54 European Globalisation Adjustment
Fund
| (34951)
9994/13
COM(13) 291
| Draft Decision on the mobilisation of the European Globalisation Adjustment Fund in accordance with Point 28 of the Interinstitutional Agreement of 17 May 2006 on budgetary discipline and sound financial management (EGF/2013/000 TA 2013 — Technical assistance at the initiative of the Commission)
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| Legal base | Articles 8(2) Regulation 1927/2006 and Point 28 of the Inter-Institutional Agreement of 17 May 2006; co-decision; QMV
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| Department | HM Treasury
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| Basis of consideration | Minister's letter of 23 July 2013
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| Previous Committee Report | HC 83-viii (2013-14), chapter 8 (3 July 2013)
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| Discussion in Council | 9 July 2013
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| Committee's assessment | Politically important
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| Committee's decision | Cleared; further information to be requested in Ministerial evidence session
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Background
54.1 Regulation (EC) No. 1927/2006 established a European Globalisation
Adjustment Fund (EGF) designed to counterbalance negative impacts
of globalisation. Calls on the fund by Member States can be made
where major structural changes in world trade patterns lead to
serious economic disruption, notably a substantial increase of
imports into the EU or a rapid decline in EU market share in a
given sector or a delocalisation to third countries. The legislation
allows the Commission to propose that it should be financed from
the EGF for "technical assistance", up to a limit of
0.35%, or €1,750,000 (£1,490,000) of the annual maximum
amount of the EGF.
54.2 With this draft Decision the Commission proposed,
in May, that it use €750,000 (£640,000) from the EGF
for technical assistance.
54.3 When we considered this proposal, in July, we
recalled that the Government objected to a similar proposal for
the 2012 financial year on much the same grounds as with the present
Commission bid, but that Council dissatisfaction then resulted
in approval of a reduced sum.[205]
We said that we presumed that the Government would be continuing
to press for a similar or even better outcome this year. We looked
forward to hearing about this in due course. Meanwhile the document
remained under scrutiny.[206]
The Minister's letter
54.4 The Financial Secretary to the Treasury (Greg
Clark) writes about further developments on this issue, first
reiterating a familiar refrain, that the Government is committed
to continue to work hard to limit EU spending, reduce waste and
inefficiency and deliver the best possible deal for taxpayers.
He continues that:
- as part of this work, it closely
scrutinises EU expenditure on the basis of value for money, as
it has in this particular case; and
- whilst the Government welcomes the fact that
this year's proposal for €0.75 million (£0.64 million)
is lower than last year's for €1.12 million (£0.96
million), it believes some aspects of the Commission's proposal
continue to represent poor value for money.
54.5 The Minister then reports that:
- the Commission's application
was discussed in the Council's Budget Committee on 6 June;
- the Government maintained a
parliamentary scrutiny reserve and raised its concerns about the
value for money and duplication with last year of some items within
this proposal;
- aside from a question from the Netherlands, however,
there was broad approval for the Commission's application;
- as there was a qualified majority in support
of the proposal in the Budget Committee, it was agreed by COREPER
on 26 June and at the ECOFIN Council on 9 July; and
- the Government abstained on scrutiny grounds.
Conclusion
54.6 We note the Minister's account of how this
matter concluded and now clear the document. However, we are surprised
to learn that the Government abstained on scrutiny grounds in
the vote on this issue, rather than voting against on substantive
grounds. We would have expected a vote against given the Government's
oft repeated assertions about its efforts to improve EU budgetary
restraint and the Minister's comment in this instance about poor
value for money. We shall ask the Minister to explain this vote
when we take evidence from him on a number of other Treasury matters.
205 (33829) 8844/12: see HC 86-i (2012-13), chapter
8 (9 May 2012), HC 86-iv (2012-13), chapter 14 (14 June 2012)
and HC 86-v (2012-13), chapter 18 (20 June 2012). Back
206
See headnote. Back
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