, for instance, we have an emissions
trading scheme in the European Union, it's several years since
I looked carefully at it, but I'd be very surprised if the issue
of a carbon tax in addition to that was actual, and the emissions
trading scheme, any adaptations to it are decided by qualified
majority. So, hypothetically, it raises an interesting issue.
I just wonder in practice how pertinent it is.
Q92 Kelvin Hopkins: Supplementary
to that, if I may Chair, I would guess this would depend to a
large extent on the previous position of the Government of the
day to the European Union in general. A Eurosceptic Government
would use the threat seriously, and there's also the likelihood
that the introduction of any kind of referendum in present circumstances,
with a high degree of Euroscepticism amongst the public, would
imply a no vote. But if there were a Government led by somebody
like Tony Blair, a Euro-enthusiast, they would use every trick
to make sure we got round the problem. I speak as a Eurosceptic
of the left, I may say.
Sir John Grant:
I think I knew that already, but I certainly deduced it.
Q93 Kelvin Hopkins: This
is how I would have seen it. The previous position of the Government
of the day, plus the threat of referendum lock, together would
make a difference.
Sir John Grant:
About whether others perceived this as credible?
Kelvin Hopkins: Yes,
yes.
Sir John Grant:
Well, yes, but for the reasons I gave, I think, that we're talking
probably five years ahead, at least. We're talking about a situation
where we were the only Member State seeking to stand out against
a move to Qualified Majority Voting, so that somebody else could
be outvoted. The point about the passerelles is that—they're
significant in a way, of course they are, they're there for a
reason—but it's very difficult to use them, whether or not
there is a referendum Bill. It seems to me that what the Government
is seeking to do is to put beyond any doubt its position on the
matter and its assessment of the relative importance of that and
the way it wants to deal with it, but the reason passerelles aren't
used very much is that everybody's got to agree that some of them
are going to be outvoted. Let's say, I'm sitting in COREPER and
I'm blocking something. I promise you, it did happen.
Chair: That's very
encouraging.
Sir John Grant:
I thought you'd say that, Chairman, and I can provide lots of
witnesses to confirm that to the Committee. And there's a passerelle
clause, so one of my very irritated colleagues says, "This
is absolutely intolerable. We must use the passerelle clause.
John, will you agree to use the passerelle clause, so that you
can be outvoted?" I wouldn't have felt uncomfortable.
Chair: Can we move
on to enhanced co-operation?
Q94 Michael Connarty:
It is interesting that you mentioned the one example of carbon
tax and the fact that we have an emission trading scheme, which
is a form of taxation of businesses.
Sir John Grant:
I didn't say that.
Michael Connarty: It's an interesting
one because I did point out, when that was being discussed in
evidence, we had actually passed in the Committee an agreement
by the Government to the Eurovignette, which of course is a carbon
tax on lorries over a certain weight. I've been talking to my
road haulage industry in my constituency since and it's exactly
what they see it as. But it went through without anyone calling
for anything. Even the people in the industry would say they
were consulted but ignored, because they didn't want to have to
pay extra taxation on their lorries for the benefit of the EU
climate change agenda. The interesting thing having you here
is that you've been in the COREPER situation where these negotiations
go on, where the things are ironed out, and according to one of
the past Commissioners who came here in a previous Committee,
she said that basically, if a couple of big countries object to
something, then the Commission take it away and find another way
of doing it so that you don't have a major fall-out. But what
the Government seems to be doing with this Bill is saying there
are a number of issues. One, the Government will have to want
to do it, because they won't call a referendum on something they're
opposed to, because they will vote it down in the House. But
then we have to have a referendum before we can agree. I'm trying
to get the scale on which this will cause changes in behaviour
in the way Europe makes its policy, and particularly, will there
be, in your opinion and from your knowledge, a tendency to go
for more enhanced co-operation and leave the UK behind if the
UK won't play ball?
Sir John Grant:
I note, incidentally, on enhanced co-operation that Professor
Hix said that he thought that referendum locks strengthen your
position, but he also predicted that there might be greater use
of enhanced co-operation. There is a slight contradiction between
the two. There can only be enhanced co-operation where there
is competence. So those provisions of the Bill that relate to
the transfer of competence to the EU are not relevant to enhanced
co-operation. That's, in my view, the guts of it, because, partly
for the reason I've given, passerelle clauses—I'm not saying
they can't and won't be used—can only be used a limited
number of times. So enhanced co-operation will only arise where
there is unanimity full stop—there is no scope for a passerelle,
and at that point the question of the Bill is not relevant because,
if we are blocking something, we're blocking it—or where
we are blocking the move to a passerelle.
I'm not certain about this, because I haven't been
able to talk to a lawyer about it. I don't think the question
about whether the Bill will lead to more enhanced co-operation
is a very big question. It's a good question—you have to
ask it—but I think the answer is: maybe in the odd, relatively
limited case. But because, by definition, it can't increase the
competence of the EU and enhanced co-operation can only be based
on the competence of the EU, it's not the big question. The more
interesting question—I haven't been able to think it through
and I apologise to the Committee for that—is whether enhanced
co-operation will be used at some stage in the future downstream
of efforts to deal with the problems of the euro.
Q95 Michael Connarty:
I think then it all turns on what does Europe do? I remember
during the constitutional convention when the EU had 100 amendments,
all of which were rejected when Peter Hain put all these things
on behalf of the EU and the UK and they were all swept aside,
we still went on, and then we ended up with the Lisbon Treaty.
It was quite clear at that time that we were seen as being a
bit irritating, the UK. We had a particular role, we were seen
to be slightly annoying, but the machine rolled on. Politically
we were tolerated, in a sense, and we didn't necessarily lose
a lot of friends; we just saw that as being the British way—we
were being awkward. What do you think, if enhanced co-operation
or some other strategy is adopted, will happen in terms of the
UK's influence? We have all this list of things at which we are
going to throw a spanner in the works and hold everyone back and
keep having to refer to all the things of this new Act that we
have to take into consideration every time we sit around a table
with our colleagues in Europe. What will happen then, if, as
you say, it's not enhanced co-operation? What will happen, and
do you think what will happen will see us sidelined in some way,
or weakened in our negotiating position, because we have all these
burdens we carry now on all these matters? Of course, Professor
Hix said that they were not very significant, but we're just adding
them to the things we have to be awkward about in our negotiations.
How do you think you see that playing out? If it's not enhanced
co-operation, what will other EU countries do to get around our
awkwardness?
Sir John Grant:
I think that there may be some specific cases, and I can't predict
them, where our awkwardness will hold something up that they will
want to do. But I think that they'll be quite specific, because
I don't think that they, the other 26, collectively want a new
wide-ranging treaty. I do think they want to take action in relation
to the eurozone and that they will be able to do so within the
terms of the treaties and the Bill. We may frustrate the odd
move from unanimity to Qualified Majority Voting, and there may
be other cases where—again, I can't predict them—it
makes sense to others to add a small piece of competence to part
3 of the treaty where we prevent it. But if you look back over
the history of the past 25 years in Europe, I don't think this
will be regarded by anyone in Brussels as a qualitative change
in British awkwardness. You're exactly right: we think of ourselves
as the grit in the oyster. There are different views on that,
but we've always been the biggest problem, and this confirms that.
We were a problem in a whole series of respects during the last
Government's time, whatever the views of Committee members may
be on the policies of that Government. The reason for that, the
underlying reason and the reasons I tried to give at the beginning,
is that our point of departure is different.
Can I add a point that is germane to your question?
That has changed, first because of the accession of Sweden, Finland
and Austria—Sweden and Finland in particular—and also
because of the other rounds of enlargement, because we have a
greater community of interest, not on all issues, but on a number
of issues, with those new countries. It doesn't alter the fact
that, by and large, we have more problems than anybody else.
This is another problem, and I don't think it will fundamentally
change the dynamic in Brussels in any significant way, unless
I'm completely wrong in my analysis. Where it would become dramatic
would be if everybody woke up tomorrow morning and said, "There's
only one way to sort all of this: we need another treaty."
But do you really think that there is an appetite for that in
France, the Netherlands, Ireland, Denmark or the Czech Republic?
I don't think so.
Q96 Chair: Can I ask a
question on that, because we've already got Chancellor Kohl in
the past, you referred to the past 25 years, talking about the
convoy? That was at the time when they were trying to drive things
forward. Now, they wanted enhanced co-operation for that purpose—in
other words, there would be an inner core, which is not dissimilar
to the eurozone problem as Wolfgang Münchau, for example,
and others are now addressing it in the Financial Times.
So that there is a question surely that we may prove to have
been right, or at any rate some parts of the opinion making elite
in this country have turned out to be perhaps more right than
wrong. Is it not possible that, where you've got Schengen, you've
got opt-outs, you've got enhanced co-operation, you are effectively
beginning to witness, under the pressure of economic reality,
a shift in the dynamics of the European Union, so that there is
something that is approximating an association of nation states
as compared with the centralised, uniform system on which the
whole system has been constructed. There may be resistance to
this, as you've indicated, but isn't that the direction in which
the dynamics are taking the Union as a whole?
Sir John Grant:
I think you had this discussion with Professor Hix. Am I right
about that? I agree with his answer. His answer was that, and
I'm paraphrasing it now, there is difference between a loose association
of Member States and a set of supranational arrangements where
not all Member States are participating; so, clearly, arrangements
for the euro are fully set out in the treaty. I think the beginning
of the treaty says something like the European Union shall have
a currency which shall be known as the euro. Now, the fact that
there are then a set of arrangements that mean there are either
legal opt-outs—we have a legal opt-out—or other Member
States have de facto opt-outs, doesn't alter the fact that it
is supranational. I think it has been true for a long time that
we have had an EU where there was—the phrase "variable
geometry" was very fashionable at one point—a core
of activity focused around the single market, and not only the
single market, of course, but that's been the guts of it, which
everybody's had to participate in, and then there have been some
other parts of the project where there has been a greater degree
of choice. That trend has existed for a long time. My guess
is that it will be accentuated by the response to the euro crisis.
So I go back to this article in the FT—I can't find
it now; I should have underlined it—but anyway, this talk
about if you go underneath the euro crisis, what is the problem?
The problem is lack of convergence between the economies that
are members of the euro. That is the underlying reason for the
problem. So any long-term solution has to address that in some
way.
Q97 Chair: And lack of
growth.
Sir John Grant:
Yes, absolutely, lack of convergence around things like growth,
so you have an enormous difference in growth and wage costs, and
all those kind of things. In order to find a solution to the
problem you have to address that in time in some way. I don't
understand Wolfgang Münchau's articles, Chairman; I am glad
you do, because they are too complicated for me. But there will
have to be a number of steps taken within the eurozone to deal
with the problems that have arisen, and we won't be part of that
process and a large number of other states won't be part of that
process either. But that doesn't make it a loose association
of Member States.
Chair: Thank you
for that.
Q98 Jacob Rees-Mogg: May
I just continue on that, Chair, rather than coming immediately
to the next question? I think what you are saying is extremely
interesting and important. The euro has a crisis; they are not
going to say the euro's failed and we go back to ordinary currencies;
and therefore the argument for more integration rather than less
becomes very strong, saying we've got to have a closer political
Union, a closer fiscal Union, and therefore we need more of a
single Government across the eurozone countries. Now we're obviously
outside that, but if there were to be a move in that direction
it would require a big treaty rather than a little treaty. What
then happens to our position? Do we then become a satellite looking
at or attached to this big central body? Do we find that there's
a new body that we're simply outside and are basically irrelevant
to? Do we try and block it by saying we don't actually like
a treaty that leaves us so far on the outskirts? How do you think
that would develop, and what effect, ultimately, would our referendum
lock have or not have on that?
Sir John Grant:
First of all it's very early days, and I don't think that you
would need—remember, I make these remarks with real hesitation
because I'm not an expert in matters related to economic and monetary
union—a new big treaty. It doesn't seem to me that the
kind of issues that you face would require a new big treaty.
I might be wrong, but that's my assumption. Incidentally, I think
a new big treaty would be very difficult, even if it only involved
members of the eurozone, completely hypothetically. Of course,
it would require our agreement if it was to be within these treaties;
that's absolutely clear. So I think that, if I may say so, we
just have to take this exercise; we have to observe what's going
on not one step at a time, exactly, but we shouldn't jump all
the way to the conclusion and assume that there will be a further
wide-ranging move to political union via a new treaty. That doesn't
seem to me to follow at all, not least because I don't see how
treaty change, in other words changes to the institutions and
to the voting procedures, even if you could agree it, and it was
difficult enough last time, would address the kind of issues that
are causing the problems of the eurozone.
Q99 Chair: I know that
you have to get off, Sir John, so I wonder if we could move on.
If you could give a brief answer to the question about the reasons
for the passerelle clause in the Lisbon Treaty, what is your judgment
about that?
Sir John Grant:
The big one?
Chair: You've done
some aspects of it already, but what is your view about the reasons
for the passerelle clause in the Lisbon Treaty?
Sir John Grant:
The passerelle clause, if you call it that, allows you to change
the treaty within the treaty, as it were; it allows you to change
part 3. I think that was just a feeling that this binary situation,
where either you've got to do the whole lot and chuck everything
into a basket, or nothing at all, wasn't very practical. That's
right, incidentally. There are some things that, objectively,
probably would make sense to do without having to have a new treaty.
So I think the reason for that was common sense; the reason for
the other ones was that was the compromise.
Q100 Penny Mordaunt: Do
you think it is likely that this Bill could trigger similar constitutional
constraints in other Member States? If so, is there a risk that
it could lead to gridlock?
Sir John Grant:
No, I think, is the answer to both questions. It might do. Another
Member State might feel under intolerable political pressure to
do the same, but I'd be surprised. On the gridlock, I take the
view that people are not going to say, "We really want a
new treaty but we're not going to have one because the UK has
a referendum Bill." That's my view over the next few years,
not least because I don't think anyone believes that the present
British Government would be ready to countenance a new treaty,
even if it didn't have the referendum Bill. Nobody is knocking
on the Prime Minister's door, as I understand it, saying, "This
is a terrible thing, Mr Cameron, please rethink; we must have
a new treaty." Again, it's a slightly theoretical question.
Q101 Chair: Thank you.
We're just sorting out the next questions because of the time
factor. How important, do you think, is the effect on the balance
of power within the Council and the accession of new Member States?
That is not intended to explicitly be a Palmerstonian question,
by the way.
Sir John Grant:
I'll try not to give a Palmerstonian answer. I think it's important
on the balance of power. I noticed in Professor Hix's evidence
that the question came up of whether accession should be covered
by the Bill, and perhaps that question is coming, I don't know.
Yes, it is important, because what it does is, it changes alliances.
It changes alliances between the Member States of the Union.
I've said earlier on more than one occasion this morning that
he accessions of 1994-95 and Central and Eastern European enlargements
have changed the socalled balance of power overall to the
United Kingdom's benefit. In other words, we've had more allies
on more issues than was the case when we were 12. So in terms
of alliances, I think it is significant.
Q102 Michael Connarty:
Turning to one of the, I think, most significant things—it's
not an omission, because it's quite clearly covered in section
4(4)—the Bill excludes, and the Act will exclude, the need
to use referendum on accession treaties. It seems to be one of
the most fundamental questions before the EU and the UK in the
next decade; for example, the accession of Turkey. Do you think
it's consistent with the stated aims of the Bill and constitutional
constraints placed in part 1 on other matters to have this exclusion
and say we will not use referendums for accessions?
Sir John Grant:
It seems to me it actually is consistent, because the Bill, as
I understand it from what I have seen and what ministers have
said about it, seeks to deal with this question of the transfer
of power from a Member State, from the United Kingdom, to the
supranational level, as it were, so transfer of competence. That
idea is extended to cover voting procedures, for reasons I understand,
if I can put it like that. Whereas accession: one, it takes place
very clearly within the existing powers and on the basis of the
existing competence of the treaties; and secondly, and I think
that this is also a point, what happens when there is an accession
is that a slab of your votes and of your relative weight in the
Council goes to the acceding Member State. That's what happens.
It's very oversimplified, but we have X percentage of the current
EU; if the EU gets bigger, our percentage goes down a bit in order
to ensure that the new Member State also has votes and MEPs.
Now, that's not the same as transferring power to the supranational
level. So I think there is a very real distinction.
Michael Connarty:
Can I challenge you in that?
Sir John Grant:
You may, Mr Connarty.
Q103 Michael Connarty:
Because when an accession takes place, the Single European Act
means that anyone from within the new extended EU can travel anywhere.
They don't necessarily have the right to work or to live, but
they can travel. So suddenly you're saying anyone can come from
any of these countries, and we've seen stories where there has
been quite a substantial amount of what appears to be temporary
migration. In reality, people come in as visitors, socalled,
and stay for ever. Interrogate any of the people selling the
Big Issue on the streets of London or the streets of Glasgow,
and they're not working. They're here as visitors under the Single
European Act. But they've quite clearly taken over that area
of begging, shall we say, to allow them to remain here, but they're
from countries that don't have the right to come and reside or
work, but because they're in the EU—I'm talking about Romania
and Bulgaria—we have no control over their movements. So
we give away massive powers to the EU when we have an accession
without anything to do with voting in Council or distribution
of any other powers that would be specifically under section 4
or section 6. It totally gives away power, so how can it possibly
be excluded from a Bill that's supposed to guarantee the people
of Britain the chance to say when those powers will be transferred?
You can't avoid the Single European Act if someone is allowed
into the EU.
Sir John Grant:
The general point, that accession is significant, I accept. I'm
not sure I would have characterised its significance in exactly
the way you have, but I absolutely accept the point. But the
decision that the new Member States should accede is fully provided
for in the existing treaties, and my reading of the evidence given
by the Foreign Office Minister who came to the Committee and the
other things I've read about the Government's position on the
Bill suggests to me that their objective was to address the question
of the transfer of competence or power as defined as a change
from unanimity to Qualified Majority Voting. Given that that's
the position that the Government has taken, accession seems to
me to fall clearly outside those two broad definitions. That's
my only point.
Chair: Could I ask
one final question? Alright, go on.
Michael Connarty:
They've said, in section 4(4), they're excluding it. Now, I don't
think that's a response to the statement that they are not going
to allow the transfer of power. So we will have to disagree on
that one.
Chair: There we are.
James, you will have to be very quick.
Q104 Mr Clappison: Very
quick question: your answer was predicated on the assumption that
the Bill was just dealing with the transfer of power. If one
took a different approach to it and one said one wants to give
a say possibly to ordinary people, the electorate, in what happens
in the European Union, which might have an effect on their lives,
then you'll all take a different view. Some accessions would
clearly have a very big effect on people's lives, as the last
one did through migration and other things.
Sir John Grant:
But that applies to a whole range of decisions that are taken
in the European Union. One of the things that I noticed in your
first Report was a very powerful paragraph in the introduction
about the range of areas where European Union decisions and legislation
impact. It's a very long list, and I'm sure it was a comprehensive
list; it looked to be. So the fact is that, whether one approves
of it or not, a very wide range of extremely significant decisions
are taken at the EU level. You could take the view, and I think
one of your witnesses did, that there should be far more referendums
in the UK. I just think that what you're saying is if the bill
was trying to do a different thing it should be different. I
agree with that, but it's trying to do one thing and I think that
the omission of accession is logical with its stated objectives.
Mr Clappison: Yes.
Q105 Chair: I hope you'll
forgive me for asking a last very brief question for a brief answer.
Against the background of the daily lives issue and the impact
it has on people, do you not think that it is time that we had
a much more transparent way of knowing who casts which votes in
the context of both COREPER and also the Council of Ministers,
so we know who is calling the shots?
Sir John Grant:
I'm very surprised that you don't feel you know when the United
Kingdom votes in favour of a measure or against it in the Council.
I am genuinely surprised.
Q106 Chair: Well, I'm
surprised that you're surprised, in that case, but there you are.
Sir John Grant:
I thought it was always in the Financial Times?
Chair: Ah, that's
another question.
Sir John Grant:
No, there is a point. Yes, but if you're saying there should
be a formal system for communicating to Parliament, to this Committee
and to other Committees those arrangements—
Chair: That's what
I had in mind.
Sir John Grant:
Yes, I think I'd prefer not to express a view on that question
if you don't mind.
Chair: I thought
that might be the answer—very diplomatic. Thank you very
much, Sir John.
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