European Scrutiny Committee - Minutes of EvidenceHC 109-II

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Oral Evidence

Taken before the European Scrutiny Committee

on Wednesday 8 May 2013

Members present:

Mr William Cash (Chair)

Mr James Clappison

Michael Connarty

Nia Griffith

Chris Heaton-Harris

Chris Kelly

Jacob Rees-Mogg

Henry Smith


Examination of Witnesses

Witnesses: Sir Jon Cunliffe CB, UK Permanent Representative to the EU, and Simon Manley CMG, Director, Europe, Foreign and Commonwealth Office.

Chair: Welcome Sir Jon and Simon Manley. You are here on the auspicious day of the Queen’s Speech. Sorry that it is a bit late in the afternoon, but we regard this sitting as a very important opportunity to ask you some extremely important and relevant questions in relation to the scrutiny process. In a nutshell, much of it goes on in Parliament, but the truth is that an enormous amount of analysis, advice and scrutiny goes on where you are, in UKRep and Coreper. Therefore, the complementarity between the two is something that we want to explore.

If there is anything that you want to say by way of an opening, that would be very helpful. If there are further questions or points you would like to ask or make as we proceed, please feel free to do so. This is the first time that I am aware of that the ambassador has been in front of the European Scrutiny Committee, and it is a unique advantage and opportunity.

Sir Jon Cunliffe: May I say a few words at the beginning about what we do and how we do it?

Chair: Michael Connarty has some questions to ask. Perhaps you can comment on that after Michael has started to see whether we have covered the territory.

Q388 Michael Connarty: In the past, the Committee has spent some excellent days with Coreper discussing the whole UKRep structure, which was very helpful to the Committee, certainly when I was present. As this is not just for our own information, but for those who might wish to look seriously at how policy and decisions come to be made in the European context, it might be useful for the record for you to explain how the House of Commons scrutiny of European documents fits into the mechanism of the Brussels legislative process, with particular reference to four areas, although you might like to elucidate on others, including the negotiations in Coreper, the Council A and B points and how you deal with them, the scrutiny reserve that we hold and the operation of the qualified majority voting system.

Sir Jon Cunliffe: Thank you very much, and thank you, Mr Chairman, for the opportunity. I had not realised that I was the first witness to appear. The way in which I look at the matter is that we are the Brussels operational arm of HMG on European business. We do not have responsibility for the Whitehall end of the scrutiny. We do not do the Explanatory Memoranda. The policy resides in the Foreign Office and the Cabinet Office, but we have a number of functions in relation to scrutiny that are essential for the system to operate.

We put the scrutiny reserves down at the beginning, so whenever a document is sent for scrutiny, we ensure that it is recorded at the Brussels end that Parliament has not expressed an opinion on it and that there is a scrutiny reserve. At the end of the process, we are the ones who lift scrutiny reserves, because the Government’s agreement will always go through either a Council or as an A point, which I will explain in a moment. We are a safety net that ensures that we do not agree to things by accident, with scrutiny not having been completed. Therefore there is an operational role.

However, there is much more than that. For the system to work well and smoothly-we deal with a wide range of dossiers, files, that are subject to different procedures and time scales-it has to be more than just automatic rules and procedures, although they are the kind of underlying part of the system. It depends on the case officer in UKRep and the case officer in Whitehall dealing with that having a close relationship and being aware of where issues are through the scrutiny process and what that process demands.

From the UKRep end, we provide two things in the system. The first is advice on the speed and nature of the negotiation. That can often be difficult to predict-things go quickly, then slowly, and suddenly for all sorts of reasons they wake up and it is imperative that they move quickly again. We do not control that timetable; the Presidency controls it. Other Member States have views and the European Parliament controls its timetable, which interacts with other things. Therefore we have to be on the ball and know where it is going and when, so that if scrutiny has not been completed, if the Committee has held something over, we can talk to the Department in London, which can talk to the Clerks of this Committee and a way of handling that can be dealt with. Sometimes it can get quite rushed and last-minute, because frequently we get bounced by things we were not expecting, but it depends a lot on case officers in Brussels and in London talking and being aware of it.

Secondly, we can provide advice on where we think the negotiation is going. That is more difficult, but you can see where amendments might be coming from. To give a hypothetical example, if scrutiny has been cleared, but you have asked to be kept informed, or scrutiny has not been cleared and the Committee has asked some questions about particular things, we can see that amendments are developing in those areas that would change the nature of the original proposal deposited for scrutiny. We can then give advance warning of that. There has to be a close relationship between the two parts.

We are at the intersection of three processes on European business. First is the departmental and Cabinet policy clearance process. That is important, because we do not do anything in Brussels that we are not instructed to do from London when it comes to taking that forward. The second is the scrutiny process, which is Parliament’s process. The third is the European process, or processes, because different things are done in different ways. We have to ensure that those three processes move forward in a synchronised way and slow down or catch up with each other to make the whole thing work. To make that happen you need on-the-ball people talking to each other and to the Committee.

Things come to Coreper. At the end of my Coreper brief everything has the scrutiny position. Something may well emerge in Coreper. At that point, the person sitting next to me, normally the desk officer for the file, has to say where it is moving in the report back to London. There has to be a discussion about, "Do we need to go back to Ministers?"-that is a departmental decision-and, "Where does it fit within the Cabinet Office clearance and the scrutiny process?" In Coreper it is quite normal to say, "We have not cleared scrutiny on this," and the Presidency has to take that into account, or, often, "We would prefer that this is slowed down." We do not always get what we want, but I put down about 70 to 80 scrutiny reserves a year on business coming through, where we say, "We have a scrutiny reserve. We cannot do it." Other delegations do the same-some more than others. I think we, the Scandinavians, and perhaps the Germans, are the most active in scrutiny reserves. But it is quite normal and it is an expected part of the process.

Occasionally, in Coreper it will cause a problem, because there is an international meeting for which an association agreement is needed, a mission needs to be renewed or rolled over, or we have to hit a timetable with the European Parliament. So sometimes people say, "Well, can’t you move it? Can you do something?" etc., but the most we will do is say, "We’ll take that back to London and deal with it." I think there is a recognition that parliamentary scrutiny matters. I do not get people saying, "Oh, surely you do not need to do that." It just does not happen. When you put down a reserve, it may well irritate some people because they want to move faster, but it is understood and it is accepted.

On A and B points, I should talk about large Roman one points, or "I" points, as they are known. If something looks as if it has agreement in a working group-below my level in Coreper-and it looks to the Presidency, if it is a qualified majority file as most of the legislative files are, as if they have a qualified majority, at that point, effectively, they can take a vote in the Committee and decide there is a qualified majority. They will normally conclude there is agreement between Member States, and this does not need to go to a Council. The agreement exists, etc. That will then be proposed on the Coreper agenda as an I point-it is our version of an A point-which says, "This proposal has been agreed and can go forward." If it goes through Coreper as an I point, it will then go to a Council as an A point. It can go to any Council. The Council is indivisible, so an economic issue-the budget-can go to the Health Council or Education Council, etc., and Ministers there will not discuss it; it will just go through.

For us, this is part of the safety net. My Coreper assistant gets the list of I points before Coreper-these are managed by the Coreper assistants and are called Anticis, in the system, after the Italian diplomat who invented the process. We have one officer in my office in Brussels who is full time, I points and A points. That is all she does. When we get the list, she will go back to London-she is sent back to London-to the desk officer in UKRep, asking for an I and A point form to be filled in. That form has a number of things on it, but it has two essential questions. One is, do we have policy clearance to agree this-has the Department cleared that they are agreeing this, whatever it is?-and, two, has it cleared scrutiny? We will not accept the I point on the Coreper agenda without written confirmation of those two points. It has to be in writing. We have to have that written form back, because once we have said yes, it is agreed and then you are at the end of the legislative process-there is nothing you can do.

Q389 Mr Cash: You may or may not be aware of this rather interesting research done by VoteWatch Europe, which published an analysis of this in its annual report of 2012. It showed that between 2009 and 2012, of the 309 proposals put to the vote using QMV, 65% were adopted unanimously and 35% saw one or more Member States abstaining or opposing. When it looked at the different Member States, it concluded that the Member State which voted against the majority most often was the United Kingdom; before we start congratulating ourselves on that, if it is a matter of congratulation, approximately 90% did go through.

So there are only relatively few occasions when the policy clearance was withheld, as it were-unless you correct me-the net result being that there is, I suppose, from our point of view, a question mark, which is this. The policy clearance comes from the Cabinet Office, or whatever is the co-ordinating body that comes to you. But if you have reported to it in advance that we would not get it through on a qualified majority vote, can you answer me this question? Are you, at that point, going to refer back to it to say, "We’re dead in the water on this vote, so for practical purposes we might as well get policy clearance from you because we are not going to win this"? Some might call it a stitch-up; others might call it a prudent withdrawal.

Can you have a look at that with us, because it is very interesting? We put down a scrutiny reserve because we think it is of legal or political importance. Through the machinery, there comes a point when it is either a policy clearance, or it is not. How do you find in practice, given the figures that I have got here, that we arrive at 90% going through?

Sir Jon Cunliffe: If I can correct one thing, and then go through the process. The discussion on policy clearance and non-policy clearance is not with the Cabinet Office; it is with the Department that owns the dossier. All of the big proposals have a round of Cabinet correspondence before they start, in which the Government’s mandate is set. All Departments are under the chairmanship of the Foreign Secretary. It is another process that runs alongside the scrutiny process.

The Government’s mandate is set, and if things change the Minister will write back to the Cabinet Committee. So unless there is a trade-off between Departments-that can often happen in areas such as energy and climate, for example; with the Treasury you have three or four Departments determining the line, and it would go back to the Cabinet Office for clearance of the line-normally it is the Department concerned.

In the 16 months I have been in the job, I have not had anything like that happen unexpectedly at I point level. All of these proposals go through working groups. Some of the working groups go on for a very long time. Some of the legislation is 2,000 pages long. Some of the working groups deal with the renewal of a mission, or whatever, and it is quite a short proposal. But I will know what is happening on the dossier and where we are.

Coreper is split in two. I head Coreper II, which deals with foreign policy, justice and home affairs; economic, institutional and single market matters go through my deputy, Shan Morgan, in Coreper I. One of us will know where the file is. The desk officer will come to us some time before and say, "Look, we haven’t got a blocking minority any more. Some of our friends have peeled off, and we have to choose what to do." That can happen during the trilogue process as well, but I would know about it long before it came to Coreper as an I point.

At that point, there is a decision to be made by the policy department. There is a value placed on consensus in Brussels, and you do not say, "I might as well give in," but, "Alright, we will go along with this, but we require the following changes." In order to have consensus, people will say, "Okay. Let’s do it in that way." Sometimes you cannot do that, and sometimes one wants to vote against or abstain because the position is very clear.

I am not sure about the 90% figure-whether it is a good or a bad thing. But in all those cases, a decision will have been made where to vote. And on any file of any significance, that will have gone through ministerial clearance in the Department. By the time it gets to me as an I point, I either let it through because we have written confirmation, or-this does happen occasionally-there has been a mistake in the process. A lot of these things go through.

Sometimes I think there is the odd bounce. Something turns up, and the I point co-ordinator says, "This has not cleared scrutiny", "This has not got policy clearance" or "This has not even been agreed with the working group", and then we say, off the agenda, that there has to be a substantive discussion. I am sorry, that is a long answer to your question.

Chair: Thank you very much for that.

Q390 Michael Connarty: That was a very useful explanation. I have two points on the process. When it gets to an I point, is there often a change between the I point and it coming up as an A brief or decision at the Council, or are all the negotiations really done before it becomes an I point?

Sir Jon Cunliffe: Pretty much. It is very rare for an I point to change between Coreper and the Council, and the idea of it being an I point to Coreper is precisely so that we can check that this is the thing that has been agreed in the working group, and that everyone is happy to agree it. You sometimes get linguistic changes, and occasionally on some of the fast-moving things-in foreign policy it happens a lot-a reference to a meeting that had not taken place will be inserted afterwards, but it is non-controversial.

Q391 Michael Connarty: My second point is: at the point when you get ministerial indication that an agreement will be accepted, does Coreper get to know what we think of the Minister’s proposal? On something that would normally come back to us with the recommendation that political agreement had been reached and, therefore, would we lift the scrutiny or not, I know the Minister eventually has to take that decision. However, do you get an indication of whether the Minister makes a decision to do it against our wishes-despite our wishes-or do you just get the Minister’s view?

Sir Jon Cunliffe: Are we talking about a scrutiny override? A scrutiny override is a pretty big thing, so first of all we have to know, coming up to it, that there is a possibility of a scrutiny override. If we are on the ball, we should be talking to the Clerks and saying, "This thing is likely to come and move very quickly". Essentially, departmental officials and UKRep do not like putting Ministers in that position. To be honest, I do not think Ministers like being in that position, so it is a fairly large thing.

I think there are a couple of areas where structurally it tends to happen, around sanctions or whatever, which may be a bit different. In such cases, we say, "I will have to know in Coreper whether I say yes, and whether we lift the reserve or whatever." Or, if we put a reserve on, the Minister has to know in the Council. You cannot duck; you have to say, "We are in favour" or "We are not in favour", so the Minister will have to be consulted. A submission will then go up on the override, and of course we will know, and we will feed into that submission where we think others are and what we think the timetable is. It is a departmental submission, but much of the advice on what is happening in Brussels will come from us, because we are there and part of it. If a scrutiny override submission has gone up on my side, I will know about it.

Q392 Chair: There have been occasions when-you mentioned the word "timetable", which can be crucial in this context-we find that overrides take place that bear an uncanny resemblance to getting it through because you say, or somebody in Government says, "There is a real urgency on all this; look at our Standing Orders," and therefore it is convenient, some might argue, to get this thing through and then simply to override us. Now, we do not take very kindly to that.

What I am really driving at is whether you have any thoughts on the mechanisms that apply at the moment when you are being pressurised by other Member States to get on with something and you know that the Government are inclined to agreed to it, but at the same time you know perfectly well that we are saying that we do not like the look of it. What is the atmosphere, mindset and approach to that?

Sir Jon Cunliffe: It depends a bit on the nature of the dossier. Clearly, if it is a QMV dossier and we are going to vote against anyway, I think the override question to some extent does not exist, because we will vote against it. We are not necessarily under huge pressure because the issue will go ahead, but there will be times when there are other considerations. That might be when we are under pressure from Member States, or sometimes it can happen that we have got what we want but it is under pressure and there is a feeling that we need to close a deal quite quickly, because otherwise the deal will unravel with others if we hold it up. Or people will turn round to us and say, "Well, if you can only do this, we will give you something in return."

Then there can be operational issues-if the matter is not rolled over in time the world comes to an end and we will have a gap and so on. Those are difficult considerations. We try to make the processes line up but sometimes we don’t manage to; they are out of our control. Then a decision has to be taken. I would say, though, that I have not seen a case where anyone has said, "We will simply override scrutiny."

Overriding scrutiny is a big thing in the system. Ministers do not like doing it, if only because they have to appear before your Committee and explain why. They would prefer not to be in the position of having to choose between different things. So it is our job to try to avoid them being in that position, by early warning, ensuring that you know the pace at which things are moving, but we try to slow things down as well. It does happen; the system provides for it to happen. Then it is a decision of weighing up different factors, but it is never simple and it is not done lightly.

Q393 Mr Clappison: I appreciate, Sir Jon, the skilled way in which you have endeavoured to explain simply a process that is byzantine-plus in the opinion of those who may be listening to this.

Can I take you back to a question that the Chairman asked a few moments ago about occasions when we took a view where we wouldn’t have the support of a blocking minority and then agreed to something unanimously? You rather judiciously used the word "unexpectedly" in the course of that. Can we be absolutely clear about that? Are there occasions when, where you have obtained a policy statement from an individual Whitehall Department on the UK’s position, you none the less decide to agree to something in Europe at Coreper level, because you are aware that you don’t have a blocking minority on your side, so it appears as though it has gone through unanimously?

Sir Jon Cunliffe: Not without instructions. We operate on instructions.

Q394 Mr Clappison: Very well. Do the instructions come back to do that? I appreciate entirely your position, but is that something that would be on instructions or not?

Sir Jon Cunliffe: Let me take you through a case on this. Some things are predictable and you can feel where they are going, but sometimes you are in a strong blocking minority and then one or two of your big members disappear. You can see that happening. It can occasionally happen in real time in a trilogue. At that point, you are faced with there being a qualified majority there anyway.

You can normally see it happening a day before, but it has happened to me once or twice actually in a meeting, when we have been discussing whether we can accept Parliament’s amendments or not. The first thing you say is, "I can’t agree to that. I have to consult." You are asked how long you need; that depends on deadline. The advantage to being permanent on Committee is that we can meet as often as need be.

When we get to the end of a Presidency and the legislative timetable is getting squeezed because the Presidency wants to get things through, as many Presidencies do, and the Parliament is pushing, then we can be in session four days a week until early in the morning. You say, "I can’t agree to that. I have to consult my authorities." That happens often and we are by no means the only ones who do it. Everybody does it. A compromise is offered. You know that you haven’t got blocking power. Do you take the compromise or not? How far do you take it? The answer is that you phone the Department and then on a very fast timetable a Minister is consulted and we get a line.

Sometimes you can be surprised, but if we are doing our job the Department should know that this is the crunch meeting and they have to be able to deal with it. When we did a trilogue recently we were monitoring what was happening in the trilogue throughout the late evening, up until about one or two in the morning when it finished, and Ministers were consulted in that timetable. We will not-I will not, my deputy will not and nobody at the working group will-say, "I can see that we are now isolated and we have to say yes," without that instruction from London.

Q395 Mr Clappison: I appreciate your explanation. But is the short answer to this that it does happen that we agree to something to which a Department was initially opposed because it is clear that we do not have a blocking minority?

Sir Jon Cunliffe: It never happens that we agree to that without authorisation.

Q396 Mr Clappison: No, but with or without authorisation, it does happen.

Sir Jon Cunliffe: Do we agree to things that we would prefer not to have had in order to have a piece of legislation that we think meets our objectives? Yes. But I have to say that the European Union is de facto 27, soon to be 28, Member States trying to reach a compromise on particular pieces of legislation-proposals-and it is very rare that we get everything that we want. But there are judgments to be made about what we can live with and what we cannot live with, and what we can support and cannot support. Those have to be made as the process goes along, and they are made.

Q397 Mr Clappison: How often does it happen that we agree to something that we did not initially agree with because we cannot get a minority to block it? Does that happen only occasionally or quite often?

Sir Jon Cunliffe: Let me take an example of a large file-the file on market infrastructure. It has 600 or 700 clauses and is 2,000 pages long. There are things in there that we would not have chosen. There are things in there that we would not have chosen that we have decided we can accept; we initially opposed them being there, but in the end we accepted that something could be there. Very often, there is a compromise, but we looked at it as an overall instrument and said, "This is something that has enough of what we want and has a shape that we can accept."

So there are many individual elements of legislation that we would not have put in but when we look at the overall proposal, the judgment is that the overall compromise-I am afraid it is virtually always a compromise because that is the nature of the European Union-is one we can accept, except in the cases where Ministers say "No, vote against" and we vote against.

Q398 Chair: Sir Jon, there are occasions when it is not convenient or desirable in the national interest. When the original 1972 Act went through, it was based on a White Paper, which quite clearly stated that we had to retain the veto in our national interest otherwise it would not be in our national interests. It went on to say that to do otherwise would endanger the very fabric of the European Community itself.

The question is therefore very simple: given the current circumstances, the uncertainties, the contradictions and the cross-currents in the European Union, do you believe that there is a case for having a veto now as compared with arriving at the point that you just described-where the notion of compromise lies at the heart of the European Union? It certainly did not back when the 1972 Act went through.

Sir Jon Cunliffe: The question of what the policy should be on the European Union and whether it is right to have qualified majority voting is, if I may say so, a question for Ministers. It is obviously a really important issue and a question for Government policy. It is an issue that I read about a lot in the newspapers.

My job is to work within the system that exists, which is qualified majority for most but not all of the legislative proposals I deal with, and then unanimity for the CFSP, CSDP and foreign policy; on JHA it is qualified majority but we have an opt-out. So I am dealing with a range of different universes but within each of those systems our job in UKRep is to get the best deal for the UK and to come out with something that the UK thinks is a good piece of legislation and does not have things in it that we cannot accept, although it is a compromise.

Q399 Chair: If I could just add to that: David Lidington has written to us and said that if matters arose out of our discussions with you, which were matters of broader policy-I am sure you know this-he will come and explain that. We as a Committee will perhaps want to take up that opportunity.

Chris Heaton-Harris, I think you have the next question, unless you want to ask another one, Michael?

Michael Connarty: That was an excellent and full response to the question. Thank you very much.

Q400 Chris Heaton-Harris: I have a couple of questions. The first directly follows on from Mr Clappison’s question and the comments you made on trilogue negotiations. When trilogue negotiations are happening, we get these new versions of documents, which tend to carry the limité classification, which essentially means we cannot see them. How can we better scrutinise what is going on in a trilogue and how we can change the process so that we can have a better say in what goes on?

Sir Jon Cunliffe: I thought-we can check it and write to the Committee-we had an agreement that we can share limité documents with the Committee confidentially. I thought we were able to do that. If the Committee cannot see those documents, that clearly stops you from operating transparently in your normal way. I am not suggesting that that is an answer to the question, but in terms of the Committee and what is going on in this process, I thought we could do that. Maybe we can take that away. I need to check it.

Q401 Chair: Could I give an example? Not many urgent questions have been granted by way of emergency application to the Minister. It was not in your time-I think it was probably a bit before you took over-but there was a situation where I was supplied at a COSAC meeting with a limité document of immense importance on the question of economic governance. It was quite clear that the Government did not want us to see it. It was equally clear that it was limité so that nobody would see it, and that included all the other national Parliaments. Because I had the document, I was able to take action.

I am interested to know whether you feel, in light of what Chris Heaton-Harris said, that the whole limité thing is a good idea. It seems to me that it is just an attempt to keep really important stuff back and thereby deprive the national Parliaments of an opportunity to know what is going on at the time they ought to know.

Sir Jon Cunliffe: There are instances where it is right and necessary for the European process to have confidentiality and confidential documents. I could not comment on the whole range of limité documents. For us, I think it is important that we share those with the Committee.

To round it out, the other way that we can keep the Committee informed in a negotiation around trilogues-sometimes they move quickly and sometimes they move slowly-is for Ministers to write before we go into the trilogue process about what they think will happen and to write when amendments come from the European Parliament that we have to respond to. Through that, the Committee would have an idea of what is happening in the flow of the negotiation. There will be times where it will move so quickly, because a Presidency and the Parliament will schedule three trilogues a week and the text will be going backwards and forwards, that it may not be possible to do that. We should aim to ensure that the Committee is updated on what we think will happen in the trilogue process.

Q402 Chair: You will understand that if I, as Chairman, am given a letter that says, "This is a letter that contains essential information about the Government of the United Kingdom through the European Communities Act 1972", but am also told that it is so fundamentally secret that it should not be made available to the Committee or Parliament as a whole, that is something that I deeply resent.

If it is going to happen on a short timetable and I am having pressure exerted on me, the legal advisers can get involved in that, because the question is whether we would be breaching some convention or quasi-rule of law or something like that by releasing this information. I feel that my first duty is to Parliament, not to the processes indulged in by the European system and the establishment over in Brussels. Do you understand that it can become quite serious?

Sir Jon Cunliffe: I understand the problem. We have to work within the limité system. The operation of the scrutiny system is for Parliament, not the Government, to determine. Within that-the policy on confidential documents and how the Committee can use them is one for the Minister-we can do what we can to ensure that the Committee is as informed as possible on fast-moving negotiations. We will try to find ways to share information.

Chair: I may be grateful for the indulgence of being given the opportunity to look at something, but if I deem it not to be in the national interest from the United Kingdom Parliament’s point of view, I hope that you would understand that there will be occasions when I may decide that, irrespective of what the system may provide, my and the Committee’s first duty is to Parliament and not to a limité process that some of us do not much like.

Q403 Chris Heaton-Harris: In a former life as a Member of the European Parliament, I was involved in trilogues, and, invariably, when they speed up it is because a deal that might otherwise take six months can be done rather more quickly for some reason. I always used to vote against First Reading agreements in the European Parliament because I thought that they were a disaster. Quick law is bad law. I was never really involved in a trilogue that went from a slow to a fast pace, but I fear that the same happens because there is the chance of a deal. Lots of i’s are not dotted and t’s are not crossed and some fundamental politics may be missed out.

With something like the REACH directive or something else big and meaty, such as the file that you mentioned in answer to Mr Clappison, where the general thrust of the file may be in the right direction for the United Kingdom, there may be lots of little nasty elements that could have done with being ironed out.

Sir Jon Cunliffe: It is interesting that the Parliament at President level has tried to constrain the First Reading process-although not for that reason, but rather that there is a feeling that the Parliament as a whole is unaware of what is happening in committees and that committee chairs and rapporteurs in the European Parliament are given too much power. There has been a move back and some brakes and constraints have been put on the process over the past year.

It is certainly true, however, that the process on complicated files can move quickly. We try to ensure that there are technical trilogues that can go on after the political agreement is reached, where i’s and t’s can be dotted and crossed, but there will be occasions when big political issues are sorted out quite quickly and at the end of the process. Generally, we will try to exert a brake on the Presidency and on MEPs until the issues have been resolved, but that process is not one that the UK can determine.

Q404 Chair: Finally on this point, will you agree that, under our Standing Orders and our general duties to this Parliament, I, on behalf of the Committee, would regard the imposition of the word "limité" as not binding on our national Parliament?

Sir Jon Cunliffe: I think it is for Parliament to decide what it is bound by. That is not for the Civil Service.

Q405 Chair: So you say the buck stops with me.

Sir Jon Cunliffe: I think Parliament is sovereign-if I can put it that way. We are Civil Servants.

Q406 Chris Heaton-Harris: This is a very good time for me to come in with a question that was not on our sheet of questions to ask. Although you are an ambassador and of that ranking, you are the one ambassador we have-I guess you could say the UN ambassador might be in a similar situation-who makes a number of important decisions or advises very strongly on a number of important decisions taken by Ministers. Do you think there should be some pre-appointment scrutiny by Parliament of candidates for your role in the future?

Sir Jon Cunliffe: First of all, I think a number of my ambassador colleagues would believe they also had important roles in that sense. I have to say that that is a policy question. It is a question for Parliament and for the Government. I work within the system that we have and I am sure Ministers would be happy to answer on that.

Q407 Chair: A good and faithful servant.

Sir Jon Cunliffe: The constitutional position is that policy is for Ministers. My job, as a Civil Servant, is to deliver policy to the best of my ability. In the end, that is the system that we operate under at present.

Q408 Henry Smith: Notwithstanding that, do you feel that there are any documents that are unsuitable for pre-adoption scrutiny-I am thinking of documents such as action plans and sanctions, for example-and if so, what is the best way to overcome that problem?

Sir Jon Cunliffe: There can be such occasions, and sanctions are a good example. First, one does not want to let the country or regime that the sanctions may be used against know what we are doing and where we are. Secondly, sanctions will often involve putting limits on and constraining financial assets, which can move very quickly, or trade, or, as in the Iran sanctions, insurance contracts and the like; there, one has to decide and then move publicly very quickly-you can’t have a gap in that sense, and that causes an operational difficulty.

There can be negotiations with third countries, where again you need to keep the negotiating hand confidential. Those issues exist. I noticed, when looking at the overrides, that a large number of them were in that kind of sanctions area. We have not found a good way to square the need for scrutiny with the operational need, where if it gets out that we are thinking about sanctioning an individual the money will be gone and in the wrong place the next day. I do not have an answer to that. I recognise the problem, but I do not have an answer. Again-and we can come back to this in my answer on limité documents-we are able to share things with the Committee but then there has to be some form of confidential process. I accept the problem, but I do not have a good answer to it.

Q409 Michael Connarty: I have noticed over the years that sometimes we are told that certain things have to be done quickly, but then if you look, often a year or more later the policy taken has not been implemented in that time frame.

Sanctioning individuals is not easy. I certainly have a recollection of things that we were told had to be done, and then the decision was taken, but when we looked at a report later on-I am thinking particularly in the area to do with the relationship with Governments-the actions proposed had not been pursued or had been pursued in such a way that you got the feeling that a decision was not necessarily crucial in time terms; it was more as if someone had been up to a bit of gamesmanship, and then it did not get implemented. That may be the EU administrative problem, and the formal decision had been something people saw as being necessary.

It is not always justified when arguments are made that we have to take a decision very quickly. We are often asked, under our Standing Orders, to accept that a decision will be made despite the fact that we do not think that scrutiny should be lifted. Are you aware of issues in your 16 months where decisions were taken on the basis that things had to be done quickly?

Sir Jon Cunliffe: I have not come across such a case. I do not doubt that there are such cases, although I hope that there are as few as possible. I would say that before we accept a timetable that puts us in a decision of a scrutiny override or putting pressure on the Committee, we will push back and say, "Do you need to do this now?" In some cases of emergency action, if there is strong resistance you try to get a number of other Member States, because we are not the only Member State that has parliamentary scrutiny; every Member State has parliamentary scrutiny, and sometimes there will be a number of Member States that will push back on that.

From your description of the cases, it may well be that there is urgency to sign an agreement with a third country, so the EU-Brazil summit is going to happen, there is a particular agreement or an association agreement-it is deliverable, in the terminology for that summit meeting-and there is pressure to get it signed, but the pressure is all about the signature and not about the implementation. I am guessing.

This issue is more pronounced in the foreign policy area than it is in the legislative process, and there are a number of reasons for that. One reason is that the legislative process is well bedded down. Everyone in Brussels understands it, and the Commission understands it. They may want to move more quickly, but people understand parliamentary scrutiny and reserves.

On the foreign policy side, we are dealing with the External Action Service. It is a relatively new institution, which is populated by people who were originally in the Commission, the Council or national diplomatic services, who will have been dealing with issues that did not have scrutiny and did not have this process. It is a post-Lisbon set of issues, and they are not used to operating in that way. It is unanimity, so if we do not lift our reserve, that is it; it cannot go ahead. That can put more pressure on. Then it has these timetables like meetings and so on, and things like sanctions.

I think, in that area, some of this is about bedding down. Scrutiny is new, and the area is new to the European Union post-Lisbon in this current form. The Minister for Europe has written to Baroness Ashton three times now making this point. I have made this point with her and her cabinet, and people do so regularly. We sense that it is getting a little bit better, but I do not have scientific evidence to prove that. I think that a kind of bedding-down and working-through process has to happen, but I accept that sometimes there is pressure to do something we do not follow up.

Q410 Chair: On the question, for example, of Mali, you may recall-it is not that long ago-that very considerable pressure was being exerted. I am not complaining; I am simply saying that there were communications that France, in particular, wanted to get this through. I had a lot of discussions about the process and I made it absolutely clear that whatever the perceived urgency might be, the reality was that if we regarded it as being a matter of importance legally or politically, we would recommend a debate, and that is exactly what happened in practice.

You will appreciate that, of course, had a green light been given at an earlier stage and had Mali gone wrong, the consequences would have been quite serious. For practical purposes, I am sure you appreciate that we do welcome views that may be expressed, but at the same time it is absolutely essential to say that whatever the scrutiny processes may be for other Member States-they may have them-the question is whether they are as refined and as focused as ours are. Do you have any thoughts on that?

Sir Jon Cunliffe: We fully accept and understand that there are occasions when that happens and when, to go back to my earlier point, the processes just cannot be lined up. As to other Member States, I do not have scientific evidence for this, so it is an opinion, just observing what happens around the Coreper table. I think we probably have the most developed and comprehensive document scrutiny system in the European Union. We are on live broadcast, so I will now get letters from my colleagues; but I am pretty sure, from talking to my colleagues. Our process is very comprehensive and a lot of things go for scrutiny that don’t go for scrutiny in other areas. It also operates through the period, whereas others clear scrutiny quite early, and then it is done. However, there are other countries for which it is equally important. On the mandate side there are the Scandinavian countries. It operates in a different way, but they are frequently putting down scrutiny reserves. In Germany, as well, you see that an awful lot. The Netherlands would be another one. So we are not the only one, but I think our document scrutiny is probably as comprehensive and as detailed as any of the others. That would be my guess, but I have not carried out a study.

Q411 Chair: One last question on trilogues: you say the UK cannot influence the speed of trilogues, but can you describe how the UK tries to influence the contents and speed of the trilogue negotiations, and where you can see any room for improvement?

Sir Jon Cunliffe: We can influence the speed of trilogues, and one does that by building coalitions with others and by brute political force, because in the end the system is set to try and deliver a compromise that everyone can live with. It doesn’t always achieve that, and if you say "This is a real problem for us," a Presidency will listen. Some Presidencies listen more than others, but there are a number of things we can do, and I can think of examples over my time where we have slowed down the start of the trilogue process, because we were not happy that we actually completed it in the Council, or we have asked for more time for consideration of amendments and so on. So I think Member States can affect the timetable, but we can’t in the end determine it. It is for the Presidency and the Parliament to do, but we can have quite an impact, depending on the issue and the alliance that we make. On your questions about whether we can determine the policy and what happens within the trilogue-

Q412 Chair: I think I am really more interested in whether or not you can see any room for improvement.

Sir Jon Cunliffe: Within the scrutiny process or the trilogue process?

Chair: The contents and speed of the trilogue.

Sir Jon Cunliffe: It is very dependent on the actual Presidency. I know it sounds a strange answer, but I think good Presidencies do it in a kind of organised way and bring the Council along. Other Presidencies find it more difficult, and then the process becomes a much more difficult one for the Council to manage. My first point is, if you see changes in performance over the years it is often to do with the nature of the Presidency.

On the trilogue process itself, my sense is it is evolving. The European Parliament got new powers in the Lisbon Treaty. There has been a sense that it is flexing its muscles. On whether there is, in the end, an alternative, it is a co-decision process in which the Parliament and the Council are equal legislative partners-I think that is the phrase. So in the end, there has to be a process of negotiation between the Parliament and the Council, the two legislative partners, to determine the final shape of the legislation. While sometimes I think we and the Parliament could do that in a more organised way-I hope that as the Parliament and the Council develop it will become better- I don’t think we can avoid the actual process, because that is the essence of the co-decision process.

Q413 Chair: Just to wrap that one up, would you agree that, as far as the UK national Parliament is concerned, we would repudiate the notion, as set out in the Barroso blueprint, that the European Parliament, and only it, is the Parliament for the European Union?

Sir Jon Cunliffe: I won’t take responsibility for the European Commission President on that. I understand the point, and as I said at the beginning, Parliament is sovereign. To capture the discussion that has happened around Parliaments and accountability, there is quite a strong sense in Brussels now about the involvement of national Parliaments and the need to involve them on a range of issues, particularly around the euro for those countries that are in the euro. I had not thought Barroso was saying that all these issues have to be determined by the European Parliament and only the European Parliament. I thought that there was a recognition that the involvement of national Parliaments in the work of the EU needs to be increased.

Chair: I think it is more a question of "grandmother’s footsteps", but I am going to pass on to Jacob Rees-Mogg at this point.

Q414 Jacob Rees-Mogg: We are moving on to scrutiny in practice. Do you have any specific suggestions on how the House of Commons scrutiny process could be improved, which might contribute to our inquiry, both from what you are currently doing and from your previous role? Could you also discuss what you think scrutiny aims to achieve? Are we trying to ensure that policy is formed correctly or are we trying to change the policy as it is formed?

Sir Jon Cunliffe: It might be best to start with the last, general question and then move to the specific. My understanding is that parliamentary scrutiny has a number of functions. First of all, it is about transparency. It is about ensuring that Parliament knows the business that is going through the EU-it is becoming ever more complex with the different formats, and the volume has gone up, but it is important that that is there-and through Parliament, the public and the media. That is a key element of the scrutiny process. It is there to enable Parliament to hold the Executive to account, which is one of Parliament’s constitutional functions so that you are able to say, "What is the Government’s position on this? What has happened?" and have a debate for Parliament to examine the Executive on what it has done and why, and to do that publicly as part of the parliamentary process.

It is also there to give the UK the benefit of a view that we can take into the discussions and the negotiations. I would include in scrutiny both House of Commons and House of Lords scrutiny, because the House of Lords does more in-depth scrutiny reports that are enormously influential in Brussels and on Government thinking. The same can be true of scrutiny in the Commons.

It follows from that-as I said, the scrutiny process is for Parliament to determine, not for the Government and certainly not for me-that there could be more scrutiny upstream. We have the Commission’s work programme, and it is a pretty difficult document to wrestle with. Much of it is aspiration rather than concrete plan and you never quite know what, but we have that document, which suggests areas of action where the Commission intends to bring forward proposals. We write at the start of every Presidency saying what we think that Presidency’s priorities are, what is going to move and where they will put their effort and invest their capital.

Again, views from the Committee about things that matter, things that the Committee will be looking at very closely, or even areas where the Committee thinks the Government should be aware of the following issues or suggestions, are valuable. The earlier we do that, the more we can influence. As everyone knows, much of Europe is about influencing early on in the process rather than at the trilogue stage.

In some policy areas, expertise from departmental Select Committees could be brought to bear. I know that this Committee can ask for a Select Committee’s opinion, and I know that you are doing so more often. I have also read the evidence of the Chair of the Liaison Committee when he appeared here, and he made some suggestions about how departmental Select Committees can become involved not so much in specific decisions about pieces of legislation-although they might want to-but in policy and the way it is going. In many areas of European Union business, the policy that has been developed in the EU is of a piece with what is happening in UK domestic policy.

Finally, I do not know whether it is possible to streamline, given the extent to which there are things on which we should perhaps be giving more information and matters on which we could be giving less. Some of this has been done-I think there has been some agreement on VAT derogations for other Member States, although I think the Committee has decided that that is not something that necessarily has political interest for the UK. There might be other areas in which we are investing resources in one part of the scrutiny process that could be better invested elsewhere.

Q415 Jacob Rees-Mogg: I wonder whether Your Excellency thinks that good scrutiny can be helpful to you in negotiating for the UK and UKRep. Can you get a better result in your negotiations by saying, "This won’t work in the UK politically, because the House of Commons has said this", or "This is something we should be pushing for, because it is being demanded"? Does that strengthen your hand to any extent? If there is good and early scrutiny, is that more useful to our position in Europe?

Sir Jon Cunliffe: I and my colleagues around the Coreper table are very aware of the domestic parliamentary and political milieu in which we operate. If I say in a Coreper discussion that we have a strong parliamentary view on something, that is listened to because people think it will affect the Government, which it will.

If there is a parliamentary view on something, does it carry weight? It does not determine the outcome. I cannot say, "Because of this, we cannot go ahead", but, yes, it does carry weight. Furthermore, views that come into the policy formulation process can carry weight in how we form the British position. But the earlier the better, because in the end, the inertia and momentum in the Brussels process is such that our chance of shaping and determining is much higher if we are engaged upstream in the process.

Q416 Michael Connarty: I have heard so often the comment about the wonderful work done by the Lords, which obviously substitutes European sub-committees for our Select Committees in influencing the Government. However, in terms of your work, I cannot really see how it fits in with Coreper. It might fit in with the Ministers’ brief, what goes in the Departments and what the perspective is, but are you telling us that you basically read the documents from the Lords and give advice to Ministers based on them?

Sir Jon Cunliffe: No. We do read the documents, but Coreper discussions in the main deal with things at quite short range as they move through the machine to the next stage. Detailed Lords reports are not much a part of the discourse. But a lot of my job is influencing upstream. That does not happen in Coreper, which is now very large. There will be 28 of us around the table-Croatia will soon be the 28th member-plus the Commission and so on. If we have a table-round of what we think, that is an hour and a half, so there is no chance to have such a discussion. We try to have more thematic policy discussions, but the Coreper process is really about the business moving through the machine.

Part of my job is to be engaged with the Commission before we ever get to that process and to be engaged with the European Parliament, because it can commission own-initiative reports and then influence what the Commission does. Generally speaking, the House of Lords detailed reports, which serve a rather different function to House of Commons scrutiny, carry weight in Brussels, and they are often some of the clearest analysis of an issue that people in Brussels have, so they have a high reputation. Also, we have reports from the Commons or visits by Select Committees. I try to encourage Select Committees to come to Brussels and engage, because in their discussions with people in the Commission and in the Parliament, they will have an influence in a way that I cannot. They carry a weight that is different from the permanent representative’s. So I think there is a lot that Parliament can do.

My understanding of parliamentary scrutiny is that there are different systems. Commons scrutiny is designed to be comprehensive and ensure that everything is looked at and that important things are scrutinised, and to look at how things are moving through particularly the legislative process, whereas the Lords take a different view of their role and tend to be doing narrower, deeper scrutiny. I think the complementarity is quite helpful. It can be influential in the kind of wider influencing that I do.

Simon Manley: May I add an example? The recent Lords report on enlargement is a classic case. Given our nation’s historical support for enlargement, and also the very active role both this Committee and the Lords Committees have played in the enlargement process, the views of the Lords on that particular issue have currency within the Commission, within the Parliament and among other Member States, and have therefore been influential in people’s thinking on how we take forward enlargement over the next few years.

Q417 Nia Griffith: May I come back to the Select Committees, Sir Jon? Obviously, we are aware of the problem and difficulty that very often, because of other priorities, they do not get to know about things and look at European issues sufficiently early to be able to influence Government or indeed the Commission. Although they enjoy it and learn a lot when they come out to see you, as the Welsh Affairs Committee did last year-your staff were extremely helpful and gave a lot of time to the Committee-there does not seem to be a mechanism by which, for example, your staff could perhaps come here and talk to the Committee, perhaps in a broad-brush way. Do you think that that would be useful? If so, how would you see that operating? Who would instigate that? Would you see things that you thought were worthy of bringing to the attention of the Committee, or would you expect some role here to indicate it to you?

Sir Jon Cunliffe: Select Committee visits to Brussels are enormously useful. I know it is an investment of time, but in some ways there is no substitute for being out there and talking to a range of people. You get a feel that you would not get from a briefing from us. But obviously there is a limit to what can be done. The parliamentary office in Brussels, with which we have quite strong links, has a role to play in signalling or pointing Select Committees to things that they might want to look at. We are very happy to assist Select Committees in informal briefings, but there is a caveat: the policy on these issues is not owned by UKRep. We are the Brussels office of a number of Government Departments, so it is for those Departments as well, and they have European branches and European divisions.

Q418 Nia Griffith: Given that the Select Committees don’t do that, is there a role for this Committee to point out to those Select Committees that they ought to be doing something? Do you think that that should-

Sir Jon Cunliffe: Sorry-

Nia Griffith: No, no, you have answered my first question, which was whether you thought it was your role, and you are saying no, it is not your role. But the question then is whose role is it to alert those Select Committees and to perhaps bring your expertise to them? That is the question. How does it actually engage in the first place?

Sir Jon Cunliffe: This Committee does have a role. My understanding is that it has a mechanism for alerting and targeting. I did not want to suggest that we do not have a role; I just wanted to suggest that if Government have a role, we are the front end of Whitehall Departments.

Q419 Nia Griffith: So you are suggesting that we could recommend that a Select Committee invites somebody over to look at things?

Sir Jon Cunliffe: Yes, or that they ask for departmental officials and UKRep to come and brief them on various issues.

Q420 Mr Clappison: Further to Mr Rees-Mogg’s question to you, do you feel able to express an opinion as to how parliamentary scrutiny of the final stages of the legislative process could be improved?

Sir Jon Cunliffe: In the final stages, it depends on the nature of the instrument and the process. In the ordinary legislative process, which is qualified majority co-decision-that is the bulk of legislation-the final process is around the general approach of the Council, the trilogues and then the first reading deal, because we are still, at the moment, in a world where most deals happen at first reading.

It goes back to the answers I gave earlier to Mr Heaton-Harris. We have to ensure, and Ministers and Departments have to ensure, that the Committee is kept up to date with fast-moving negotiations. That means that you need a partnership. I talked about a partnership between us, Departments and the Committee Clerks, and it is at that stage that you need it most of all. Once something has passed through negotiations with the Parliament and you are on to the formal adoption later on, effectively the policy has been set. That stage of the process is the final stage, but it is the penultimate stage where the scrutiny is most important.

Clearly, if things do not go through at first reading-if they go to second reading and conciliation-the process has got to be extended and repeated, because the stages are pretty similar. We just do it all again and then have the conciliation. I do not see a procedural way of dealing with that complicated interaction of the Council and the Parliament. I think you have to depend on people who are on the ball and who have relationships, and on information being able to flow in an easy and informal way between departmental case officers, scrutiny clerks and UKRep to ensure that we manage to line the processes up.

Q421 Michael Connarty: On one occasion in Standing Committee-in debate, so it will be on record-the Minister said that he had managed to achieve amendments in the parliamentary process in the European Parliament by contacts made with Members of the European Parliament, who argued and won amendments. That seems to me to be something that is missing now in the process. As I have always said, the power after Lisbon moved to the European Parliament and very much away from us. We do not spend enough time talking to our colleagues in the Parliament about what they could do once things come out of the Council process.

One Minister indicated that contact was made by the Government-either by Ministers or by officials of the Government-with MEPs to have things reinserted that were left out in the discussion, which I fully commend, because it gets us nearer to the position that the UK want. Is there any role for your office and the people whom you work with in this process, or was that Minister indicating a departmental contact or a political contact? Once something comes out of Council, it is not finished until the Parliament approves it.

Sir Jon Cunliffe: First of all-all Member States do this-we most certainly do work closely with British MEPs of all parties to try to ensure that we get to UK objectives. That starts long before the legislative process, because it is important which MEPs are appointed to be the rapporteurs, the scrutineers and the Chair, and it is important that we have UK MEPs engaged in the areas where British objectives are most important. We are engaged pretty constantly with our MEPs, particularly the ones working on legislation. Some of them are very well plugged into the departmental process.

The links happen in different ways. They can be direct links. I talk to MEPs about what is going through the Parliament. My desk officers in UKRep do it; they work with MEPs to ensure that we get the right amendments in and stop the wrong amendments-there is a defensive and an offensive part to it. Ministers do it when they come out, and Departments do it. The relationship between UKRep and MEPs, and departmental officials and MEPs is rather different to the relationship between Civil Servants and MPs. Here we operate through Ministers who are engaged in the process; but in the European Parliament, we do not have Ministers in the trilogue processes, so we have to act directly.

On the broader question, I have tried, since I have been there, to improve our links with the European Parliament more generally. I know there are many different, divided views about the European Parliament, what it does and what it should do, but the fact is that it has a large role as the co-legislator in the process, and we have to work with it and use it to secure the UK’s objectives. I have tried to encourage links between Westminster and key MEPs. That is another way in which Westminster can influence what happens in Brussels, so I encourage that.

Q422 Michael Connarty: I commend all of that, but I have the following question. Obviously, you are representing the Executive, the Government, and we are representing the Parliament, the legislature, but we don’t seem to have those mechanisms. Therefore, would it be a fair conclusion that we are not as effective in the post-Lisbon situation because we do not have more direct contact, parliamentarian to parliamentarian?

Sir Jon Cunliffe: I think that is right. MEPs do not work for the Executive-they are not whipped out of Westminster-and the European Parliament operates in a way that is very, very different to Westminster. MEPs decide for themselves whether they will listen to the Executive, or whether they will not. Some of them belong to political parties that reflect the parties in the Government, some of them don’t. They are quite individual and different, but they choose. However, my sense from the UK MEPs that I speak to is that many-this is a huge generalisation-want contact with Westminster. That is an avenue that bypasses the Executive completely, parliamentarian to parliamentarian. And I sense that is true not just of the UK MEPs; I think the non-UK MEPs welcome that as well. In my view, given their role in the process, the more contact they have, the better it is for the UK.

Q423 Chris Kelly: How often is this Committee’s work used by UKRep in negotiations on specific proposals in Brussels? If it is, can you elaborate with examples?

Sir Jon Cunliffe: It is used, clearly, in all the instances where we say that we haven’t cleared scrutiny. I can give examples, but, as I say, I put reserves down about 60 to 70 times a year. It is used when you ask questions of Ministers or raise important points, and then it forms ministerial policy. I can think of an example where the Committee had subsidiarity concerns-concerns about what is called competence creep-which people in Brussels are very alive to. It is used when, for example, there are dossiers which have unanimity, and people want us to gloss that. I will say, "That will not get through the UK Parliament."

I think that a lot of that influence comes from the Committee’s influence on Ministers through the questions you ask and the fact that, in many cases, proposals do not clear scrutiny, so the Minister knows that scrutiny is there. In the end, it is for the Executive to decide what it will do and to account for its decision. That is the system we operate.

There have been instances; I can think of one. We get into some detailed stuff. Marine fuels and their sulphur content were affected by a European instrument and there were very strong views in the Committee about subsidiarity and not going past a certain point, which were used in forming the discussion. I can think of a number of tax files around VAT and so on where the Committee’s position on competence and where that goes was put through.

I can also think of areas where we will dispute the legal base issues; for example, which legal base is cited in a document. That sounds arcane but will often determine the kind of voting structure and so on. There we will challenge the legal services and so on in areas where the Committee has expressed views. There are a number of ways. There is a prime way, apart from my saying it will be difficult to explain in Parliament, which people do accept. The UK Parliament’s had a bit of publicity in Brussels over the past year or so, and that has probably made it easier to explain. The prime way is through influencing the ministerial process where policy is set.

Q424 Chris Kelly: How would you assess the level of awareness in UKRep about the work of this Committee? How have reasoned opinions in particular been used by UKRep during your negotiations?

Sir Jon Cunliffe: Desk officers in UKRep are very aware of the work of this Committee. They will know where something is in terms of scrutiny. If the Committee has asked questions or expressed opinions, they will take that into account in their negotiations. They will focus. I can think of an example around special representatives, where the Committee had specific concerns that we tried to reflect in the negotiation. I can think of some of the issues around the partial general approaches being used for some of the spending instruments that are under the new MFF, the seven-year budget, where we reflected that. It comes back to the question from Mr Rees-Mogg about how we can improve it. The earlier we know what the Committee’s views are, the more they can influence.

Q425 Chris Kelly: How have our Reasoned Opinions been used during your negotiations?

Sir Jon Cunliffe: If we have the opinion, we can say what the opinion of Parliament is. If questions have been asked, we can say Parliament is interested in particular things. If scrutiny has not been cleared, or Ministers have written but there has not been an answer, frankly, we can’t use it because we don’t know what it is. The thing we can use is that we haven’t cleared scrutiny.

I will give an example around some of the Horizon 2020 financing programmes for science. It is a peculiar process because all of these instruments are part of the seven-year MFF, but they are separate legal instruments. So they are going through the European Parliament, processed with the Council on the one hand, but everybody knows they can’t be completed until the numbers and the big elements are dropped in from the MFF agreement.

I think there were a number of interchanges between BIS Ministers and the Committee, some of which had responses and some not. Where there were responses about things that the Committee was concerned about, we could take them into account. Because it was done by a series of partial general approaches, the final thing could not be done until the seven-year budget was done, but elements that did not involve those kinds of numbers could be done first. So, where we had concerns from the Committee, we were able to take them into account. In some cases, we had them. In some cases, I think the Ministers had written, but the Committee for one reason or another was not able to reply. In those cases, we clearly can’t take them into account.

Q426 Chair: Would you get involved, for example, where our Committee or our pressure in the House of Commons has drawn attention to a blatant disregard of the rule of law in Europe? I could give you an example or two. On the EFSM, it was clear to our Committee-we made a report-that Article 122 was not an appropriate vehicle or a proper basis on which to bring it in. Madame Lagarde came out of a meeting, I think on 17 December 2011, and said-I am paraphrasing-"We violated all the rules, but we had to save the euro." That was reported on The Wall Street Journal and no one has ever disputed it.

We had a similar situation where someone-I think it was you-had to write to challenge the legality of the fiscal compact. That was a warning shot, accompanied by a lot of discussion and debate in Parliament, prompted by this Committee, on the legality of going ahead with the 25 instead of the 27. A challenge was proposed, but nothing has been heard of it since. Incidentally, I would like you to give me an update on where that stands at the moment. There are other examples.

In terms of the analysis that we bring to bear on the legal base that you referred to, the question that concerns us is: what is the mechanism whereby you are able to draw attention to the other Member States-they may want to go ahead-that there is a serious legal problem, which not only is a judicial issue for the European Court of Justice, but becomes a political issue, because it shows a complete disregard for the rule of law? That issue appears to be something of a political nature. What do you think about all that?

Sir Jon Cunliffe: To take the example of the EFSM, we made it quite clear that we did not think that Article 122 was an appropriate base for that. The original EFSM was agreed under the previous Administration. The current Administration, partly because of Parliament’s work, made it an objective to secure an agreement that Article 122 would not be used again for that purpose. The Prime Minister secured that in the Council conclusions in December 2010 and in the preamble and recitals to the Council decision authorising the simplified mechanism for a treaty change in Article 136. That was to allow the euro countries to have the ESM and was not a treaty change that affected us. A lot of effort was spent getting into the legal preamble of that, that when the new ESM was up and running, the Article 122 EFSM would not be used again. A lot of the effort that went into securing those changes over three or four months was based in part on Parliament’s views on the legality and generally on the political appropriateness of that. It makes quite a difference.

Q427 Michael Connarty: We take very seriously the question of Reasoned Opinions when we think that there may be subsidiarity or proportionality breaches. Are they treated any differently from just scrutiny? Do they override scrutiny reserves? There seems to be a much more serious matter. At the moment, there seems to be a trend towards increasing competence created by the Commission.

Sir Jon Cunliffe: I think they are taken more seriously in Brussels, particularly if there are a number of them. Once you get to one third-the magic number at the moment is nine-the Commissioner has to consider-

Q428 Michael Connarty: But many do not reach that percentage. I just wonder how that feeds into the discussions you have with the other 26 Member States.

Sir Jon Cunliffe: It gives us a bit more of a powerful hand, because we can say that this is more than a scrutiny reserve; we actually have a Reasoned Opinion of the UK Parliament. Very often, we are arguing on issues of subsidiarity and how far to go in those processes. If that exists, it gives us, not a card to play, but an argument to make in the negotiations. In the end, it does not bite unless you can get to the nine. My sense is that the Commission watches quite carefully when you get more than one, to see what is happening. I think there is an interesting issue about how much coordination there is between Parliaments, because this is something where, again, it bypasses the Executive, so Parliaments can work together.

We all waited to see what would happen when the trigger was reached for the first time, and interestingly enough, the Commission just withdrew the proposal, which suggests that there is more mileage in this as well. At the initial stages, before you reach the threshold, it gives us a card we can play.

Q429 Chair: I know that you will have to leave in five minutes, so I want to come to democratic legitimacy, which basically goes back to the Prime Minister’s Bloomberg speech. He said: "My fourth principle is democratic accountability: we need to have a bigger and more significant role for national Parliaments… It is national Parliaments which are and will remain the true source of real democratic legitimacy and accountability in the EU."

You cannot get clearer than that. At the beginning, Sir Jon, you made it clear that as far as you are concerned, the assumption is that the United Kingdom Parliament is sovereign. That is the basis for our voluntary agreement to enter into the European Communities Act 1972, from which flows everything you do in your field and everything we do. But for the Act, the situation would be significantly different. Basically, the question that I would like to ask is this. What consultation has there been so far on the Rompuy EMU road map, coming to the June European Council? In the light of what you just said about the European Parliament, what implications do you feel the Bloomberg speech has had?

Finally, we did two reports on EMU before the October and December European Council. How and to what extent do you regard those reports as having an impact on the United Kingdom’s position at the two meetings? We still have an outstanding debate. We have demanded three hours on the Floor of the House regarding primacy, which arises out of all this. In a nutshell-maybe it is asking a lot in a short time-can you give us an indication of where you see the process moving in relation to the constitutional principles that lie behind it?

Sir Jon Cunliffe: My background is in economics, not constitutional law, so I may be a bit more general in my answer, if that is okay. As I said, this is a discussion which is now happening quite intensely in Brussels. The answer to where the Van Rompuy road map and the Barroso blueprint have got to in dealing with this issue is: not very far. Van Rompuy will present a progress report in May, but he will come back in June.

My sense is that this whole set of issues, which involve some fairly fundamental questions, will be very live in the European parliamentary elections and the political campaigns around those, and will be an issue for the next Parliament and the next Commission rather than this one. It does not feel to me as if the energy is there, because the European Parliament will be in campaigning mode from January onwards, and the Commission is now coming to the end of its term. In terms of a political cycle, I could be proved entirely wrong, but my assessment is that this is something for after the second half of 2014. I expect, however, that Barroso-he said he will do it-will put down his vision from the Commission for where the European Union should go at the end of his term, particularly in this area, probably in spring next year. I cannot see this moving structurally before that time.

Within that, ideas are being floated on the European Parliament side. Some of them are about the accountability of the European Central Bank, particularly when it has its new supervisory hat on. When the ECB acts as the single supervisor for eurozone countries and those non-eurozone countries that decide to join, to where is it accountable? Is it accountable to national Parliaments? If it is accountable to the European Parliament, to what committee is it accountable? Some people have asked whether it should be accountable to a committee of eurozone members only, because if you are not in the euro, should you be on the committee that holds the ECB to account?

Similar questions have been raised about the Commission’s role in economic governance-the so-called semester. For non-euro countries, that role is exhortatory and advisory-it has no legal force or sanction. For euro countries, however, the Commission’s role does have legal force and sanction. Again, the question is to where the Commission is accountable. Is it to within the European structure or to national Parliaments? Some of the changes to economic governance made over the past two years-the so-called six-pack and the two-pack-have changed the balance between the supra-national level of the euro and the euro countries. As that goes forward and we start to operate it and it sinks in, you will see pressure from national Parliaments asking where the accountability is and from the European Parliament asking what the right structure is. You will see that grow, but I think it will come forward later.

As to the UK Parliament and our role under the European Communities Act 1972, the UK made a decision, through that Act, to be in the European Union. Obviously, there are mechanisms in the treaty for that to be reversed. The decision can be reversed in that sense. If the question is about that being threatened, however, I do not see anything in the Barroso blueprint that affects that position. Most of that blueprint and all the areas around the European Parliament and accountability is really a discussion about euro countries and what happens with the euro. We are not in the euro and we are not joining the single supervisory mechanism, so to some extent much of that discussion is separate to us. That said, once the discussion is there, I think it will go broader than the euro, and the Prime Minister in his speech laid out, as did the Foreign Secretary in his Berlin speech, this view about accountability that will have to be tackled. There are issues in the UK political system and debate that will play into that. However, I see that as something that will happen in the second half of 2014 and probably not before.

Q430 Chair: The central question about the sovereignty of the UK Parliament remains on the table. The question is how they are going to reconcile that with all the machinations and manoeuvrings-political, constitutional and economic-that are going on in the framework of the European Union as a whole, with the eurozone problem thrown in. For practical purposes, I do not think that we can ask you any more this afternoon, but we are grateful to you for coming along and giving us a very interesting insight.

Sir Jon Cunliffe: I understand that the Committee is coming to Brussels at the beginning of next week.

Chair: Yes.

Sir Jon Cunliffe: I look forward to welcoming you then.

Chair: Thank you very much.

Prepared 27th November 2013