European Scrutiny Committee Contents

3 The European Regional Development Fund



COM(11) 611

Draft Regulation of the European Parliament and the Council on specific provisions for the support from the European Regional Development Fund to the European territorial cooperation goal

Legal baseArticle 178 TFEU; co-decision; QMV
DepartmentBusiness, Innovation and Skills
Basis of considerationMinister's letter of 13 November 2012
Previous Committee ReportsHC 86-xx (2012-13), chapter 2 (21 November 2012);

HC 86-xix (2012-13), chapter 11 (7 November 2012);

HC 86-xiii (2012-13), chapter 16 (17 October 2012);

HC 86-v (2012-13), chapter 9 (20 June 2012);

HC 86-iv (2012-13), chapter 5 (14 June 2012);

HC 428-lvii (2010-12), chapter 8 (18 April 2012)

Discussion in Council19-20 November 2012
Committee's assessmentPolitically important
Committee's decisionNot cleared; further information requested

Background and previous scrutiny

3.1 The European Regional Development Fund (ERDF) is the largest of the EU's Structural Funds and is one of the principal funding instruments for strengthening economic, social and territorial cohesion across the EU. In October 2011, the Commission proposed a package of measures which are intended to align expenditure on the EU's cohesion policy with the Europe 2020 Strategy. The most important element of the package is the draft Common Provisions Regulation which seeks to establish a Common Strategic Framework and a set of common provisions to govern all of the EU's cohesion policy instruments, including the ERDF and the European Social Fund, for the period 2014-20.[15] It was debated in European Committee C on 6 March 2012 but other elements of the package, including two draft Regulations on the ERDF and one on the European Social Fund, remain under scrutiny.

3.2 The draft Common Provisions Regulation proposes two objectives for EU cohesion policy: investment for growth and jobs, which would account for the bulk of EU funding, and European territorial cooperation. The purpose of the draft Regulation under scrutiny ("the draft ETC Regulation") is to establish the framework for programmes implementing the European territorial cooperation objective.

3.3 The Minister of State for Business and Enterprise (Michael Fallon) wrote to inform us on 13 November that the Presidency intended to seek a partial general approach on the Common Strategic Framework (annexed to the draft Common Provisions Regulation) and on provisions in the draft ETC Regulation on financial management at the General Affairs Council on 19-20 November. He described the content of the proposed partial general approaches and indicated that, as there was insufficient time to obtain a scrutiny waiver in advance of the Council, the Government might override scrutiny.

3.4 We noted that the Council had already agreed three "partial general approaches" covering most of the elements of the Commission's 2011 package, that we had only been willing to grant a scrutiny waiver on one occasion, and that we had consistently expressed concern that information on the scope and content of partial general approaches emerged at such a late stage in negotiations as to make timely and effective parliamentary scrutiny in advance of agreement difficult or impossible. Whilst we accepted that the substance of the changes proposed to the draft ETC Regulation appeared to be unobjectionable, we noted that, yet again, we were in a position where, even if we were minded to do so, we would be unable to consider granting a scrutiny waiver before the partial general approach was presented for agreement at the Council.

3.5 We asked the Minister to write to us again after the General Affairs Council explaining:

  • what representations the Government had made to the Presidency and other Council members on the need to allow adequate time for parliamentary scrutiny;
  • how they responded; and
  • if, notwithstanding our concerns, the Government decided to override scrutiny, to explain in specific terms the necessity for doing so.

The Minister's letter of 29 November 2012

3.6 The Minister confirms that the General Affairs Council agreed a partial general approach on the terms described in his earlier letter of 13 November, and adds:

"I regret that it was necessary to override parliamentary scrutiny on the proposal on specific provisions for support from the European Regional Development Fund to the European Territorial Cooperation Goal. However I considered that the March debate covered the majority of issues contained within the partial general approach and that there were only two articles in the blocks that have not yet cleared scrutiny. These in my view did not cause problems for the UK and were minor compared to issues in previous blocks. Nor did they prejudice the position on the EU budget and multiannual financial framework. Mr David Lidington MP, who represented the UK at the Council, reiterated the UK position that we only accepted the partial general approach on the basis that 'nothing is agreed until everything is agreed', including cross-cutting issues with other regulations, such as the overarching Multiannual Financial Framework".

3.7 The Minister explains that the Government has made clear to the Presidency and other Council members (both in Council Working Group meetings and at the General Affairs Council) that sufficient time for national parliamentary scrutiny is essential. He continues:

"In the case of the partial general approach on the Common Strategic Framework, which the House of Commons has cleared from scrutiny, our prompting led the Council Legal Service [to] provide an opinion stating that as a partial general approach is not considered a final agreement in Council, a decision to adopt a partial general approach within the eight week period after the Commission has adopted a proposal does not violate the Treaty. Even after having received this opinion, we continued to raise this matter in the Council."

3.8 Turning to the reasons why the Government decided to override scrutiny in order to support the partial general approach, the Minister explains:

"The rationale is that it is important to agree a broad consensus within the Council in order to start informal discussions with the European Parliament on these texts. As my predecessor noted in his letter of 18 June 2012, the funds are due to become operational from 1st January 2014, although of course this depends on the settlement of the Multiannual Financial Framework. We want to see effective and efficient spend of the significant sums devoted to cohesion policy across the EU. That means proper preparation and planning, with robust economic assessment of needs. That takes time and that work needs to start as soon as possible if the money is to be spent wisely. Agreeing elements through partial general approaches gives Member States some confidence of the shape of the final regulation to enable them to start planning.

"He also noted the benefits of reaching partial general approaches in thematic blocks as this allows Ministers to focus on particular problems and issues within the blocks rather than being overwhelmed by having to consider everything at the same time. It means we can pocket gains without having to become involved in a large-scale trade of different objectives across different pieces of legislation.

"All the Regulations this time round will be co-decided with the European Parliament. The European Parliament has adopted its negotiation mandate in the respective committees on most of the provisions and is due to vote on the final elements on 27 November. Agreeing partial general approaches gives the Presidency of the Council of Ministers scope to enter into discussions with the European Parliament. Timely implementation of the regulations is going to require the Parliament and the Council to work closely together. The partial general approaches will facilitate this."

3.9 The Minister says that he will write separately with information on the European's Parliament's position.


3.10 The commitment to allow national parliaments an eight-week scrutiny period is enshrined in Article 4 of Protocol No. 1 to the EU Treaties on the Role of National Parliaments in the European Union which provides:

"An eight-week period shall elapse between a draft legislative act being made available to national Parliaments in the official languages of the Union and the date when it is placed on a provisional agenda for the Council for its adoption or for adoption of a position under a legislative procedure. Exceptions shall be possible in cases of urgency, the reasons for which shall be stated in the act or position of the Council. Save in urgent cases for which due reasons have been given, no agreement may be reached on a draft legislative act during those eight weeks."

3.11 The Minister cites advice from the Council Legal Service stating that,

"as a partial general approach is not considered a final agreement in Council, a decision to adopt a partial general approach within the eight-week period after the Commission has adopted a proposal does not violate the Treaty."

3.12 This advice increases our concerns about the use of partial general approaches, and is symptomatic of a disregard for parliamentary scrutiny in the Council. We note that Article 4 of Protocol No. 1 does not make reference to a final agreement, but to the "adoption of a position under a legislative procedure." The Government has repeatedly indicated that its agreement to partial general approaches is given on the basis that 'nothing is agreed until everything agreed'. In other words, there is no final Council position because the terms of a partial general approach could be re-opened and amended at any stage until political agreement on the legislative instrument as a whole has been reached. Whilst theoretically possible, we question how feasible this is likely to be in practice and would welcome some indication of the number of occasions on which partial general approaches have been re-opened.

3.13 Given the recent proliferation of partial general approaches, and the concerns we have expressed about their impact on timely and effective parliamentary scrutiny, we also ask the Minister to clarify whether final agreement in Council to each of the draft Regulations establishing the EU Structural and Cohesion Funds can be inferred from a series of partial general approaches covering all the different elements of each instrument, or whether the Council will be required to give separate political agreement at the end of the negotiating process encompassing all the partial general approaches, at which point Parliament will have the opportunity to scrutinise the final outcome.

3.14 Pending the Minister's reply, the draft Regulation remains under scrutiny.

15   See (33217) 15243/11: HC 428-xli (2010-12), chapter 1 (9 November 2011). The draft Common Provisions Regulation also applies to the EU's Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund. Back

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Prepared 2 January 2013