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|©Parliamentary copyright||Prepared 19th May 2011|
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General Committee Debates
European Committee Debates
Commission's Exercise of Implementing Powers
The Committee consisted of the following Members:
Alison Groves, Committee Clerk
† attended the Committee
The following also attended, pursuant to Standing Order No. 119(6):
Commission’s Exercise of Implementing Powers
Chris Kelly (Dudley South) (Con): It might be helpful to the Committee if I take a few moments to explain the background to the regulation and the reasons why the European Scrutiny Committee recommended a debate on it.
Under the pre-Lisbon rules, article 202 of the European Community treaty authorised the Council to confer on the Commission powers to make rules on the implementation of legislation that had been adopted by the Council. The Commission’s exercise of such powers was subject to a complicated procedure known as comitology. In exercising these powers, the Commission was assisted by four types of committees composed of representatives of the member states.
The treaty on the functioning of the European Union contains provisions for procedures that have replaced the present comitology procedure. Article 291 of that treaty requires that, where uniform conditions for implementing such acts are necessary, the acts should include provision to confer implementing powers on the Commission. It also states that the European Parliament and the Council are required, by regulation, to lay down the rules and general principles for the mechanism by which the Commission’s exercise of its implementing powers will be subject to control by the member states. It is this regulation, adopted by the Council on 14 February this year, that is the subject of today’s debate.
The regulation provides for the Commission’s drafts of implementing acts to be subject to either an examination procedure or an advisory procedure. The examination procedure applies to implementing acts of general scope, to those relating to large spending programmes, to the common agriculture and fisheries policies, to the environment and consumer health, to taxation, and to trade. Trade includes anti-dumping and countervailing measures, and had not previously been subject to comitology, so this represents a significant increase in Commission power. The advisory procedure applies to all other implementing measures.
The regulation establishes advisory and examination committees, which are composed of representatives of the member states and chaired by a representative of the Commission. Under the examination procedure, an examination committee delivers its opinion by qualified majority voting. If the committee delivers a positive opinion, the Commission can then adopt the implementing act. If the committee delivers a negative opinion, the
Under the advisory procedure, an advisory committee delivers its opinion, whether positive or negative, by a simple majority of its members. The Commission then decides on the draft implementing act, as article 4(2) states,
When the European Scrutiny Committee reviewed the draft regulation on 8 September, it agreed with the Minister for Europe that it would give the Commission excessive freedom from member state control in the exercise of its implementing powers, so it asked to be kept informed of progress in the negotiations. Unfortunately, due to a worrying lapse in scrutiny procedures in the Foreign and Commonwealth Office, the Committee did not see any further revisions of the draft regulation until after political agreement on it had been reached. When the Minister next wrote to the Committee, on 3 February, he set out how the proposal had, in the Government’s view, been improved.
The most significant improvement was the establishment of an appeal committee, composed of member state representatives and chaired by the Commission. This provides an additional layer of scrutiny over the Commission’s exercise of implementing powers. The Government also secured the inclusion of a recital which checks the Commission’s exercise of its discretion to adopt implementing acts in the field of taxation, consumer health, food safety and protection of the environment, when the appeal committee is unable to agree a positive or a negative opinion. He also provided detail on how implementing acts for anti-dumping and countervailing measures will be scrutinised by member states. Overall, the Minister said that the UK had made significant progress in securing a regulation that ensures comprehensive and timely oversight of draft Commission implementing acts by member states, while resisting changes that would have significantly affected management of several key sectors—notably financial services, taxation and trade—at EU level.
In recommending the regulation for debate, the European Scrutiny Committee asked the Minister to explain how he sees the appeal committee operating in practice, including the circumstances in which a referral from the examination committee will be made. It also asked him to explain how he sees the additional safeguards for taxation, environmental and consumer health, and definitive anti-dumping, countervailing and safeguard measures operating in practice. It should be noted that after 1 September 2012, the new rules that will apply to anti-dumping and countervailing measures under this regulation will mean that such measures cannot be blocked by a simple majority.
Additionally, we would be grateful if the Minister could explain a little of the background to article 11, which gives a scrutiny role, but not a veto, to the Council and European Parliament. We suspect that the discussions in the examination or advisory committees will be mirrored in the Council, with the consequence that the Council is unlikely to invoke article 11. But this is not true of the European Parliament. So it would be interesting to have the Minister’s views on how article 11 might be invoked by the European Parliament.
There is one final point on which the Committee would be grateful for the Minister’s views. Exercise of implementing and delegated powers is invariably conditional upon an enabling provision in the superior legislation, or “basic act” as it is more commonly known. The Committee thinks that it would be sensible, when EU legislation contains such an enabling provision, for this to be highlighted and explained under a separate heading in the explanatory memorandum. That would clearly signal to the Scrutiny Committee when a European document proposes to delegate powers to the Commission, and it may also help to focus attention on the issue in the Department concerned.
The Minister for Europe (Mr David Lidington): As always, Mr Brady, it is a pleasure to serve under your chairmanship. I thank the Scrutiny Committee for instigating the debate on this subject which, while technical, is also genuinely important in terms of the powers that, in certain circumstances, are given to the Commission to take forward implementing legislation.
The regulation lays down the rules for control by member states of powers to implement legislation that have been conferred on the Commission. It may help the Committee if I make it clear that in the European Union legal order, the treaties are regarded as primary law; regulations, directives and decisions are secondary legislation and often referred to as basic acts; and implementing acts, along with delegated acts, are tertiary legislation.
This debate concerns implementing acts, and the power to adopt an implementing act is conferred on the Commission by the EU legislator when uniform conditions are needed to implement a legally binding act. To illustrate when an implementing power may be needed, let us say that a regulation imposes an obligation on member states to provide the Commission with statistical information. The Commission may be given the enabling power in that regulation to establish, by implementing act, a common format for member states to use for submitting that information.
The ability to confer implementing powers on the Commission does not affect the general principle that implementation is primarily—as laid down in the treaties—a matter for member states which bear legal responsibility for ensuring that European Union legislation is implemented within their territories. The principle of conferring such powers on the Commission is not new. Since the 1960s, it has been possible for the Commission to bring forward detailed implementing acts. As my hon. Friend the Member for Dudley South pointed out, previously the
The key point to remember is that the conferral of power on the Commission is only for the purpose of implementing legislation already agreed by the legislator—by the Council and the European Parliament acting through the normal legislative arrangements set out in the treaty. It is helpful to have such implementing legislation because it avoids the need for the Council and the European Parliament to engage in very detailed or technical rule-making and, when the power is used correctly, it helpfully streamlines the EU decision-making process. But that has to be balanced against the recognition that in seeking to limit excessive bureaucracy, it is vital that we do not lose sight of the need for strict oversight and scrutiny of the Commission’s work by member states and their Parliaments. What we are debating today are new arrangements for comitology—for implementing legislation—that derive from the new treaty provisions set out, in particular, in articles 290 and 291 of the treaty on the functioning of the European Union.
I shall not rehearse my views about the Lisbon treaty, although I know that they are shared by other members of the Committee. The treaty is a fact of life, within which we have to work. When the Government came into office, our main objective in the negotiations on a new comitology regulation was to limit any damage that might arise to the powers of oversight exercised by member states from the changes wrought by the new treaty. It might be helpful if I outline the changes brought about by the Lisbon treaty. In essence, the old system of comitology is replaced by two new articles in the TFEU. Article 290 establishes delegated acts, which are acts to amend or supplement non-essential elements of secondary legislation. Examples might include detailed rules of general application on eligibility for aid, rules governing the issuing of licences or rules governing guarantees and deposits. Article 290 sets out the roles of the Council and the European Parliament with respect to delegated acts.
However, we are dealing this afternoon with a different category of tertiary legislation—implementing acts, which under article 291 are acts to ensure the uniform implementation of legally binding Union acts made by the legislator. Examples would include amendments to forms or deadlines, the fixing of amounts or thresholds, rules concerning the frequency of physical controls, communication obligations, the approval of programmes and the content of reports.
A key change brought about by article 291 was the removal of a formal role for the Council as an institution, while retaining the role of individual member states. Following the ratification of the Lisbon treaty, the Commission brought forward a regulation, the final version of which we are debating today, to give effect to the new treaty provisions.
I felt that the Commission’s original proposals gave it too much freedom from member state control. The Government’s objective in the negotiations was therefore to rebalance things in favour of greater member state control. We had to negotiate hard to ensure that we achieved a satisfactory outcome. The resulting regulation provides for two types of mechanism for the adoption of and control over an implementing act. Those are the advisory procedure, whereby the Commission has to
It is important to remain mindful of the fact that the power to adopt implementing acts has to be conferred on the Commission in the basic act—the directive or regulation from the Council and the European Parliament or perhaps, in the case of the common foreign and security policy, the Council alone. Therefore it is essential—the Scrutiny Committee was right to highlight this—that as we negotiate on all future proposals for new EU legislation, we pay close attention to the provisions conferring implementing powers in the basic act. It is important also that United Kingdom experts who attend the committees supervising the tertiary legislation continue to exercise strict scrutiny of how the Commission exercises its implementing powers. My colleagues in other Departments are well aware of the issue, and it is worth noting that UK experts often exercise significant influence in the committees.
We succeeded in securing a number of improvements during the negotiation period. I hope that by listing those, I may go some way towards addressing the questions posed by the Scrutiny Committee, although I am happy to respond to them in further detail. The first main improvement was the introduction of an appeal committee comprised of senior member state representatives. The appeal committee provides an additional layer of political scrutiny over the Commission and establishes a forum in which member states can try to resolve any deadlock reached in the initial examination committee. I have recently written to the Chairman of the Scrutiny Committee, enclosing the rules of procedure for the appeal committee, which were published some time after agreement on the regulation. I hope that that provides the Scrutiny Committee with the more detailed information it sought.
The Commission can opt to refer a proposal to the appeal committee. Member states in the examination committee might block a proposal. In certain cases concerning important subjects such as taxation, financial services or the health and safety of human beings, the initial examination committee of member states might fail to reach an opinion by a qualified majority in either direction. In those conditions, the Commission can go to the appeal committee and ask for its verdict.
Secondly, we secured the inclusion of a recital to the regulation, which says that the Commission should avoid going against a predominant position in the appeal committee when the implementing act relates to key sectors, notably taxation, consumer health, food safety and protection of the environment.
Thirdly, we have limited the European Parliament’s right of scrutiny over implementing powers in line with the EU treaties. During the negotiations, we discussed the role of the European Parliament and the Council. The European Parliament pushed for a wide-ranging right of scrutiny before adoption of an implementing act. We felt, however, that that would be outwith the scope of the powers given to the Parliament by the treaties. The final text therefore provides that when a basic act is adopted by both the European Parliament and the Council, the European Parliament may notify
Fourthly, we have made amendments to member state controls of the Commission’s exercise of trade instruments. Under the regulation, all implementing acts relating to trade have been adopted into the comitology regime for the first time. Voting rules for the adoption of definitive anti-dumping, countervailing and safeguard measures would all have been changed, but we secured our objective of ensuring that the most sensitive of the trade instruments—multilateral safeguard measures—enjoy the same voting rules for adoption as under the previous comitology regime. The sensitivity and seriousness of consequences for EU relations with third countries mean that it is appropriate that the EU impose safeguard measures only if a qualified majority of member states agrees.
In the interest of time, Mr Brady, I shall bring my remarks to a conclusion. We take seriously the Scrutiny Committee’s request for the Government to highlight any case when a basic act confers power on the Commission to introduce implementing legislation. That will need discussion across Whitehall, but I shall report for my hon. Friend the Member for Stone (Mr Cash) as soon as we have reached a decision.
Emma Reynolds (Wolverhampton North East) (Lab): It is a great pleasure to serve under your chairmanship, Mr Brady, for the second time today. I am grateful to the hon. Member for Dudley South for setting out in detail the background to the regulation.
Will the Minister explain why there was a breakdown in communication and engagement between the Government and the very important Scrutiny Committee during the negotiation period? Will he say, in particular, what happened before political agreement was reached on 1 December 2010 and before the final agreement was signed off on 14 February?
Mr Lidington: A mess up was made in the Foreign and Commonwealth Office, for which I have apologised both in writing and personally to the European Scrutiny Committee. That is something that ought not to have happened, and I take full and personal responsibility for that failure. We have taken steps to ensure that, so far as is humanly possible, such an oversight does not occur again. What happened was that a letter from my hon. Friend the Member for Stone (Mr Cash) went astray, and the action that ought to have been taken to keep the Committee abreast was regrettably not taken.
Emma Reynolds: Did the fact that the Committee did not have the chance to debate the draft regulation properly and clear the Government position have any bearing on the Government’s decision to abstain on 14 February? Is that not an easy way out of getting the European Scrutiny Committee procedure right in the first place?
Mr Lidington: No, we abstained because the Scrutiny Committee had not given the document scrutiny clearance. We tried hard to secure a postponement of the date of the Council that would agree to the negotiated final text. Those negotiations were fast moving, and different departmental interests were involved. The negotiations came to a stage at which all my colleagues around Whitehall felt that there was a compromise available that protected the key interests of the United Kingdom, which we have been seeking to defend throughout the negotiations. At that stage, the draft regulation included a deadline of 1 March, by which time both the Council and the European Parliament had to give agreement. We sought to get the deadline for Council agreement extended, so that the Committee would have time—despite the delay caused by the mistakes that I have alluded to—to consider the regulation properly. Although it was sympathetic to what we were trying to do, the presidency said that it was unable to help us, because the European Parliament required, under its rules, to approve the measure in plenary session. The only way that the Parliament and the Council could both approve the final text in time for the 1 March deadline was to do it on the date previously set, which was before the Scrutiny Committee was able to give clearance. For that reason, we abstained, and we made it clear that that was on scrutiny grounds and not because we disagreed with the policy.
Abstaining is something that this and previous Governments have done on a fair number of occasions with European legislation. When it comes to a Council meeting, we have basically supported the policy, but, quite properly, we have defended the position that parliamentary scrutiny should be lifted before we can vote in favour of something—unless there is a formal override.
Martin Horwood (Cheltenham) (LD): The Minister has made an important point about the appeal committee being one of the checks on the power of the Commission to bring forward implementing acts, which the British Government pressed for. Will he give us a little more detail on how that appeal committee will actually operate in practice? For instance, who would actually be on that committee? Who is it likely to be on it from our side? How would he like it to operate in practice?
Mr Lidington: The appeal committee adopted its rules of procedure at its first meeting on 29 March this year, following intensive discussions between the Commission and member-state representatives over previous weeks. The rules of procedure closely follow those set down in the comitology regulation, and they cover rules for convening meetings, including time scales, the level of representation, quorum, documentation to be submitted, how the opinion should be delivered and special arrangements for anti-dumping and countervailing measures. I must stress that the appeal committee has
For a referral to the appeal committee to be made under article 5(3) of the regulation, the following conditions need to be fulfilled. A committee must have delivered a negative opinion under the examination procedure. The chair, as a Commission representative, can deem that there is a real imperative for the implementing act to come into force quickly, and choose not to submit an amended version to the committee that delivered the negative opinion. So instead of there being a renegotiation of the act’s return to the main committee, a request is made to the appeal committee to accept the original text and override the initial examination committee.
However, the proposed implementing act must not be covered by article 7. Article 7 gives the Commission power to take implementing measures immediately, on one of two specific grounds—to avoid creating a significant disruption of the market in the area of agriculture, or to remove a risk to the financial interests of the Union. If either of those two imperatives applies, the Commission must immediately submit its adopted act—the act after the Commission has adopted it and brought it into force—to the appeal committee, and if that emergency procedure has been invoked, the appeal committee then has the power to insist that the Commission revoke the act that it has introduced.
Mr John Baron (Basildon and Billericay) (Con): May I congratulate my right hon. Friend on his obvious grasp of the details? Before I came to this Committee, my knowledge of comitology was somewhat limited, but I am learning as we go along.
I want to ask two quick questions, following on from the question asked by my hon. Friend the Member for Cheltenham. The appeal committee provides an additional layer of security over the Commission’s exercise of the implementing powers. My understanding is that we secured agreement that member states would be able to determine who would represent them at the appeal committee. The mistake that this country has made in the past is that we have not regarded such opportunities well enough to ensure that the country’s objectives within the EU, and hopefully in harmony with the EU, were being pursued. What importance does the Minister attach to this, and when, for example—I understand that member states can decide who represents them on the appeal committee—would he envisage a Government Minister representing us?
Mr Lidington: I would hope that it would not normally be necessary for a Minister to sit on the appeal committee because implementing measures ought, by definition, to be very technical in scope. The political input should take place when the initial act—decision or directive—is framed that contains within it the enabling power, and the politicians are responsible in the Council and in the European Parliament for deciding whether to confer on the Commission those powers to bring forward implementing legislation, or to determine that the directive be implemented by member states but not give the Commission the power to bring forward any tertiary legislation.
I do not rule out the idea that we might dispatch a Minister, particularly if we were to decide that a specific implementing measure was an abuse of power—was taking us into an area of competence creep. Normally, though, I would expect a senior technical expert—an official—to represent the United Kingdom, and indeed other member states, at the appeal committee and the examination committee. It is important that the representative is a person with the expertise to deal with the matter under discussion.
To take an obvious example, let us say that there is a plant health threat; a plant disease is spreading through Europe, so implementing measures are brought in to impose controls to check the spread of that disease. It would be right for member states to be represented by plant scientists or epidemiologists who could take a considered view and would understand the evidence. If we were talking about a tax measure, I would expect there to be tax experts from the Treasury; and if we were talking about a trade matter, I would expect the right official from BIS to be present.
Mr Baron: The Commission is able to adopt an implementing act in exceptional circumstances, despite the Committee’s negative opinion, to avoid creating significant disruption to financial and, say, agricultural markets. At the UK’s request the Commission has prepared a statement explaining the limited circumstances in which that power would be used. Is the statement available now, and will Parliament be able to consider and scrutinise it? As we have asked for the statement, it could be relatively important.
Mr Lidington: If it is not in the papers before the Committee, we will ensure that it is supplied to all Committee members. The statement says that the powers are to be exercised only in accordance with article 325 of the treaty on the functioning of the European Union. Financial interest is defined in terms of that article, which addresses fraud. The article does not cover things such as bailouts or financial instruments.
I have a more overarching question. I am impressed by the people who are delving into the regulation in such detail. Members of Parliament have been found gibbering in corners, tied up by the rules of comitology before now.
Did the Minister say that he had written to the Chairman of the European Scrutiny Committee to explain the terms of reference of the appeal committee? It would have helped everyone if the bundle had included that detailed information, because we would not have to keep asking these questions to tease out from the Minister how the appeal committee will work. His various scenarios are interesting, but are the terms of reference available? Why are they not in the bundle?
Mr Lidington: I have signed a letter to my hon. Friend the Member for Stone on that subject within the past week, and I presume that it has reached him. If the terms of reference are not on the table today, I agree that they should have been. We will try to remedy that.
Mr William Cash (Stone) (Con): I am sure the Minister understands that the question asked by my hon. Friend the Member for Basildon and Billericay is highly relevant. We expected to have the statement, not least because the European Scrutiny Committee’s report says that
The regulation allows the adoption of measures in exceptional circumstances, and those exceptional circumstances are a kind of let-out provision. Irrespective of whether there is a statement explaining those limited circumstances, it is no more than an explanation. Given the overriding and overarching powers contained within this significant regulation, we are concerned, as a European Scrutiny Committee, about whether there is any substantive reason why it should amount to enabling the adoption of measures to which, as a matter of substance, we would otherwise object.
Would it be possible for the Committee to be informed in advance by a warning letter, along the lines of the Lidington letters, the memorandum and the written statements on opt-ins, on what is going to happen? Would it also be possible for us to be involved in some way in the mechanism of the advisory role that the Minister has described? In other words, we would be made party to assessing, through our Clerk advisers, whether we were, in this procedure and in relation to the appeal committee, to be involved in giving some warning in advance.
Mr Lidington: My hon. Friend invites me to comment on the urgency procedures in the regulation and on the broader issue of scrutiny. If you will forgive me, Mr Brady, I will try to reply briefly to both points.
I cannot rule out the hypothetical risk that somebody, at some stage, might try to use the comitology process to extend competence in a way that we do not believe is intended or authorised by the treaties or the legislation. However, it is important to say that the implementing measures must involve matters that are the subject of the parent, basic legislation. It would not be possible for the Commission to invent some piece of implementing legislation on tax on the back of enabling powers in a directive relating to agriculture, for example. However, Ministers and the scrutiny Committees will need to be on the alert when we look at the detailed wording of the parent acts—the directives or regulations. We will need to look closely at the words used to confer enabling powers on the Commission to bring forward tertiary legislation in due course to make sure that those powers are as tightly defined as possible.
There are two areas in which the regulation allow for some kind of urgency procedure. There is article 7. I have described circumstances in which there is significant disruption in agricultural markets or a risk to the Union’s financial interests within the meaning of article 325 of the TFEU. The Commission can adopt the act straight away, but it must then go straight to the appeal committee
It is worth having some kind of urgency procedure, and the issue of epidemics affecting animal, plant or human health are an obvious case. There may be a genuine need for very quick action and for detailed debate and arguments to take place subsequently. On balance, we therefore think it was right to have the measures, but it was also important to have the safeguards.
On the general issue of scrutiny, I am looking seriously, as I said, at the request that the Government flag up to the scrutiny Committees any case in which a piece of EU legislation includes such an enabling power, and the point raised by my hon. Friend the Member for Stone has force in that respect. I am more hesitant about promising that every item of implementing legislation should be given to a Committee. My hon. Friend and his Committees have an insatiable appetite for work, but in the past four years for which I have figures, the number of items of tertiary legislation varied from 1,808 at the lowest to 2,862 at the highest. A lot of those measures were incredibly technical. I am certainly willing to look at whether we can agree on some broad terms of reference under which the Government would undertake to flag up an implementing measure that we considered of political significance, which the European Scrutiny Committee might want to look at. For the Committee to go into each one item by item would probably distract it from its important other work.
Mr Cash: I am grateful for that detailed response. Of course, the Minister will understand that I may not be wholly satisfied with every aspect of the answer, but he covered a lot of the ground. He also briefly mentioned bail-outs. These matters are all in the nature of what we in the House tend to refer to as Henry VIII clauses. It is the implementation of legislation within a framework, but without the degree of scrutiny that we would expect and want. It says in the document pack,
“Article 7 allows for the Commission to adopt an implementing act in exceptional circumstances despite a negative opinion by the committee in order to avoid creating significant disruption to financial and agricultural markets.”
Does the Minister agree that, in the context of the Portuguese bail-out, for example, that the financial markets and the circumstances in which the bail-out took place, were in contravention of article 122, just as the Minister described in his answer to me just now? That is why I have put down a question asking not only for the legal advice but why we did not take the matter to the European Court of Justice. That question intrigues me. Does the Minister believe that the provision under article 7 in exceptional circumstances would preclude a proper challenge to the European Court of Justice in these circumstances?
Mr Lidington: I am looking at the text of article 7. It is true that the title of article 7 refers to the adoption of implementing acts in exceptional cases. Exceptional cases are then defined, in the wording of article 7, as the Commission having power to
“adopt a draft implementing act where it needs to be adopted without delay in order to avoid creating a significant disruption of the markets in the area of agriculture or a risk for the financial interests of the Union within the meaning of Article 325 TFEU.”
It does not give the Commission power to define exceptional cases in any circumstance other than those two. I know my hon. Friend is ever-vigilant, but, on my reading of article 7, I do not think it would give the Commission the powers to venture into the areas where he fears it might and to use emergency procedures in those areas.
Martin Horwood: Forgive me, Mr Brady, I, too, should have welcomed the opportunity to serve under your enlightened and increasingly tolerant chairmanship. I should also pay tribute to the Minister for his expertise: he is in danger of becoming the UK’s foremost comitologist. He gave a very good answer to my first question. I had another about the exceptional circumstances in which some of these procedures might not apply. He has given a full, satisfactory and clear answer on how exceptional and limited those circumstances can be, which I welcome.
My last question is about the balance between scrutiny and effectiveness. Does the Minister take the view that in any legislative arrangement—at national or European level—there is a need to strike a balance between scrutiny and control powers, however welcome they may be, and the effectiveness of bodies to deliver the necessary legislation required? I know I may incur the wrath of the hon. Member for Stone, but there is even a balance between the involvement of scrutiny Committees at national level and the ability of national Governments to do the job. I recognise that he thinks there could never be enough scrutiny. That is especially true given that we are talking about potentially thousands of detailed technical documents that in some cases relate to the changing of deadlines or the redesign of forms. In broader European terms, that may be increasingly relevant in an enlarging Union. The 27 current members pose enough of a challenge, but we may be looking at an even greater number in the future. Does the Minister believe that the arrangements under consideration strike the right balance between those two important and competing demands on the process, and should that be the end of the debate on the level of scrutiny required?
Mr Lidington: I suspect that we shall never reach the end of the debate about the level of scrutiny required. The short answer to my hon. Friend’s question is yes, we must achieve such a balance. To be fair, the scrutiny Committees are vigilant about the need for scrutiny, and jealous of the right of Parliament to scrutinise legislation that is binding on this country and can sometimes involve imposing penalties on organisations or individuals in the United Kingdom. I do not blame them at all for that.
In my experience over the past 12 months, however, the Committees have been sympathetic when we have been able to persuade them of a genuine need for urgency. For example, they accepted with good grace the scrutiny overrides on some of the sanctions measures that had to be taken at short notice to ensure that the
Emma Reynolds: There is a risk that the move from common commercial policy, in which a qualified majority is needed to block a measure rather than a simple majority, will strengthen protectionism in the European Union. How will the Government guard against that under the new framework?
Mr Lidington: The hon. Lady is right; that risk certainly exists. If I were to rewrite history—I am gently chiding the hon. Lady and her party, but until the treaty of Lisbon, such commercial policy decisions were not subject to the comitology process. We have to come to terms with that as a consequence of that treaty. My officials, and those in the Department for Business, Innovation and Skills who report to my hon. Friend the Member for Kingston and Surbiton (Mr Davey), have done a good job in considering the regulation line by line and working out how to safeguard the free-trade position that this country has always supported.
Perhaps I can provide the hon. Lady with a little detail. Working with other like-minded member states, we secured provisions in the regulation for additional consultation by the Commission with member states on anti-dumping and countervailing measures, as well as a transitional period of 18 months until the qualified majority vote applies in the appeal committee. At the moment, non-standard rules apply in decisions on anti-dumping and countervailing duties, notably simple majority voting. As part of the process of moving to QMV, it is appropriate to maintain existing requirements for the Commission to consult with member states—that is in article 5.5—and that a transitional period is foreseen until QMV applies from September 2012.
To be quite honest with the hon. Lady, we would have preferred a longer transition period, but many other member states wanted no transition period, and wanted to move straight from simple majority to QMV, and 18 months was the best compromise that we could achieve. It was not something that was achieved easily, but we maintained a blocking minority to defend the free trade interest and eventually other member states that had opposed our position were prepared to move towards it.
As for safeguard measures, the UK, along with other member states, was successful in retaining the status quo on how the Commission can adopt multilateral safeguard measures. The Commission can only adopt an implementing act if a qualified majority vote is in favour either in the examination or in the appeal committee. It might be helpful if I deal with the question that the hon. Member for Wolverhampton North East asked about why the common commercial policy is not included on the list of sensitive matters in recital 14. It is a bit like the issue involving the transitional period for voting methods. We would have liked it to be included in recital 14, but there was not sufficient support from other
Mr Baron: May ask my right hon. Friend to return briefly to article 7 and the exceptional circumstances in the statement? In complimenting him on his expertise, I find it slightly strange that what could be an important statement—after all, it was made at the behest of the UK—in explaining the limited circumstances in which the power will be used has not been included in the documents that have been sent to us, although apparently a statement has been produced. Will he ensure that the statement is sent to us and, more importantly, can he assure us that it will be subject to parliamentary scrutiny somewhere in the system because, to my knowledge if only because of the absence of the papers in the information that we have been sent, that has not been the case to date?
That the Committee takes note of European Union Document No. PE-CONS 64/10, relating to a Draft Regulation laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers, which was agreed by the Council and Parliament at First Reading and formally adopted by the European Council on 14 February 2011; and supports the Government’s approach to ensure Member States can examine and scrutinise fully implementing acts before they are adopted by the Commission.—(Mr. Lidington.)
Emma Reynolds: I want to pay tribute to the work of the European Scrutiny Committee on the draft regulation and for referring it to this Committee. The European Scrutiny Committee plays an essential role in ensuring that there is democratic accountability of the Government’s position in negotiating draft EU legislation. Some critics of the European Union argue that there is a democratic deficit in the European Union. However, if the system works as it should, with the European Council and the European Parliament jointly deciding on legislation as co-legislators with equal power, the democratic processes of the European Parliament, which is elected, and the European Council, which is made up of Ministers from elected Governments, should not comply with or fulfil the criticism that there is a democratic deficit.
Additionally, the scrutiny process of the House provides a further democratic check on the process. However, our worry is that the lack of engagement from the Government with such an important regulation has weakened their democratic accountability, so the scrutiny function of the House must be taken seriously in future. I welcome the Minister’s reassurances in that regard.
Turning to the substance of the regulation, as set out by the hon. Member for Dudley South, the pre-Lisbon arrangements that are in place until the regulation
The Government claim to have achieved a victory by insisting on the establishment of an appeal committee. I welcome the clarifications that the Minister has provided, and the Opposition believe that if that committee works properly it will provide an additional check and balance. Some might argue that the new appeal committee is not an additional layer of scrutiny but it could be used to get around a negative opinion on the examination procedure. I hope that that will prove not to be the case.
The European Union’s common commercial policy is now within the scope of article 291, as I have mentioned, and as such it moves from a procedure in which those opposing any change need a qualified majority instead of a simple majority. It will be of concern to Members in all parts of the House if the policy results in a strengthening of EU protectionism, although it is hard to know before the regulation comes into force whether that will be the case. The Opposition will watch developments carefully in this area. We are at one with the Government in strongly believing that one of the strengths of the European Union is its ability to negotiate trade agreements with countries beyond the EU. Increased trade should be in the interests of all countries and their peoples, provided that it is in the spirit of the rules that have been set out by the World Trade Organisation.
To sum up, the test for this regulation is whether it leaves intact the influence of member states in comitology. An indication of failure would be that the regulation would result in a weakening of member states’ influence and in a strengthening of the Commission’s power. We will be watching to ensure that the regulation passes that test. Even though there have been mistakes in the scrutiny process and some delays, having heard the Minister’s explanations and reassurances I confirm that the Opposition support the motion.
Mr Cash: I will be brief, because we have had a lot of questions and the matter is incredibly complicated. I have concerns about these sorts of procedures. As Maine said in “Ancient Law”, justice is to be found in the interstices of procedure. This is a procedural provision, and unfortunately a lot of injustice can come about as a result of opaque procedures. I have alluded to the tyrant Henry VIII, and we call such provisions Henry VIII clauses because they are enabling provisions within a framework. It is a kind of world within a world and the deeper one gets into that world, the nearer one gets to obfuscation and to problems.
I do not believe that any reasonable person, even if they were a qualified lawyer, could reasonably be expected to identify the impact that the proposal will have on people’s daily lives. That is the problem, and in a direct way it is an infringement of our democratic procedures. There was a serious lapse in the scrutiny process, and I
“I would like to thank the committee for inviting me to discuss this important issue but feel it is more appropriate for the Minister for Europe, as lead Minister on this dossier and also as Parliamentary Relations Champion for the FCO, to take the opportunity of the European Committee debate not only to discuss the overall Comitology Regulation, but also to outline what action is being taken within the FCO to ensure proper Parliamentary scrutiny can be undertaken. We are working hard”—
blah, blah, blah. I say this with absolute deliberation, because we had an exchange on article 7. As the questioning was coming to an end—and I just missed the opportunity to return in time—I took the opportunity to check with the European Scrutiny Committee advisers whether, as the UK requested, the statement explaining the limited circumstances in which this power will be used was available. We are told that the statement was prepared by the Commission. I am afraid to say that I was advised, as Chairman of the European Scrutiny Committee, that we have no such document. That is a very serious omission.
Although the Foreign Secretary and the Minister have informed us that they will ensure that proper parliamentary scrutiny will be undertaken, it is understandable that I am concerned, if not disturbed. This is basically a let-out provision—I quote: “exceptional circumstances”. I have concerns about Henry VIII clause-type operations and things of that kind. I have concerns in relation to its giving rise, as I said in my remarks, to significant disruptions in financial markets, given its importance to the current crisis in the European Union and the complete failure of its economic regime, though this is not the time to debate that. This is a provision for implementing power that engages and interconnects with the operations of financial markets and their disruption.
Article 122 was used unlawfully, of that I have no doubt whatever. The European Scrutiny Committee said that it was legally unsound, and no attempt was made by the Government to challenge the unlawfulness—as I put it—of that provision before the European Court. The two-month period expired before that Committee was convened, and before I became Chairman. What I am trying to say, in a nutshell, is that I think that there has been, and continues to be, an attempt to prescribe a regulation that provides for procedures—I will now quote from our conclusion—
I always try to be generous as far as possible, but I think that the Government are trapped by the Lisbon arrangements and by the process of integration as it has evolved. They are doing their best with things such as proposing fall-back positions and all the things that we have discussed already, which I do not need to rehearse; but unfortunately, that does not stop the process. Some parts of that process, like the curate’s egg, are bad and are not prevented. Our citizens, the people we represent, will be inflicted with arrangements that will have a significant impact. Some of it may be very damaging, by virtue of inadequate procedures that we assume would not have gone through if we were running our own affairs. We would say to the Minister, “You cannot do that,” and we would vote it down.
I have made my general point; I am concerned about this. I would not have come today, as I am not, strictly speaking, a member of the Committee. I am, however, Chairman of the Scrutiny Committee, so I came because these procedural arrangements—these devices to provide for subordinate arrangements to go through on the process of comitology, wrapped up in language that is opaque and sometimes deliberately obfuscating—take us further and further away from the citizen. I think that this is just such a provision, and it is an accident waiting to happen. We have every reason to be deeply concerned, even at this late stage, despite the letter that I received on 13 February and the follow-up from the Foreign Secretary on 1 March. No, I beg your pardon—anyway, it is the letter that I received on 28 February.
Despite all that, I remain concerned. On the Government’s part, some of this was not deliberate. Some of it is an omission and some of it is the fault of the previous Government in allowing the Lisbon treaty to go through to create the circumstances in which all this can happen. I regard the matter with concern. We will be watching the whole thing like a hawk. In the current circumstances, the fact that we do not have the statement, which my hon. Friend the Member for Basildon and Billericay adroitly picked up on and which I was going to raise myself, is just another illustration of the lack of the tenacity and persistent analysis that would have enabled this Committee to have that important bit of additional information. So there we are. I feel concerned and disappointed by the way this has gone.
Martin Horwood: I will be reasonably brief as I can already hear the all-party parliamentary jazz appreciation group meeting, which I hope to attend later, starting below us. I think the hon. Member for Stone should worry less about Henry VIII and look more to the example of Henry II and his great wife Eleanor of Aquitaine. They did not sit in London worrying about what was happening in Europe; they got out there and got involved, albeit in a slightly more militaristic way than might be advisable today.
I do not detect in this regulation a great radical shift in power between the European Union and the member states, including the United Kingdom. I think it represents a practical improvement in the working relations, most of all between the Commission and the Council of Ministers, and including the very important checks and balances very effectively negotiated by the British Government.
The only one of those checks and balances that seems slightly strange and which I would question a little, is the one that seems to have effectively limited the scrutiny role of the European Parliament. The European Parliament is our Parliament too, and when we address the democratic deficit we should not always respond to that by trying to claw more powers back from the European level or by overlaying more and more scrutiny in ever more
The Government should play a leading role in Europe. We are a leading European nation and we should concentrate on how to play that leading role in Europe and not collect spanners to throw into the works of the European Union. It is important for all of us that the EU works effectively and I was reassured in that respect by the Minister’s comments about the balance between scrutiny and effectiveness. We are getting to the point where through a process of iteration we have struck the right kind of balance between scrutiny and effectiveness. I hope that in future we will not devote too many hours of this Parliament’s time to the hows, but devote more to carrying out that scrutiny on matters of real substance.
Mr Lidington: I am grateful to all members of the Committee for their participation in the debate. I remember saying to a former UK permanent representative to the European Union that I was immersing myself in the new comitology regulation and he groaned and said, “That is a most unwise thing to do, Minister.” I think it is important that we look in some detail at these enabling powers and the quality of the safeguards for member states embodied in the regulation. I should like to deal first with two issues raised about the absence of documents.
My hon. Friends the Members for Basildon and Billericay and for Stone both asked me about the statement by the Commission. The Commission agreed during the course of negotiations that it would issue a statement to describe how it would exercise the powers given to it. That statement has still not been published by the Commission. Not only the UK Government, but a number of other member state Governments are saying very clearly to the Commission that they need to hurry up and deliver this. The undertaking has been given and I have no reason to believe that the Commission is reneguing on that pledge. Obviously, as soon as the final version of the statement is published we will ensure that it goes to the Scrutiny Committee and I suspect that it might be helpful if, when that time comes, I ensure that it is also circulated to Members who have served on the Committee this afternoon.
Mr Cash: Given the circumstances that have emerged—the fact that the Minister probably thought there was such a statement although there is not, and that it refers to limited circumstances and we do not know what those are—would he be good enough not only to let our Committee have the statement, which I am sure is a requirement, but at the same time to make sure, if there is anything in it that, on reflection, he thinks we would be concerned about, that he gets on to the Commission tomorrow, as it were, and explains to them that it is not good enough if the limited circumstances that they are describing simply do not pass muster?
Mr Lidington: We would certainly make vigorous representations to the Commission if we felt that they had not delivered on what they pledged, but I want to come on to the substance of article 7 and to the fears expressed by my hon. Friend a little later in my remarks.
I want to put on record a response to the question posed by the hon. Member for Linlithgow and East Falkirk. I regret that he is no longer in his place, but he asked about the rules of procedure for the appeal committee. There was a straightforward technical reason why they were not included in the pack. The rules of procedure were not made available to the UK Government until 5 May and my understanding is that the document pack has to be submitted two weeks before the debate takes place. I regret that the rules were not included in the pack today. Clearly, it is within the power of the Scrutiny Committee to seek a further occasion either to take evidence or have a debate on those appeal committee rules if it chooses to do so.
Moving on to some of the points of substance made in the debate, I say first to my hon. Friend the Member for Cheltenham that I do not share his fears about the exclusion of the European Parliament from the process of oversight. I think the treaty position is clear that the new articles under Lisbon exclude both the Council and the Parliament from any role in the oversight of the Commission’s proposals for implementing acts. The role of the Council and the Parliament is different. Their role is to frame the parent legislation that confers those implementing powers upon the Commission and to include in such a parent act whatever conditions for the exercise of those powers they deem appropriate. We felt that that arrangement respected the competencies of Parliament, Council and member states as set out in the relevant clauses of the treaties.
The hon. Member for Wolverhampton North East asked whether the appeal committee might not, paradoxically, provide a means to allow the Commission to find a route by which to overrule a block imposed by the examination committee. Clearly that is possible, but for that to happen a number of member states would have to change their votes. The assumption would be that the Commission would receive a qualified majority vote in the examination committee blocking the measure that it had brought forward. The measure would then go before the appeal committee and it would decide to change its mind. The chances of that happening are slim. In the case of there being no opinion in the examination committee, it is more likely that the Commission would then go to the appeal committee. If the examination committee was finely balanced, and was perhaps one country short of a qualified majority in favour of the Commission proposal, I could imagine circumstances in which that country was reassured in the intervening period before the matter reached the appeal committee.
The advantages of having the appeal committee are greater than any possible problem; in particular it provides an essential safeguard, because in the case of what I consider to be worthwhile and justifiable provisions, the Commission should be allowed the right, in certain defined circumstances, to bring forward implementing measures urgently to deal with a particular crisis.
Mr Cash: The Minister will understand that there has been some enthusiasm, as it were, to have an appeal committee and questions of rules of procedure and so on. I dare say that he understands too, does he not, that to have an appeal committee, but not to know its exact composition and what kind of decisions it is liable to take, does possibly lead to an exclusion of the normal
Mr Lidington: The option of judicial review, in the sense of going to the European Court of Justice, is clearly there if any member state or EU institution considers that powers have been exercised in a manner that is not authorised by the treaties or is not authorised by the piece of legislation on which the implementing act has been based. The appeal committee serves a different purpose: it is to provide a means for member states to exercise scrutiny and supervision of implementing measures brought forward by the Commission on the basis of powers properly conferred on them through basic acts. By definition, they are those that have been agreed by the member states as the Council and by the European Parliament.
My hon. Friend asked about the membership of the appeal committee. It is up to member states to decide who should represent them on the examination committee and the appeal committee. We envisage that the appeal committee should be staffed by senior officials. We think that the normal rule should be that the people on the appeal committee, like those on the examination committee, should be expert in the subject matter under discussion, since by definition they are almost certain to be dealing with the implementation of technical legislation.
Mr Cash: I was only going to say that it can be a circular argument, because what is decided in terms of the legal instrument that is part of the implementing procedure itself becomes by definition the legal means whereby the issue will be resolved. The Minister may understand that within the framework of providing for comitology and enabling legislation, there comes a point where the fall-back position of the Commission is to say, “Oh well, this is actually a legal instrument, and therefore it does contain within it the necessary power of implementation.” It gets complicated, but that is part of my earlier argument, because I think this process has the potential to be extremely opaque and difficult to deal with.
Mr Lidington: That brings me to the questions that my hon. Friend asked about article 7. A general point applies to all implementing acts, not only those subject to the article, which is that any implementing act can be brought forward by the Commission only on the basis of a parent, basic act. Implementing powers exist only in relation to specific pieces of legislation that have gone through the proper EU legislative process.
My hon. Friend, as is often the case, has taken us into realms of constitutional and legal principle, and it is always good to be reminded of the quotation from Sir Henry Maine with which he introduced his remarks. I shall resist the temptation to engage with him on the concept of Henry VIII clauses, which I have always
What I will say to reassure my hon. Friend is that although we are dealing with a new system of comitology, the principle of comitology and tertiary legislation had been established in the EU for years before the UK became a member and has been there throughout our membership, so it is not new. Concerns about competence creep are perfectly valid, and he knows that I share his concern that we resist the extension of the competencies of EU institutions beyond those in the treaties, but that risk or creep comes from the framing of EU directives and regulations rather than from anything that derives from comitology.
Article 7 is a derogation from normal processes. It can be applied only as an exception to what would otherwise be the standard rules, and that exception is available to the Commission only in the specific cases described in article 7, namely, disruption to agricultural markets or a threat to EU finances in the context of
That the Committee takes note of European Union Document No. PE-CONS 64/10, relating to a Draft Regulation laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers, which was agreed by the Council and Parliament at First Reading and formally adopted by the European Council on 14 February 2011; and supports the Government’s approach to ensure Member States can examine and scrutinise fully implementing acts before they are adopted by the Commission.
|©Parliamentary copyright||Prepared 19th May 2011|