Enhanced cooperation for the EU Patent: etc - European Scrutiny Committee Contents

Examination of Witnesses (Questions 1-48)


11 MAY 2011

Q1   Chair: Right, Minister. Thank you for coming this afternoon. As you know, we have a number of questions to ask you. The first question relating to this Council Decision concerns the fact that you provided us with the Explanatory Memorandum on 7 January, saying that, in its request to the Commission, the United Kingdom included a caveat concerning the opinion of the Court of Justice. This, of course, was to allow the UK to withdraw from the request for enhanced co-operation before—and I emphasise "before"—the Council Decision was adopted. Can you explain what you meant by the word "before", because the actual issue was whether the Member States could withdraw after the Decision was adopted? It is paragraph 24 of your Explanatory Memorandum, and do feel free to ask those people who wrote it, if you feel like it.

Baroness Wilcox: That is very kind of you. One tries to be prepared, as all good Guides, and then discovers that the one question you get asked straight off is the one thing that you cannot find the paragraph for.

Q2   Chair: Well, that is why we are here, you see. We are the Scrutiny Committee.

Baroness Wilcox: Yes, I know you are, absolutely. First, can I just thank you, Chairman, and members of the Committee, for asking us to come along and explain ourselves? As this is a technical issue, I thought it would be helpful for me, as you can see, if I brought with me Peter Holland, who has been Director of International Policy in the Intellectual Property Office since 2008, with responsibility for international and EU affairs; Liz Coleman, head of the patents policy division at the Intellectual Policy Office, and she has advised on the EU patent and other matters to do with that since 2000; and Nicholas Fernandes, the legal adviser for the Department for Business, Innovation and Skills, and he has been advising on the European Union patent, as well as other intellectual property matters, for the past 10 years. I hope that you will allow me to defer to them if I think that they can give you a clearer answer than me.

Q3   Chair: But bearing in mind, of course, that under the principles of accountability the Minister is responsible.

Baroness Wilcox: I do fully understand that, but I do not want to delay you because I do not expect you want us in the room for any length of time, just to answer the questions.

Q4   Chair: Well, not any undue length of time.

Baroness Wilcox: Not unduly.

Q5   Chair: So what is the answer to the question?

Baroness Wilcox: On the answer to the question, as I understand the question that you have asked, if I can do it in the order that I worked in, that will answer you, I think. We had the policy cleared across Government for enhanced co-operation; that was important for us to go forward. We were then cleared by the House of Lords Scrutiny Committee to go forward. We knew that 10 March was a critical date for us, and we had to take a decision as we had not yet finally heard whether you were going to withdraw your objection or not. Therefore, we then went ahead as we had not yet received the final answer to the letter that we had written to you. It was a decision that we took because 10 March was when the vote was going to be taken and we were very keen to make sure that we were in at the beginning, rather than having to withdraw from that Decision. After all, we had waited 40 years to get that far, and it seemed, as we had cleared from our own legal side, that we could withdraw at any time. That is the reason that we went ahead: we believe that we have clearance to withdraw at any time now to make sure that we have things exactly as we would like them. I know that that is not your view.

Q6   Stephen Phillips: In your answer, you referred to the withdrawal by this Committee of its objection. Now, what did you mean by that? Do you understand what this Committee does?

Baroness Wilcox: Yes, I think I do. Do you want to—

Q7   Stephen Phillips: No, forgive me Minister. Mr Holland can give his answer in a moment, and no doubt he advises you, but what do you understand this Committee to do?

Baroness Wilcox: Do you want me to read out what your Committee's requirement is?

Q8   Stephen Phillips: Tell me what the scrutiny reserve is.

Baroness Wilcox: What I was concerned about clarifying was the fact that this Committee did not believe that we would be able to withdraw once we had signed up.

Q9   Stephen Phillips: I understand that.

Baroness Wilcox: That was the legal advice that you had been given. We took our own legal advice—

Q10   Stephen Phillips: I do not want to interrupt you, but we will come on to that in due course.

Baroness Wilcox: We found that in actual fact we feel we can, and we are still confident that we can, so that was the reason that we went ahead. I have to say that I would not take lightly going against this Committee. I would not. I am here to say that I am sorry that I had to do so.

Q11   Stephen Phillips: I am grateful for that, because that is the first time you have apologised. What is the scrutiny reserve and how does it work?

Baroness Wilcox: Let me give you a full detailed answer to that.

Q12   Stephen Phillips: Perhaps we can deal with it in this way: without consulting your notes, are you able to tell this Committee what the scrutiny reserve is?

Baroness Wilcox: Okay. "No Minister of the Crown should give agreement in the Council or in the European Council to any proposal for European Community legislation or for a common strategy, joint action or common position under Title V or a common position, framework decision, decision or convention under Title VI of the Treaty on European Union."

Q13   Stephen Phillips: That is what it says. Are you reading that for the first time?

Baroness Wilcox: I am reading it; I am reading it to you.

Q14   Stephen Phillips: Are you reading it for the first time yourself?

Baroness Wilcox: Do you mean have I understood that that was the situation before I read it out?

Q15   Stephen Phillips: Let's come on to that in a moment. Are you reading that for the first time yourself?

Baroness Wilcox: I have read this out before.

Q16   Stephen Phillips: Are you reading that for the first time to yourself?

Baroness Wilcox: No, I have read this to myself before.

Q17   Stephen Phillips: Right, so what is the scrutiny reserve?

Baroness Wilcox: The scrutiny reserve—that which I have just read to you, no?

Q18   Stephen Phillips: What does it mean? What is its effect?

Baroness Wilcox: I think I could only but repeat it to you. It has been written carefully.

Q19   Stephen Phillips: Well, would you agree with me that what it means is that the Government cannot go off to a European Council and agree a document that this Committee maintains under the Scrutiny Reserve and which has not yet been debated either in a European Standing Committee or on the Floor of the House of Commons? That is what it means, isn't it?

Baroness Wilcox: Well, yes. If we have good reasons to have to go back and look again, and if we have good reasons to override it, then we would do so. We would come here and we would try and explain to you why we had. In fact, I think in the exchange of letters that we have had, we have always tried to be very clear about what it is we are doing, and always try to keep in mind what we are doing for Great Britain.

I know a lot of people on this Committee have been at this a lot longer than I have, trying to get a European patent through. When it came to the legal decision as to whether we thought that we would be able to withdraw, our legal advice was that we would, so the Government took the decision that this was such an important moment that this was a decision that we would take—to override, with just cause.

Stephen Phillips: Perhaps we will come back to that in due course.

Q20   Chair: I would simply like to add to that the fact that, as you said at the beginning, we have been at this for 40 years. In this context, some might interpret that as suggesting that, for you and the Government, this was a holy grail, sufficient to say, "Well, it doesn't really matter what the European Scrutiny Committee thinks about this. We will just go ahead anyway. If they ask us to come along, we can explain it afterwards." That is possibly a reasonable interpretation of what happened.

Q21   Mr Clappison: Just briefly, following on from what Mr Phillips was saying, I appreciate, Minister, your good motivation on this and that you wanted to do the best for the country, but frankly, all Ministers think they are doing the right thing when they take decisions, so every time a Minister overrides the scrutiny reserve they can come along and say the same thing. The effect of that is to weaken Parliament, because the purpose of the scrutiny reserve is to ensure that Parliament at least has a say on European decisions on European law before they are taken and is not presented with something as a fait accompli.

I will come to the point of whether it is possible for us to withdraw, but that is a bit of a red herring as far as the scrutiny reserve itself is concerned. It is just no answer to the breach of the scrutiny reserve to say, "Never mind, we can withdraw from it later," is it?

Baroness Wilcox: We take the work that this Committee does very seriously. We thought long and hard and took advice as to whether this was a moment for us to go forward for this opportunity, and with the advice we were given, we felt that, legally, we would be able to withdraw. It is not our intention even to hope that we would have to withdraw.

One hopes that this will go forward. It is an opportunity for Great Britain and the other member states to be able better to compete in the world for patents, which cost us an enormous amount of money to translate into other languages within the European Community. We are a member of the European Community, as Mr Clappison well knows. Therefore, this is an opportunity for us to do something within the European Community that is of enormous benefit to Great Britain.

Q22   Mr Clappison: All Ministers come along and say that sort of thing about every decision they take. This is preserving Parliamentary democracy and Parliamentary scrutiny, and, as far as that scrutiny is concerned, whether or not we are able to withdraw is not an excuse for breaching the scrutiny, is it?

Baroness Wilcox: The reason the Committee gave was that withdrawal was not possible at all in their view.

Q23   Mr Clappison: No, the Committee said that it wanted to hold a document for scrutiny, unless it clears it from that. What the Committee was saying was that it held it under scrutiny, because it wanted it to be debated in Parliament. A concern that the Committee also expressed was whether it is possible to withdraw, okay? That is a secondary point. The first point is that the Committee held it under scrutiny, which meant that it wanted to debate whether it was possible to withdraw, but the Committee expressed its concerns as to whether it was possible to withdraw at all. Now, is it your view that it is legally possible to withdraw? What is the basis for that and what is the basis in treaty law for that belief?

Baroness Wilcox: Yes, it is possible for us to withdraw. The European Union treaties are actually silent, as you know, on withdrawal from enhanced co-operation. This does not mean that the treaties prohibit withdrawal from enhanced co-operation. The Government's view is that withdrawal is allowed under the EU treaties. The Commission's statement in the minutes of the Council on adoption of the decision of 10 March is declaratory of the position under the EU treaties that the treaties allow for withdrawal from enhanced co-operation, and this is entirely consistent with the rules on enhanced co-operation and has been accepted by the Commission, the Council and the member states. I cannot say often enough that we would not have come to this decision lightly. I know you say that every Minister would say that, but in this instance our difficulty was that our legal advice was not the same as your legal advice.

Q24   Mr Clappison: With respect, it is nothing to do with legal advice. It is a question of scrutiny in the first instance. The legal advice was a point that the Committee, as a scrutiny Committee, drew to your attention. However, this is not a question of legal advice; this is a breach of scrutiny reserve. I understand that you are doing it for a good motivation and so on, but I have to say that from our point of view that is simply not good enough.

Baroness Wilcox: Right, right.

Q25   Stephen Phillips: I do not want to interrupt James, but it is important not to elide these two distinct points. We can come on to discuss the basis for your legal advice and whether it is correct in a moment. The point that Mr Clappison is putting to you, Minister, is that the document was under scrutiny. Now, it seems that the Committee takes a different view from your advisers in relation to the proper construction of the Treaty on the Functioning of the European Union, but that is entirely irrelevant to the fact that the Committee had the document under scrutiny. In your answers a moment ago, you said, "Well, we take a different view on the law and we thought our view was right, and that entitled us to override scrutiny." Now, is that the position that you want to adopt in the face of this Committee, given that the two issues are entirely distinct and that the first is irrelevant to the fact that scrutiny was overridden?

Baroness Wilcox: I suppose I was rather thinking what would have happened if the UK had not participated.

Stephen Phillips: Again, that is the decision of 10 March and we can come back to that.

Q26   Chair: Could I intervene at this moment? I really have to stress one point. As Stephen Phillips developed in his analysis, and as we know very well, and hope you do, the whole object of the scrutiny reserve is that no Minister, under the Standing Orders, is allowed to make a decision in the Council of Ministers while it is still under scrutiny reserve. What goes with it—this is the crucial element, which James Clappison was referring to—is the democratic question whether the matter will be debated in the House of Commons.

If Ministers say, "We think that we are right, and it has 40 years of development and therefore it goes without saying that this has to go through," none of that is relevant in the context of the necessity under the Standing Orders of Parliament to require a debate if we say that there should be one. It is not just an option; it is the democratic right of Members of Parliament to be able to debate this either in European Committee or on the Floor of the House. The Government is not entitled to take a view as to what the merits are until the matter has been decided by the debate that has taken place in Committee or on the Floor of the House. It is about debate; it is not about decision.

That is the question that is really troubling us, because it appears to me—I was not quite prepared for this when we started out on this session—that you really do believe that the Government has the right to override the Committee simply because it is a matter of what you perceive to be the national interest. Actually, there is a place called Parliament with elected Members of Parliament who gather together for the purposes of making decisions like that and calling the Government to account.

Baroness Wilcox: Issued by the Department of the Clerk of the House in April 2010, I can tell you that it says that "for 'special reasons', provided that the Minister explains those reasons to the Scrutiny Committee at the first opportunity after deciding to give agreement. In practice, Ministers usually inform the Committee in advance. If a proposal is awaiting consideration by the House, the Minister must inform the House at the first opportunity after giving agreement." I hope very much that you would agree that we actually had.

Q27   Chair: But the question is, what were the special reasons?

Baroness Wilcox: The special reasons were that we had no way of influencing the actual gathering as to telling them that we needed to delay to be able to come back and to discuss further as to what the law was on this for us. We had the date of 10 March and that was the date on which we would either have to withdraw or vote. This was an opportunity for us to stand alongside the usual things that you already know—that common patent has been subject to negotiation since the 1960s. Here was the date, here was the time, this was the moment when we would go forward—when 25 out of 27 countries were going to sign together.

We took with us a strong caveat. We were worried about the Patent Court, and so the reason for us going ahead was that we wanted to be part of it on behalf of Great Britain. The policy had been cleared across Government for us to take part in enhanced co-operation. We made it very clear that not only could we withdraw at any time, but that we had a special caveat in it about the Court. In establishing the Patent Court, the European Court of Justice should not take on wider powers. So, the reasons that we would give, from the special reasons that I have just read out, which are available under the scrutiny reserve resolution. That is how we felt we could at least go forward and sign. I cannot say often enough that it gives me no pleasure to sit here and have to explain why it is that I have taken a decision against this Committee's advice. I would not like to think that I would have to do so again, but in that circumstance I felt that it was in the best interests of our country because we had the legal ruling that it was not binding. It is not binding; it will be over a year before we even get to the point whereby it would be binding. There is ample time for debate during the months to come.

Q28   Stephen Phillips: Minister, you wrote to the Committee on 9 March, the day before the Council decision. I am sure you have a copy of your letter with you. Did you at any stage in that letter refer to either the scrutiny reserve resolution of the House of Commons or to special reasons, or identify what those special reasons were?

Baroness Wilcox: Do you want me to read the letter again?

Q29   Stephen Phillips: No, I do not. I want an answer to a simple question. You have said you were entitled to override scrutiny because there were special reasons.

Baroness Wilcox: No, no, no. Not, "I have said". I have read, and I hope that minutes are being taken. I have read to you from your own papers. I have read that to you; I have not invented it.

Q30   Stephen Phillips: Forgive me, but inherent in that answer is the suggestion—the fact—that you gave no consideration to whether you were able to override the scrutiny reserve at all; you just did it. You are now seeking to justify that subsequently on the basis that there were special reasons, is that right?

Baroness Wilcox: I say in the letter, "I am writing to give you advance warning of the possibility that the Government may need to override parliamentary scrutiny on a proposal for a Council Decision authorising enhanced cooperation in the area of creation of unitary patent protection."

Q31   Stephen Phillips: Right. Let's go back over the two questions that I have just asked you because they are important. Is there any mention anywhere in the letter of 9 March of the existence of special reasons entitling you to override the scrutiny reserve?

Baroness Wilcox: The letter goes on, "The UK strongly supports the creation of a European patent system that delivers real benefits for business. We see enhanced cooperation as the only viable way forward, and it would be extremely regrettable if we were unable to support the authorising Decision at the Competitiveness Council on 10 March.

In my previous letter of 16 February I explained that we had sought and obtained assurances that the UK could withdraw from the request for enhanced cooperation, and we are confident of our ability to withdraw. The option of postponing the Council Decision was not available to us, although we did discuss the possibility of postponing the decision with the Commission, other Member States and the Presidency. Reopening the text of the decision itself was also not a viable option given the risk of further amendment and debate, which might have held up progress." We had understood the concern of the Committee was that we could not withdraw.

Q32   Stephen Phillips: The answer to my question is no; there is no mention of special reasons, is there?

Baroness Wilcox: Well, we had not realised that it was necessary to refer specifically to the wording "special reasons" in the answer. If you feel that we should have done, I apologise for that and we will try to get it right for next time.

Q33   Stephen Phillips: So is your evidence to the Committee in fact that you did give consideration to the scrutiny reserve, and that you thought there were special reasons entitling you to override it?

Baroness Wilcox: Yes.

Q34   Chair: Could I ask you a simple question? Supposing you had abstained, would that have affected the qualified majority vote?

Baroness Wilcox: Well, it would in that we would not have been in it.

Q35   Chair: Yes, but you had the option of abstention.

Baroness Wilcox: I do not think that would have been sufficient at that time.

Q36   Chair: So, come what may, you were determined to go ahead, irrespective of whether the whole question of debate in the House of Commons was irrelevant?

Baroness Wilcox: Oh no, Chairman, no. We had to ascertain first and foremost that we would be able to withdraw. The important thing was that we were able to withdraw.

Q37   Stephen Phillips: I want to come back to that legal question in due course. Now, under the Standing Orders of the House of Commons in relation to public business, where the scrutiny reserve is overridden, the Government, or the responsible Minister, is required to give notice to the House through this Committee at the first opportunity after agreement has been given in Council overriding the scrutiny reserve. When did that happen?

Baroness Wilcox: On 13 April.

Q38   Stephen Phillips: Do you consider that to have been the first opportunity?

Baroness Wilcox: Sorry, 17 March, I apologise. No, they wrote on 13 April. I am sorry, you wrote to me on 17 March and I replied to you on 13 April. I have a son of my own who is a QC, so I know all about not trying to put words into the mouth of a QC.

Q39   Stephen Phillips: I do not want to put words in your mouth. I want to get—

Baroness Wilcox: If you are trying to tell me that the only information you had was 9 March, that would not be right, and 13 April is when we responded to your letter of 17 March.

Q40   Stephen Phillips: Right. On 9 March, you wrote to us and said it may be necessary to override scrutiny. We have already discussed whether or not you made any mention of special measures entitling you to do so, and I have your answer in relation to that. On 10 March, you gave assent to the decision in Council on behalf of the Government of the United Kingdom. Under the Standing Orders of this House, without this Committee having to write to you, you are then obliged to give notice to the House of Commons that the scrutiny reserve has been overridden. Did that happen?

Baroness Wilcox: I suppose we are depending upon the fact that we wrote on 13 April.

Q41   Stephen Phillips: That is a letter from you that begins, "Thank you for your letter of 17 March," addressed to the Chairman of this Committee?

Baroness Wilcox: It does.

Q42   Stephen Phillips: So it is a response to Mr Cash's letter, isn't it?

Baroness Wilcox: Yes.

Q43   Stephen Phillips: So in fact, again, the answer here is no. You did not comply with the Standing Orders of the House of Commons and you did not, at the first opportunity, give notice to the House of Commons through this Committee that you had overridden the scrutiny reserve.

Baroness Wilcox: Well, in actual fact I think that you wrote before— Who wrote before?

Mr Clappison: Can I just come in on that point?

Chair: James?

Baroness Wilcox: I am sorry; I am trying to get the dates all right here.

Q44   Mr Clappison: Could you get the dates right first, and then, when you have the dates right, could you answer this simple question? Do you think that the way you have responded to this Committee meets the requirements of Standing Orders, which you have just heard?

Baroness Wilcox: Possibly, yes. So we informed on 9 March, and the letter here on 3 March. This letter here. So is the answer yes or no? Looking at it like this, it does not look very good.

Mr Clappison: That is fine.

Q45   Chair: Minister, one thing that is troubling members of the Committee is that we have been going around a number of questions over the last half hour. Minister, if you would be kind enough?

Baroness Wilcox: Sorry.

Chair: We have been going through these questions for half an hour so far. There is an increasing thought occurring to some of us that maybe you have not prepared yourself very much for this session. Given the circumstances and the requirements of Standing Orders, that is, to say the least, regrettable. We do not seem to get an impression that you know on which dates the various actions took place or that you quite understand the nature of the scrutiny reserve, or indeed what lies behind it, which is the democratic requirement for debate if we suggest that that is what is required in the interests of our parliamentary process. You say you have apologised, but you have also gone on to indicate that you thought this was justified in some fashion.

Mr Clappison: That is what worries me.

Chair: That is really what is concerning us. It is not a question of whether a Government Minister thinks it is justified; it is a question whether the procedure has been followed. It is very difficult to know where to go next, because it is obvious that you are not fully prepared for this session just by the answers that we are receiving. That is rather disturbing to us, actually.

We understand that you come from the House of Lords, and therefore you are not so familiar with the rigour of scrutiny that we are used to in the House of Commons, but that does not alter the fact that, as a Government Minister, you have signed off something that effectively has precluded debate. That troubles us a great deal. Speaking for myself, I think a lot of this responsibility lies in a lack of control over the decision-making processes in your Department, which may be your responsibility, but I also feel that your advisers have fallen very short in helping you to come up to the standard of accountability that we in the House of Commons would expect. I hope that you will make that point very clear to your advisers when you get the opportunity to do so. There is a sense that there are other questions that we would like to ask. Is there any one in particular? Otherwise, I would, frankly, be happy to draw this to a conclusion and allow the Minister to go away and reflect on the matter and to decide whether there is perhaps an opportunity for us to look at it again.

Q46   Nia Griffith: If I could come in on this, obviously there is a range of opinion on the Committee about where the European Union might be going, but there is an agreement about the importance of the role of scrutiny with this Committee. On several occasions, we have tried to ask you whether there was any possibility of the decision being postponed, but there does not seem to have been any willingness on your part to engage with the Committee or to sort out means of communication with us. Nowadays, with so many modern means of communication, we would have thought there would have been some response back in some way to get some feedback from this Committee before proceeding. It seems to us that it has almost been a snub to the Committee—a decision to ignore the Committee when there could have been opportunities to contact the Chair or to ask for appropriate opportunities to discuss the matter before any ministerial action was taken.

Chair: We get the slight impression that it was a snub not just to the Committee—if I may say so, Nia—but to the House of Commons.

Nia Griffith: Absolutely.

Baroness Wilcox: That certainly was not my intention in any way at all. Of course, I will go back and talk to my officials. There was not a possibility to postpone. I had been going to Brussels for many weeks on this, so I made it very clear and checked over and over to see whether there was a chance, and there was not.

Chair: May I make a suggestion, Minister, which is simply this—

Baroness Wilcox: One of the reasons is because the Hungarian Presidency absolutely wanted to have it there and then.

Chair: Well, we understand that.

Baroness Wilcox: I know you do. Sorry, I was trying to answer the question clearly, and that is the truth. There was no opportunity for us to postpone and there was no consideration taken of anybody wishing to postpone. I think the impetus had got to the point whereby everybody really was so delighted they had got to this point, and we just could not get any support for postponement.

Q47   Chair: We know from other sources that the Hungarians had been extremely keen to see this go through during their Presidency, and I am increasingly getting the impression that that came ahead of—

Baroness Wilcox: No.

Q48   Chair: Well, that was an impression I was getting. I think it best if we adjourn these proceedings and maybe come back again when you have had a chance to look at the matter and reflect.

Baroness Wilcox: If you give me the opportunity, I would be extremely grateful. There is no doubt that we were most concerned with the fact that we could not withdraw. I really thought that the Committee was most worried about that, but in actual fact I can now see the Committee is most worried about the democratic nature of the way the decision was taken and the fact that the Committee should not be overridden without good cause.

I thought that we had everything here to describe it well to you, and in fact I would have made some opening remarks to have done so. I do apologise. I am sorry if we have wasted your time, and I will go and talk to my officials. If you are minded to give me the opportunity to return, I would be extremely grateful, and I would be able to come back then with what I hope would be a clear picture of what actually happened. I think you know the reasons why, but I will address what went wrong and also I will think clearly and carefully about how we would ever go forward on something like this again. It has been a lesson for me, that is for certain. Thank you.

Chair: Thank you very much indeed.

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Prepared 8 June 2011