2EU Political Parties and Funding
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Committee’s assessment |
Legally and politically important |
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Not cleared from scrutiny; further information requested |
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Document details |
Proposed Regulation amending Regulation 1141/2014 on the statute and funding of European political parties and foundations |
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Legal base |
Article 224 TFEU; ordinary legislative procedure; QMV |
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Department |
Cabinet Office |
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Document Number |
(39041), 12308/17, COM(17) 481 |
Summary and Committee’s conclusions
2.1Political parties at European level are organisations following a political programme, which is composed of national parties and individuals as members and which is represented in several Member States. Political foundations at European level are organisations affiliated with those European parties, underpinning and complementing their objectives. So, for example, the Green European Foundation is affiliated to the European Green Party.45
2.2The aim of this proposal is to make targeted changes to the existing Regulation (No 1141/2014) on EU political parties (EUPPs) and their affiliated foundations (EUPFs) (the 2014 Regulation). Proposed in 2012, that Regulation has the purpose of improving funding and regulatory frameworks for EUPPs and EUPFs, by increasing their legal recognition, effectiveness, transparency and accountability. It enables EUPPs and EUPFs to register at European level and thereby enhance their access to EU financial support, if they can demonstrate:
- representation in a sufficiently large number of Member States; and
- respect in their programme and activities for EU values set out in Article 2 TEU.46
2.3The 2014 Regulation created an independent Authority for EUPPs and EUPFs (the Authority) to deal with registration and impose sanctions, if necessary, on non-compliant EUPPs and EUPFs.
2.4When a previous Committee scrutinised the 2012 proposal, it referred the proposal for debate in European Committee B and this took place on 6 February 2013.47 Once adopted, the 2014 Regulation as directly applicable EU legislation did not need UK implementation, although the European Political Parties and European Political Foundations Regulations 201748 were made to facilitate the registration of any EUPP or EUPF which wanted to base its central administration in the UK.
2.5The Commission says that since 2014, two developments have highlighted the need to consider targeted amendments to the existing Regulation which should be in place before the EP elections in 2019:
- The Commission’s own assessment of the 2014 European Parliament elections identified work that remained to be done to increase citizen participation, to enhance the European dimension of political debate, to address low turnout, to improve democratic legitimacy of EU decision-making, to highlight affiliations between national and European parties and to increase political accountability; and
- There have been various calls from the European Parliament49 for improvements and adjustments to be made to the 2014 Regulation to address abuses of funding, the level of co-financing received and the possibility of multi-party memberships of Parliament.
2.6The proposal was published on 19 September.50 The Commission intends that it should be adopted and applicable in Member States before the next EP elections in 2019. Broadly, it envisages changes to limit who can sponsor EUPPs/EUPFs, to reduce the proportion of funding that EUPPs/EUPFs must raise themselves to access EU funding (co-financing), to increase powers for the Authority to deregister non-compliant EUPPs/EUPFs and to improve recovery of funding unduly paid to EUPPs/EUPFs. Further details of all the proposed amendments are provided in paragraph 2.14 below.
2.7There is also an amendment imposing requirements on national political parties to increase transparency of their links with EUPPs/EUPFs. Although the Minister for the Constitution at the Cabinet Office (Chris Skidmore) anticipates that the proposal is likely to be agreed in April 2018, he considers that only this transparency requirement is likely to have any impact on UK political parties before the UK exit from the EU. Even then he estimates the overall impact of the proposal on the UK and UK law as minimal.
2.8We thank the Minister for his Explanatory Memorandum, though we note that it was submitted late.
2.9It is well known that the next European Parliament elections are in June 2019. On the current Brexit timetable, the UK will have exited the EU two months before. In default of any extension of the Article 50 TEU process and a period of continued membership beyond the two years provided, there would be no continued representation of UK citizens in the European Parliament. There has been no suggestion so far from the Government that any transitional arrangements agreed between the EU and UK might alter that position.
2.10Nevertheless, we understand that if the proposal is agreed in April 2018, it has the potential to apply to the UK before Brexit for a short time. But we are reassured by the Minister’s view that only the proposed transparency amendments will have any impact on UK national parties and that the impact on the UK and UK law is likely to be small.
2.11In view of this, we only draw this chapter to the attention of the House because of the previous interest of the House in the democratic legitimacy of the European Parliament relevant to:
i)the proposal which resulted in the 2014 Regulation and which was debated;51 and
ii)the Reasoned Opinion the House issued in January 2016 on the proposal to reform the EP elections.52
2.12Although the anticipated impact on the UK of the proposal, if adopted, is likely to be minimal, we retain the document under scrutiny until it is clearer how the proposal is progressing. We ask the Minister to keep us up-to-date.
2.13We take this opportunity though to ask the Minister whether he has any updates on the state of play of the proposal to reform the EP elections, referred to in paragraph 7.11 (ii). The last time we heard from the previous Minister for Constitutional Reform (John Penrose) was on 20 April 2016.
Full details of the documents
Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU, Euratom) No. 1141/2014 on the statute and funding of European political parties and European political foundations: (39041), 12308/17, COM(17) 481.
A more detailed summary of the proposals
2.14The proposal envisages the following specific changes to the existing 2014 Regulation:
- Sponsorship: Currently, to register and be eligible for funding, a EUPP must be represented in seven Member States, either through national parties or individual politicians. While initially some EUPPs were alliances of national parties, some are now mainly formed of individual politicians. In some instances, politicians from the same national party have sponsored different EUPPs and some individual politicians have sponsored more than one EUPP. The proposed amendment would only allow national parties to sponsor EUPPs. This would prevent individuals from the same national party sponsoring different EUPPs but it does not preclude EUPPs allowing individual membership. However, by preventing the same individual being involved in registration and membership, the amendment would make it harder for entities without substantial representation within Member States to be created as EUPPs and receive EU funding.
- Co-financing: The current rule is that EU funding should not cover more than 85% of the total costs of an EUPP or EUPF. Some EUPPs/EUPFs have struggled to finance the remaining 15%. This means that EU funding intended for grants remains undistributed and unavailable to fund, for example, expenses for EP election campaigns. The amendment proposed would be that EUPPs can instead receive up to 90% funding and EUPFs can receive up to 95%.
- Distribution of EU funding: EUPPs and EUPFs are eligible for funding if they are represented in the EP by at least one member. Currently, 15% of the total amount available is distributed equally to all parties represented in the EP, with the remaining 85% distributed in proportion to each party’s share of elected members (MEPs). As this gives a disproportionate share to smaller parties, an amendment will change the two distribution shares to 5% and 95% respectively.
- Transparency requirements: To ensure a clearer link between national and EUPPs, on registration EUPPs will have to provide evidence of the publication on its member parties’ websites of the EUPP’s political programme, logo and the gender representation candidates at the last election and its MEPs.
- Deregistration of EUPPs and EUPFs: The proposed amendment would empower the Authority to deregister a EUPP or EUPF where it has ceased to comply with registration criteria, including representation and participation in EP elections, or where their registration was based on incorrect/misleading information;53
- More effective recovery of money: The proposed change would empower the authorising officer of the EP to protect the EU budget by recovering funding which has been given to individuals who have committed illegal activities either for their own or others’ benefits; and
- Adapting the existing revision clause: The proposal would amend the revision clause in the current Regulation to allow for an evaluation report to be published in the first part of 2022.
The Government’s view
2.15In an Explanatory Memorandum of 13 October 2017, the Minister first identifies the most important policy implications for the UK:
“The changes in this new Regulation are targeted at addressing loopholes in the existing system. They are not wide ranging changes and European political parties are still subject to national rules in Member States in respect of those matters not covered by the existing Regulation. The one area that could impact national political parties is the additional transparency requirement.”
2.16The Minister also comments on the timing of the adoption of the Regulation before the next EP elections in 2019, saying that this “involves aiming to reach an agreement on the Regulation by April 2018”. He adds that he does not anticipate that the proposed amendments of the existing 2014 Regulation would have any impact on UK law further to the 2017.
Policy implications of the specific proposals
2.17The Minster assesses the policy implications of each specific proposal as follows:
Requirements about sponsorship of EUPPs
2.18He says that the implications of only permitting political parties to sponsor the registration of EUPPs “appear to be minimal”. It would not affect any of the major EU political groupings but would prevent individuals from the same national party sponsoring different EUPPs or potentially setting up different groups of similar or identical political leanings.
Amending distribution of EU funding
2.19Changes to funding of EUPPs would “primarily affect” the smallest political EU groupings. The most affected of those involving UK political parties would be the European Free Alliance (including SNP and Plaid Cymru as members) with an 18.3% decrease in funding. As for the others:
- there would be no change for the Party of European Socialists (including Labour);
- the Alliance of Liberals and Democrats for Europe Party (including the Liberal Democrats) would increase by 1.5%; and
- there would be an increase of 2.3% for the Alliance of Conservatives and Reformists in Europe (including the Conservative Party).
Amends rules on co-financing
2.20The Minister says that the current co-financing rules have been particularly problematic for EUPFs. He comments:
“The amendment reduces the amount of co-financing required, therefore removing incentives for questionable practices when EUPPs/EUPFs are struggling to meet the co-financing rules, and enables more of the public funding in place to be directed appropriately.”
Transparency requirements
2.21As previously highlighted, the Minister says that this is “the only change that could impact national parties as well as EUPPs”. As this is the main area of concern identified in the EM, we reproduce in full the Minister’s comments:
“It means that, when an EUPP applied for registration, it would have to prove that its member parties (national political parties) had displayed the logo and political programme of their EUPP on their websites for a period of time, as well as information on the gender representation among their candidates at the last elections to the European Parliament and among their members of the European Parliament.
“The transparency requirements mean that an EUPP applying for funding in the 2019 financial year would have to demonstrate that its member parties were publishing the relevant information from one month after the Regulation comes into force. So, whilst it does not place a direct obligation on national political parties, it would compel EUPPs to ensure that their member parties are following the new rules. If the timing remains as planned, so that the Regulation is in force ahead of the 2019 elections, this amendment will impact on UK political parties.
“It is clear that the Regulation would lead to parties needing to show information about their EUPP on their website. However, from the current drafting in the new Regulation it is unclear whether EUPPs are also being asked to show that their member political parties publish the gender diversity data of candidates on their websites, or whether EUPPs just have to provide this data about their member parties to the Authority. This point should be clarified during the passage of the Regulation.
“Political parties in the UK already can and do include details about any European party affiliation on their website. The requirements about links to EUPPs in the new Regulations may mean that this information would have to be slightly altered but does not appear onerous.
“The Government’s position on political parties and diversity data generally is that requiring publication places a potential regulatory burden on political parties, particularly smaller parties. Instead, the Government has worked with political parties to encourage the voluntary collection of such data. If the new Regulation requires EUPPs to show that their member parties are publishing gender diversity data online then, given the Government’s current position, this could cause some concerns.”
Ability to de-register EUPPs/EUPFs
2.22The Minister considers that the changes would bring clarity to the existing rules and enable better enforcement.
Enabling money to be recovered more effectively
2.23Recovery of unduly-paid funding from individuals, not just from the EUPPs/EUPFs themselves, is “a relatively small change that would strengthen the ability for money to be recovered when necessary”.
Adapts existing revision clause
2.24The Minister observes that the change to the review clause is necessary because of the other changes foreseen to the existing Regulation.
Previous Committee Reports
None; but see 34259, 13842/12: Nineteenth Report, HC 86–xix (2012–13), chapter 2 (7 November 2012) and 34688, 6321/13: Thirty ninth Report, HC 86–xxxvii, chapter 2 (17 April 2013).
45 A list of parties and affiliated foundations can be found on the EP website.
46 Article 2 TEU lists these as human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of people belonging to minorities.
47 European Committee B, Regulating European Political Parties, 6 February 2013. Another debate in European Committee B took place on 10 June 2013 on a related Court of Auditor’s Opinion (34688, 6321/13).
48 SI 2017/474.
49 In March 2017 the EP held a plenary debate and issued an oral question directed at the Commission. On 15 June, the EP adopted a resolution calling on the Commission to revise the legal framework.
50 This means that the eight week subsidiarity deadline expires on 14 November. However, since the changes proposed can only be carried out at EU level, no subsidiarity objection would be justified. This is also the Government’s view in its EM of the 13 October.
51 See footnote 3.
52 The European Parliament’s proposal for a Council Decision to amend the 1976 Electoral Act (37431) and the EP Resolution of 11 November 2015 on EU electoral law reform (37395). See the previous Committee’s last Report on this proposal: Twenty sixth Report, HC 342–xxv, (2015–16), chapter 4, 16 March 2016.
53 This is in conformity with relevant CJEU case law on retroactive withdrawal of an administrative act within a reasonable period of time
1 December 2017