8 Undeclared work
| Committee's assessment
| Legally and politically important |
| Committee's decision | Not cleared from scrutiny; further information requested
|
| Document details | Draft Decision on establishing a European Platform to enhance cooperation in the prevention and deterrence of undeclared work
|
| Legal base | Article 153(2)(a) TFEU; co-decision; QMV
|
| Department | Business, Innovation and Skills
|
| Document number | (35967), 9008/14 + ADDs 1-2, COM(14) 221
|
Summary and Committee's conclusions
8.1 The draft Decision would establish an "EU Platform"
— a formal mechanism at EU level comprising the relevant
enforcement authorities designated by each Member State, the Commission
and various observers (including labour and industry representatives
and the International Labour Organisation) — to strengthen
cooperation in preventing and deterring undeclared work. The EU
Platform would promote the exchange of information and best practice,
develop expertise and analysis, and coordinate cross-border operational
action. The Commission considers that existing voluntary cooperation
between Member States is patchy and piecemeal. It has therefore
proposed that participation in the EU Platform should be mandatory
for all Member States.
8.2 The Government questioned whether the EU was competent to
act and whether the action proposed was consistent with the principles
of subsidiarity and proportionality. Its concerns stemmed primarily
from the Commission's proposal to require mandatory participation
in the EU Platform. The Government's Explanatory Memorandum suggested
that the draft Decision lacked "the empirical evidence base
or analysis of structural failure at Member State or Union level
which would support a case for intervention".[51]
8.3 We shared the Government's concerns. We requested a more detailed
analysis of the scope of the legal base relied on by the Commission
— Article 153(2)(a) of the Treaty on the Functioning of
the European Union (TFEU) — which provides for the adoption
of measures designed to encourage cooperation between Member States
on matters concerning EU social policy objectives. We also recommended
issuing a Reasoned Opinion, which was debated and agreed to in
the House on 9 June.[52]
No other national Parliament has issued a Reasoned Opinion.
8.4 The Government subsequently informed us that, despite the
absence of a Title V (justice and home affairs) legal base, it
considered that the draft Decision was subject to the UK's Title
V opt-in as one of the recitals mentioned the possible involvement
of the police in cross-border enforcement action. It suggested
that it had secured a significant improvement to the text of the
draft Decision through the inclusion of provisions clarifying
that participation in any activities arising from the Platform
would be voluntary. Whilst the UK would be bound to participate
in the Platform, an obligation which the Government described
as "not onerous", it would not be bound to take part
in initiatives stemming from the Platform and would only do so
if it considered that they would be in the national interest.
On 16 July, the Government notified us of its decision to opt
into the draft Decision.[53]
8.5 In our Eighth Report, agreed on 16 July 2014, we noted that
the Government appeared to have retreated on the three substantive
legal issues raised in its initial Explanatory Memorandum and
subsequent correspondence — the justification for EU action,
the legal base for EU action, and the need for a Title V (JHA)
legal base. Despite the changes made to the draft Decision during
negotiations within the Council, the principle of mandatory participation
in the EU Platform — the core of the Government's initial
objection on subsidiarity grounds — remained.
8.6 We also noted that, in light of the Government's revised opt-in
policy, it would consider the UK to be bound by the draft Decision
(which it characterises as a "partial JHA measure"),
whether or not the UK opted in. As a result, the Government appeared
to have decided to cut its losses and opt-in, even though its
opt-in, in this case, would have no legal effect and would operate
purely as a political statement of support for the draft Decision.
8.7 We asked the Minister for Employment Relations and Consumer
Affairs (Jo Swinson) to report back to us at the earliest
opportunity on the position to be taken by the UK within the Council
as and when an agreement was sought on a general approach. In
her latest letter the Minister explains that the Employment, Social
Policy, Health and Consumer Affairs (EPSCO) Council is expected
to agree a general approach on 16 October and sets out the position
the Government proposes to take.
8.8 We accept that there has been some modest improvement in
the wording of the draft Decision to make clear that the operation
of the Platform must fully respect national competences and procedures
and that participation in initiatives developed by the Platform
will be on a voluntary basis. Whilst these changes are likely
to mitigate the impact of the draft Decision for the UK, they
do not address the principle of mandatory participation in the
Platform on which the Government's original objection was founded.
We remain of the view that neither the Commission nor the Government
has produced convincing evidence to establish a need for EU intervention
or to demonstrate that EU action would be effective and add value.
8.9 The Government's evident lack of enthusiasm for the Platform
makes it all the more surprising that it has decided to opt into
the draft Decision. As far as we can tell, the Government's opt-in
decision is based on a pragmatic application of its revised opt-in
policy, according to which the draft Decision constitutes a "partial
JHA measure" which would bind the UK whether or not the Government
decided to opt in. Had the Government decided against opting in,
it would have had to face the unpalatable prospect that its opt-in
decision had no legal effect whatsoever in this case. As we noted
in our Eighth Report, agreed on 16 July 2014:
"Our original concern that the evolution of the Government's
opt-in policy risked creating legal uncertainty is now compounded
by its use, in this case, as a symbolic gesture with no legal
effects. The Minister has provided no further compelling evidence
to support the adoption of the draft Decision, let alone to exercise
an opt-in which is recognised by no other Member State and has
no impact on the legal effect of the measure."
8.10 In light of the Reasoned Opinion agreed to by the House,
questioning the justification for EU action, and the Government's
ill-advised opt-in decision which appears to be based entirely
on pragmatism rather than principle, we are unwilling to lift
our scrutiny reserve. To do so would be to endorse the Minister's
intention to vote in favour of the Council general approach. We
also wish to track any changes to the draft Decision which are
proposed during the course of trilogue discussions between the
Council, European Parliament and Commission. The draft Decision
therefore remains under scrutiny. We ask the Minister to report
back to us on the outcome of the EPSCO Council and to provide
progress reports on the trilogue negotiations.
Full details of
the documents: Draft
Decision on establishing a European Platform to enhance cooperation
in the prevention and deterrence of undeclared work: (35967),
9008/14 + ADDs 1-2, COM(14) 221.
Background and previous scrutiny
8.11 Our earlier Reports, listed at the end of this
chapter, provide a detailed overview of the draft Decision, our
reasons for recommending that the House issue a Reasoned Opinion
challenging the justification for EU action on subsidiarity grounds,
and our concerns regarding the evolution of the Government's opt-in
policy and the application of the UK's Title V opt-in in this
case.
The Minister's letter of 9 October 2014
8.12 The Minister (Jo Swinson) explains that Coreper
reached an informal agreement on a Presidency compromise text
at its meeting on 24 September. She continues:
"The proposal will now be considered at
the Employment, Social Policy, Health and Consumer Affairs Council
(EPSCO) on 16 October where it will be tabled for a General Approach.
The UK maintains its Parliamentary scrutiny reserve, but the Government
would be inclined to vote in favour of the proposal because through
negotiation we have achieved textual changes which clarify that
participation in activities arising from the Platform's discussions
will be voluntary. In addition, while membership of the platform
will be mandatory, given the improvements we have secured to the
text, this will not be onerous. We will carry on working with
like-minded Member States to ensure that this continues to be
so. However, I do not believe we are going to be able to improve
the proposal beyond what we have at the moment.
"Accordingly, in case there is a vote, I
must ask whether the Committee is now willing to lift its reserve.
In the event that the Committee declines to lift its reserve,
should a vote be called for, the Government will abstain. I do
appreciate that that this will pose a difficulty in that, unfortunately,
there will be little time for the Committee to respond before
the Council takes place, but I would nevertheless be very grateful
for a response before then if possible."
The proposed Council general approach
8.13 The Minister encloses with her letter a copy
of the Presidency compromise text on which she expects the Council
general approach to be based. It includes the following changes
to the Commission's original proposal:
· an
express reference, in the legal base, to the provisions contained
in Article 153(1)(b), (h) and (j) TFEU on working conditions,
the integration of persons excluded from the labour market, and
combating social exclusion;
· a
new recital (5a) noting that the nature of undeclared work, and
the means for tackling it, vary from one Member State to another
and that the development of measures to tackle undeclared work
should be tailored accordingly;
· clarification,
in recital 10, that participation in cross-border actions based
on the Platform is on a voluntary basis;
· two
new recitals (11a and 11b) confirming that Member States remain
competent to decide on their level of involvement in initiatives
agreed by the Platform and on the effect to be given to them at
national level;
· clarification
that Member States remain competent to decide which authorities
should represent them in the various initiatives taken forward
by the Platform;
· a
requirement, in Article 2 of the draft Decision, that the Platform
shall fully respect national competences and procedures; and
· the
replacement in Article 3 (defining the mission of the Platform)
of a reference to the coordination of cross-border operational
actions by new wording on "promoting and facilitating innovative
approaches of cross-border cooperation between Member States and
evaluating Member States' experiences of such cooperation".
Previous Committee Reports
Twelfth Report HC 219-xii (2014-15), chapter 5 (10
September 2014); Eighth Report HC 219-viii (2014-15), chapter
3 (16 July 2014); Third Report HC 219-iii (2014-15), chapter 3
(18 June 2014); Forty-ninth Report HC 83-xliv (2013-14), chapter
1 (7 May 2014).
51 See para 23 of the Explanatory Memorandum. Back
52
See HC Deb, 9 June 2014, cols. 374-380. Back
53
See also the WMS issued by the Minister for Employment Relations
and Consumer Affairs (Jo Swinson) on 22 July 2014, Hansard, 106WS.
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