Documents considered by the Committee on 28 March 2018 Contents

4EU Political Parties and Funding

Committee’s assessment

Legally and politically important

Committee’s decision

Cleared from scrutiny

Document details

(a) Proposal for a Regulation of the European Parliament and the Council amending Regulation (EU, Euratom) No 1141/2014 on the statute and funding of European political parties; (b) Opinion of the European Court of Auditors — Proposal for a Regulation on the European Parliament and the Council amending Regulation (EU) No 1141/2014 of the European Parliament and the Council of 22 October 2014 on the statute and funding of European Political Parties and European political foundations

Legal base

(a) Article 224 TFEU; ordinary legislative procedure; QMV; (b) —

Department

Cabinet Office

Document Numbers

(a) (39041), 12308/17, COM(17) 481; (b) (39427), 16004/17, —

Summary and Committee’s conclusions

4.1Political parties at European level are organisations following a political programme which are 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.41

4.2The aim of the proposed Regulation (document (a)) 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).

4.3Document (a) 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. It also aims to increase transparency of the links between EUPPs and EUPFs and national parties. Further details of all the proposed amendments were provided in our last Report at paragraph 2.14.42

4.4The Commission intends the proposed Regulation to take effect in time for the 2019 elections, aiming for political agreement by April 2018. In its EM, the Government considered the proposal would have minimal impact on UK political parties because the 2019 EP elections would take place after Brexit. However, there remained one concern. To improve transparency EUPPs would be required to prove that 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 data about gender representation among their candidates and MEPs. 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. Assuming the Regulation was in force some time before the 2019 elections, the Government was concerned that this requirement would impact on UK political parties for a short time before Brexit. The then Minister for the Constitution at the Cabinet Office (Chris Skidmore) commented in the Government’s EM43 on the proposal:

“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.”

4.5In our first Report, we recognised that the proposal was likely to have little impact on the UK, but wanted to wait for further progress before clearing the proposal. We took the opportunity in the meantime to ask for an update on a previous EP proposal to reform EU electoral law.44

4.6At the end of January, the Government deposited document (b), a European Court of Auditor’s (ECA) Opinion on the proposed Regulation. We now report that the current Minister (Chloe Smith) says that the ECA Opinion aligns broadly with the proposals, welcoming those that could improve the financial management, accountability and transparency of funds allocated to EUPPs and EUPFs. She also notes that the ECA refrained from commenting on the proposal that EUPPs and therefore member (national) parties should publish gender diversity data about their MEPs and candidates.

4.7She also provides an update on document (a), as at the end of January 2018. She says that a revised text based on previous Working Party discussions during the Estonian Presidency envisaged:

4.8The current Minister now writes to update us again on the progress with the text. She tells us that the new aim is for the proposal to be “in force” on 30 June 2018. It is due for final Council adoption after the EP plenary in April, having already been agreed provisionally in COREPER on 7 March. As the wording in the current confidential (Limité) text removes any obligation, direct or indirect, for national political parties to have to publish gender diversity data, the Government’s concerns have been addressed. She therefore asks us to clear the proposal from scrutiny.

4.9We thank the Minister for her Explanatory Memorandum (EM) on the Opinion of the Court of Auditors and her letter updating us on the progress of the proposed Regulation.

4.10Based on the information set out in the Minister’s letter and EM, we are now prepared to clear both documents from scrutiny. However, we ask the Minister to note that only seeking clearance after agreement on the substance of a proposal has been reached in COREPER can deprive the Committee’s scrutiny reserve of effect, if it then only bites on a later “rubber-stamping” vote in Council. We expect to be given good notice of potential agreement in COREPER as a matter of best practice.

Full details of the documents

(a) Proposal for a Regulation of the European Parliament and the Council amending Regulation (EU, Euratom) No 1141/2014 on the statute and funding of European political parties: (39041), 12308/17, COM(17) 481; (b) Opinion of the European Court of Auditors — Proposal for a Regulation on the European Parliament and the Council amending Regulation (EU) No 1141/2014 of the European Parliament and the Council of 22 October 2014 on the statute and funding of European Political Parties and European political foundations: (39427), 16004/17, —.

The Government’s view of document (b)

4.11In an Explanatory Memorandum of 29 January 2018, the Minister for the Constitution (Chloe Smith) provides a commentary on the ECA Opinion:

4.12The Minister notes that the ECA Opinion aligns broadly with the proposals, welcoming those that could improve the sound financial management, accountability and transparency of funds allocated to EUPPs and EUPFs.

The Minister’s letter of 15 March 2018 on document (a)

4.13The Minister first addresses the Government’s previous concerns about the impact of transparency requirements on national political parties before Brexit:

“By way of background, the Government is not opposed to the publication of such data, indeed we are committed to encouraging political parties to publish this information, but we do not think that introducing legislative requirements is the right approach. Other Member States also had concerns about this requirement which were raised during discussions at Working Group.”

4.14Turning to the overall speed and progress of the negotiations she says that there has been “fast progress” with “provisional agreement” now being reached by the Council and EP. She attaches two Limité letters, subject to the usual understandings about confidentiality, one of which comprises the compromise text agreed. She adds:

“As you will see, the compromise text says ‘the inclusion of information on gender balance in relation to each of the member parties of the European political party should be encouraged.’ The Government endorses this approach.”

4.15She then provides us with an update on the progress of the EP’s proposal on reforming the electoral law of the EU:46

“Those proposals are still under consideration by Member States and I will write to the Committee with further details should any firm proposals emerge. If any proposals are agreed, given that the United Kingdom will cease to be a member of the European Union on 29 March 2019 and will therefore not be taking part in future European Parliamentary elections, in practice, the proposals would not have any practical effect in the UK.”

4.16Finally, she requests that we clear the proposal from scrutiny to enable the UK to support the proposal given the progress in negotiations. She explains:

“The aim is for the new provisions on European Political Parties to enter into force by 30 June 2018, and be applicable in the 2019 financial year, ahead of the upcoming European elections. ln view of this, progress has been made quickly with the European Parliament and Council rapidly reaching agreement, and was on the agenda of COREPER on Wednesday 7 March. It is then likely to be voted on in the European Parliament at its April Plenary. After this, Council will look to finalise its agreement to the text.”

Previous Committee Reports

Third Report HC 301–iii (2017–19), chapter 2 (29 November 2017).


41 A list of parties and affiliated foundations can be found on the EP website.

42 Third Report HC 301–iii (2017–19), chapter 2 (29 November 2017).

43 Explanatory Memorandum of 13 October 2017.

44 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. A Reasoned Opinion was approved by the House and sent to the EU institutions on 3 February 2016.

45 Opinion 1/2013.

46 See footnote 4.




3 April 2018