Select Committee on European Union Minutes of Evidence


Correspondence between the Chairman of the European Union Select Committee and the Department of Trade and Industry

Letter from Lord Grenfell to Ms Meg Munn dated 14 June 2005

7244/05 COM (2005) 81 FINAL AND 7244/05 ADD 1 SEC (2005) 328: PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL ESTABLISHING A EUROPEAN INSTITUTE FOR GENDER EQUALITY AND COMMISSION STAFF WORKING DOCUMENT

  Your Department's Explanatory Memorandum (EM) dated 31 March was sifted to Sub-Committee G for examination on 5 April, but too late for it to be considered before Parliament was dissolved for the General Election. It was considered by Sub-Committee G on 8 June.

  Although we note that the Council has already approved the setting up of the Institute in principle, and that the Department supports that decision, we question whether it is really necessary or whether the work it is supposed to do could not be more efficiently and economically done by some existing agency.

  We wonder whether the Department has consulted any of the British public bodies and NGOs working in this field to see whether they see a need for the Institute or whether they might be able to carry out the proposed activities as effectively themselves, if necessary with some additional Commission funding, in collaboration with counterparts in other Member States.

  A succession of EU Institutes of this sort have been set up over the years. We have expressed concern in the past about the value of some of their activities and the efficiency and accountability of their administrative structures.

  If we can be satisfied about the need for the Institute, we will fully support the Government's wish to ensure that it will bring added value, avoid duplication and be "budget neutral". We see a risk of duplication not only of the work done by Member States institutions but also by international bodies such as UN and World Bank agencies working in this field. The proposed activities also seem to us to be far too vaguely defined to judge their real worth.

  The Commission have not shown so far what savings it proposes to make to compensate for the additional costs of setting up and running the agency. The overall costs estimates should also be probed rigorously.

  We would be glad if you would explain more fully the Department's reservations about the proposed legal base. We recall difficulties in the past over the appropriateness of the legal base proposed for similar EU institutions.

  We would also be grateful if you would explain what is meant by having "some concerns" about the relative proportion of members nominated by the Commission and the Council.

  We also wonder how a 15-member Management Board can have "an equal representation between men and women".

  Your EM says that appropriate SMART (sic) objectives should be developed for these proposals. We would be grateful if you would remind us what the acronym SMART means and how you expect to see those criteria applied in this particular case. While we agree that the Institute should have clear and sensible objectives and allocate its resources properly, we are anxious to avoid the pitfalls of excessive targeting and measurement.

  We also note that Working Group meetings about this proposal were due to take place in April and that the Luxembourg Presidency were keen to make progress by the end of their term of office. We would welcome a report on any significant developments during these discussions since the EM was submitted.

  We also see that the agenda for the ESPHCA Council meeting on 2 June showed that the proposal was due to be considered for a "partial general approach". We understand from your officials this means that the Council would be invited to agree in principle to a text that has yet to be considered by the European Parliament and that the text would revert for further Council consideration once the Parliament had given its opinion.

  We trust that it was made clear in any discussion at the Council meeting that the UK Scrutiny reserve had to be maintained because the relevant documents had not arrived in time to be considered before Parliament was dissolved. Please let us know what happened at that meeting and how you plan to carry discussions forward during the UK Presidency.

  We are retaining the proposal under scrutiny pending your response.

Letter from Ms Meg Munn MP to Lord Grenfell dated 23 June 2005

  I am writing to update you on the progress made during the negotiations on this proposal and on the outcome of the Employment, Social Policy, Health and Consumer Affairs (ESPHCA) Council on 2 June 2005.

  At the Employment and Social Affairs Council on 2 June the proposal reached General Approach, which the UK Government is happy with and is supportive of the Council's position. However, as the proposal is subject to co-decision, negotiations will continue into the UK Presidency when the European Parliament begins its examination of thetext. The UK was able to maintain its parliamentary reserve on this dossier, but in terms of smooth handling of this dossier during the UK Presidency I hope the information below will enable the Committee to complete its consideration of this proposal at this stage.

  Negotiations on the European Institute for Gender Equality were progressed quite quickly by the Luxembourg Presidency, who tabled 6 social questions working groups in two months. As outlined in our original EM, the main issues of concern for the UK were on the legal base, the budget and the composition of the management board. These issues were addressed within the working groups.

LEGAL BASE

  In relation to the proposed legal base the Council maintained the Commission's position and supported the use of Article 13(2) and Article 141(3) in this instance. As stated in the Explanatory Memorandum, the UK Government considers the use of Article 13(2) inappropriate, as its view is that the scope of incentive measures does not cover the establishment of an Institute. This is a view the UK has consistently taken in relation to other proposals. However, although the UK view is that on balance the legal base is incorrect, it accepts that there are arguments for taking the opposite view, which is the position taken by other Member States. They are content to focus on the point that the role of the agency would be to support action taken by the Member States in order to contribute to the objective of combating discrimination, and consider that Article 13(2) is an appropriate base for this aim, in combination with Article 141(3). There is precedent for the establishment of agencies using a legal base referring to incentive measures in Regulation 851/2004 of 21 April 2004 establishing a European Centre for disease prevention and control. The UK issued a joint Minute Statement with Germany in that case in relation to the use of Article 152(4).

  Consequently, in view of the lack of support from other Member States, together with the sensitivity of the issue and the fact that the legal argument was not entirely clear, the UK took the view that it was an appropriate course of action to issue a Minute Statement at Council on 2 June to record our objections to the legal base.

BUDGET

  It was made clear at the outset of negotiations that the budget would not be discussed until the EU Financial Perspective 2007-13 has been agreed. The UK firmly agrees with this approach. For this reason, the UK supported a Minute Statement at Council stating that decisions on financial aspects must not prejudice the Financial Perspective.

MANAGEMENT BOARD

  The composition of the Management Board has been a point of much discussion during negotiations. The Presidency proposed a Management Board comprising one representative per Member State, alongside a smaller Bureau to take day to day decisions. This was unanimously adopted by Member States as the final position at Council. The Commission preferred to retain its original proposal to have a smaller Management Board, and issued a Minute Statement at Council reflecting this.

  I hope that this information is helpful to your Committee. I will, of course, update you regarding the outcome of the European Parliaments consideration and any ensuing discussions. If you wish to discuss any of these aspects further please do not hesitate to contact my office.

Letter from Ms Meg Munn MP to Lord Grenfell dated 17 July 2005

  Thank you for your letter dated 14 June requesting further information on the proposal for a European Institute for Gender Equality and its progress in Working Groups and at the ESPHCA Council on 2 June.

  It would appear that my letter, dated 23 June, which answers some of the points in your 14 June letter, crossed with yours. My letter of 23 June updated you on negotiations in Council Working Groups and the outcome of the ESPHCA Council on 2 June, and also answered the points you raise on the budget, legal base and management board. In particular, the fact that there have not been any discussions on the budget means that the Working Group has not been able to explore the costs estimates. This will be done once the Financial Perspective of the EU budget has been agreed.

  You question whether the European Institute is really necessary, whether it would duplicate work already being done by other bodies and whether the proposed activities of the Institute could be done by some existing agency.

  Gender equality is a key objective of the EU and is a fundamental principal of the current Treaty and will therefore continue to be a high profile area of EU policy. In the Commission's Communication on the Social Policy Agenda, the European Institute for Gender Equality is highlighted as a key tool for assisting the Commission and the Member States in implementing the next phase of the Community's objectives for promoting equality between men and women and ensuring that they are incorporated into Community policies.

  The Institute will therefore be able to, with its data collection, research and sharing of good practice, provide key information to policy makers in the European Commission, the European Parliament and the Member States on how best to achieve the Community's objectives. It will also help them devise policies and take action to meet the targets of the Lisbon agenda on removing the barriers to labour mobility by promoting equal opportunities.

  The purpose of the Institute is to carry out some of the tasks which existing institutions are not currently involved in, such as questions of coordination; centralisation and dissemination of information; the raising of gender visibility; and the provision of tools for gender mainstreaming. Indeed, the importance that you attach to the Institute not duplicating work done elsewhere, but adding value to other activity, has been a key element of the UK negotiating position and is well reflected in the general approach reached by Council. The current text negotiated in Council makes clear that the Institute shall "ensure appropriate coordination with all relevant agencies in order to avoid any duplication and to guarantee the best possible use of resources." However, merging the activities of the Institute with other bodies or agencies runs the risk that gender equality could be sidelined, and be inconsistent with the priority which the Commission and the Treaty currently give to gender equality.

  We have taken informal sounding from other Government Departments and the Equal Opportunities Commission on this proposal and this leads us to consider that the Institute's activities would add value to the work of other British public bodies and NGOs. In addition, the Institute will compare data from Member States at a European level, which is not necessarily being done at a national or even international level.

  It is also for this reason that we do not consider that duplication of work by international bodies such as the UN is a danger. The UN's International Research and Training Institute for the Advancement of Women (INSTRAW) carries out research and training activities on different topics at national, regional and international levels, but to date its functions have not provided comparative relevant information which is one of the key tasks for the Institute. INSTRAW's focus is more international, particularly developing countries, and it does not look specifically at how EU Member States are achieving targets set out in the Lisbon Strategy.

  You also asked about SMART targets. These are targets which are Specific, Measurable, Achievable, Relevant and Timed. In a budgetary context having these targets is a way to ensure that there is both accountability for spending and to try and make sure that spending is focussed in the right way. SMART objectives are legally required for all EU spending programmes—specified in Article 27 para 3 of the EU Financial Regulation 1605/2002.  In negotiations a number of Member States supported amending the text to ensure the overall objective meets the SMART targets. We are also pleased to see included in the text time-bound evaluation and review clauses.

  In terms of the UK Presidency's handling of this dossier, it is our aim to maintain, where possible, the Council's general approach on the text during the European Parliament consideration. I visited the European Parliament on Wednesday 13 July and there is significant interest in the proposal there, not all of which is consistent with the Council and Commission's thinking. The relevant Committee is planning to hold five sessions to discuss the Proposal and has appointed two Rapporteurs. This will make it less rather than more likely that we will be ready to see the Proposal on the ESPHCA Council agenda in December.

  You will also see from my letter of 23 June that we were able to retain our parliamentary reserve at the June Council. However, I would like to point out that we submitted the EM on 31 March, which matched the deadline given to us by the Cabinet Office.

  I hope these answers satisfy your concerns with which you can see I have a great deal of sympathy. In light of my response I would be grateful if your committee would be willing to lift its reserve, as this would be particularly helpful for the UK President of the EU to help progress on this dossier.

Letter from Lord Grenfell to Ms Meg Munn MP dated 21 July 2005

  Thank you for your letters dated 23 June and 17 July about this proposal.

  Your letter dated 23 June crossed with, but did not deal with the points raised in, my letter to you dated 14 June. We therefore agreed with your officials that we would withhold a reply to that letter until we had seen and had an opportunity to consider your substantive reply to my letter dated 14 June. Although your letter dated 17 July was only received on the afternoon of 18 July, Sub-Committee G exceptionally agreed to consider both letters at their meeting on 20 July.

  We are glad to see that the Government maintained the Parliamentary reserve when this dossier was considered by the Employment, Social Policy, Health and Consumer Affairs Council on 2 June. Nevertheless, we regret that the Government should have felt it necessary to have gone along with even a partial decision in favour of this proposal in principle when neither Parliamentary Scrutiny Committee could have had an opportunity of considering it. We do not understand why the Government are in such a hurry to be seen to be endorsing this proposal which clearly needs thorough examination.

  Your letter dated 17 July points out that the Department's Explanatory Memorandum was submitted on 31 March which matched the deadline set by the Cabinet Office for submission. Nevertheless, it was clear to your officials at the time that a document submitted on 31 March could not be considered by the Sifting process until the following week, by which time it was not possible for it to be considered by the relevant Sub-Committee before Parliament was dissolved for the General Election.

  We note what you say about the need for the Institute. We accept that gender equality is a key objective for the EU and a fundamental Treaty principle. We share the Government's commitment to the principles of equal opportunity and would support any sound, practical and cost-effective proposal that would add significant value to the work already being done by the Commission and Member States to improve gender equality and combat discrimination. But that does not mean that we are prepared, simply because the cause of gender is invoked, to go along with proposals which seem to us to be of doubtful merit.

  As I pointed out in my letter dated 14 June, we have expressed concern in the past about the value of some of the institutions which have been set up the EU over the years. We will continue to look searchingly at any proposals to set up new EU-funded institutions, whatever the cause they are supposed to espouse.

  We note that informal soundings from other Government Departments and the Equal Opportunities Commission have led the Government to conclude that the proposed Institute would add value to the work of other British public bodies and NGOs. But in my letter dated 14 June I asked whether the Department had consulted any of the relevant UK public bodies and NGOs to see whether they also saw a need for the Institute or whether they might be able to carry out the proposed activities as effectively themselves.

  We are still not clear precisely what purposes the data-collection, research, and sharing of good practice described in your letter dated 17 July are supposed to serve. Nor do we understand why it should be necessary to have a separate institute to provide policy-makers in the Commission, the European Parliament and Member States with information which they could presumably already obtain for themselves from existing sources.

  The description in your letter dated 17 July of the proposed tasks of the Institute seems to us to be aspirational but vague, and in some cases positively obscure. We therefore remain unconvinced at this stage that the proposed Institute is really necessary.

  Thank you for your explanation of the acronym SMART. If we can be satisfied that the Institute does indeed have a worthwhile purpose, we would undoubtedly expect to see that these objectives could be assured, so long as they did not impose unnecessary bureaucracy in the process.

  We fully understand what you say about the effect of the Government's position on the Financial Perspective on budgetary considerations. But, given that the proposal is supposed to be "budget neutral", we still want to know what savings the Commission propose to make to compensate for the additional costs of setting-up and running the Institute. Even if the result is "budget neutral", we would expect the Government to probe the costs estimates rigorously and report their conclusions.

  We regret that the Government has apparently gone along with the proposal to increase the membership of the Management Board from 15, as proposed by the Commission, to 25.  This seems to us to be potentially unwieldy, as well as needlessly costly. Nor does it explain how the Board can have "an equal representation between men and women" as stated in Article 10.2 of the Commission's proposal, which I mentioned in my letter dated 14 June.

  Moreover, you have not explained, as requested in my letter dated 14 June, what is meant in your EM about having "some concerns" about the relative proportion of members nominated by the Commission and the Council.

  We are also surprised to see what appears to be a new proposal for a "smaller Bureau" which your letter dated 23 June says is supposed to take "day-to-day decisions". This appears to be separate from, and in addition to, the Advisory Board provided for by Article 12.  We wonder how this additional layer of bureaucracy can be justified in an organisation of the size envisaged and would be glad to know how it is supposed to be constituted and work, what legal authority it would have, how it would affect the responsibilities and accountability of the Director and what the extra cost might be.

  What you say in your letter dated 23 June about the proposed legal base for the Institute is noted. You should be aware that, in the past, we have consistently recorded our opposition to the adoption of any proposal on an inappropriate legal base, regardless of the merits in other respects. Those reservations were raised very strongly in the case of the proposed European Centre for Disease Prevention and Control (12098/03) mentioned in your letter where the Minister concerned eventually over-rode scrutiny on this very point in order to secure adoption. That hardly seems to us to be an acceptable precedent.

  We also regret that the Government does not appear to have managed to persuade other Member States to support their view on the legal base. We wish to give further consideration to this aspect of the proposal.

  Although we are also grateful to you for reporting on your visit to the European Parliament on 13 July, we would be glad to know what you mean by saying that the Parliament's interest is not fully consistent with the Council and Commission's thinking on the Institute.

  For all these reasons, I regret that we are not prepared to acquiesce in your proposition that we should lift scrutiny at this stage. We cannot understand why you should suggest this when it is clear from your letters that, quite apart from all the work that is still needed to justify and clarify the proposal, the timetable set by the European Parliament for consideration means it is unlikely to be ready for Council decision during the UK Presidency.

  The document will be retained under scrutiny. To assist our further examination of this proposal, we would be grateful if you could give oral evidence to the Sub-Committee about it on a mutually convenient date after Parliamentary business is resumed in October. My staff will be in touch with your officials with a view to arranging this. In the meantime, we would be grateful for your considered reply to the above points.

Letter from Ms Meg Munn MP to Lord Grenfell dated 12 October 2005

  Thank you for your letter of 21 July on the Proposal for a European Institute for Gender Equality.

  I regret the detailed information that I provided you with in my last letter, dated 17 July, did not fully address all your concerns. I am now replying to your further specific questions on the Institute and I trust that this explanation will be helpful.

  The Commission brought forward a proposed Inter Institutional Agreement this year, setting out a horizontal framework for Regulatory Agencies. An EM on this was submitted to Parliament in March. Since then the proposal has stalled while further consultation takes place. We will update the scrutiny committees on any further developments. But until such a time, it remains necessary to consider Agency issues on a case-by-case basis.

  As I stated in my previous letter the objective of the Institute should be to develop methods that will improve the comparability, objectivity and reliability of gender equality data in the EU. These methods should also help to support the integration of gender equality into all Community policies. However, the UK maintains its position that the creation of such an Institute should add value and not be burdensome for Member State Administrations.

  At present there is no single EU body that collects and disseminates information on gender equality that is easily accessible and draws on MS good practice. Eurostat produces some basic statistical data that is used by the Commission, but this is limited. The Council working group has agreed that the Institute should take account of existing information and not duplicate the research done elsewhere, in particular by Eurostat. A national body would find it difficult to justify, as well as actually undertake, the production of comparable, EU level data, drawing on good practice in 25 MS, which is the defined purpose of the EGI.

  The discussion in Council working groups of the proposed tasks of the Institute is at this stage a broad exploration of the Institute's role and structure. The detailed work programme will be drawn up by the Director of the Institute and with full agreement of the Commission and the Management Board. One of the reasons the Government supported having a Management Board of 25 is to ensure that Member States have influence over the priorities of the Institute's work programme.

  You are right to expect the UK Government to probe the costs of the Institute rigorously and we will do so when the Council is given the opportunity to review the budget and the Commission has presented its figures formally. However, the Commission have explained in working groups for the new EU Programme, PROGRESS, and the Institute, that budget neutrality implies that the combined funding requirements of the Institute and the activities under the Gender Equality strand of the PROGRESS programme should be in line with the funding in the current budget heading for the existing Programme relating to the Community framework strategy on gender equality. The Treasury is content with this in principle but agrees that the Commission should provide further information on how the funds are to be re-distributed in the light of this proposal.

  Although, the membership of the Management Board has increased from 15 to 25 and would appear unwieldy, Member States were reluctant to move away from the precedent of other Agencies' structures and felt that if one of the main objectives of the Institute was to share good practice then this would be more effective if all Member States were able to be present. The proportion of Commission to Member State representation has decreased, and equal representation between men and women no longer applies to this proposal (as simpler wording such as "balanced representation" was suggested). The group has also moved away from a separate advisory forum, to take into account the increased number of members on the Board and the smaller executive bureau. This therefore reduces bureaucracy overall.

  With regard to your comments regarding the proposed legal base for the Institute, we would repeat the remarks we made in the letter of 23 June. But first I must clear up any misunderstanding that the UK considers the current legal base to be illegal. This is not the case. We do consider that Article 13(2) EC may be viewed as an acceptable legal basis for the Institute. We have however argued that there is a more appropriate legal basis for this proposal. Although we consider, on balance, that Article 13(2) EC is not the most appropriate legal base for the establishment of an Institute, I accept that respectable opposing legal views may be taken, which is the position taken by other Member States.

  They take the line that the role of the Agency would be to support action taken by the Member States in order to contribute to the aim of combating discrimination, and that thus Article 13(2) EC together with Article 141(3) EC is appropriate. I did not therefore believe that the difference between the positions of the UK and other Member States merited any recourse stronger than a Minute Statement.

  A further reason why we consider a Minute Statement was appropriate in this case is the ongoing case C-217/04 relating to the establishment of the European Network and Information Security Agency (ENISA). This is a challenge brought by the UK on the inappropriate use of Article 95 EC as a legal base for the establishment of an agency. Although it is not directly related to the present issue or Article 13(2) EC, it was expected that it might clarify what legal base will be appropriate for an agency. The Advocate General's Opinion, given on 22 September, supported the UK's challenge on the facts but failed to provide any clear guidance as to the correct legal base to be used for the establishment of an Agency. It remains possible that the judgment of the European Court of Justice will be more helpful.

  The European Parliament has made strong calls to increase the budget of the Institute and enhance its role and scope to make it a more political instrument. The Council's position on the Institute is modest compared with the approach taken by the EP. You will no doubt understand that as EU President, the UK's role now is to maintain where possible the Council's position in negotiations with the EP, but if that were to move further away, the UK would endeavour to pursue its objectives of value added, budget neutrality and avoid duplication in other activities in this area. The EP's consideration is likely to continue into 2006.

  I am pleased to be given the opportunity of appearing before the Sub-Committee on 24 November to further assist in the Committee's examination of the proposal and to explain more fully the Government's position.

Letter from Lord Grenfell to Ms Meg Munn MP dated 31 October 2005

  Thank you for your letter dated 12 October which was considered by Sub-Committee G on 27 October.

  We are grateful for your detailed reply to the various points raised in my letter dated 21 July about the Proposal. We are very glad that you have kindly agreed to give oral evidence to the Sub-Committee about the Proposal on 24 November and look forward to further discussion of most of these points then.

  So far as the proposed legal base for the Institute is concerned, however, our view is that Article 13(2) and Article 141(3) would not be the correct legal base in this case. As we see it, the key question is whether or not the current proposal is an "appropriate action" within the meaning of Article 13.  Article 13(1) is the enabling provision which allows the Council to "take appropriate action to combat discrimination". Article 13(2) does not grant any greater, or different, power. Instead it changes the procedural rules which apply to certain measures adopted in the context of Article 13(1) to allow for qualified majority voting instead of unanimity where the measure is "a Community incentive measure". Thus any reference should be to Article 13 (as in recital 3) or Article 13 (1) and (2), and not to Article 13(2).

  The next question is whether it is an "incentive measure" under Article 13(2) (an "incentive measure" being one type of "action" under Article 13(1)).

  As views appear to differ on this, it would be helpful to understand in what sense the proposal can be seen as an incentive measure. It is not clear from the correspondence why the majority of Member States and the Commission apparently consider that this proposal falls within the scope of Article 13(2). What is their reasoning? We would also be glad to know whether any other agency has been created on the basis of powers granted to adopt "incentive measures". In this context, we note that the Government take the view that the creation of European Monitoring Centre for Drugs and Drug Addiction (reference 12143/05) is not an "incentive measure" as defined in Article 15(2) 4(C). I attach a copy of Lord Warner's recent undated Explanatory Memorandum about that, which you may wish to consider and will send you a copy of my reply to him.

  The issue is important since, if the proposal fell outside the scope of Article 13(2) but remained within Article 13, unanimity would be required (the basic rule for measures under that Article). Such a change in the legal base could affect the balance of the negotiations and would also result in incompatible legal bases for the proposal, because Article 13(1) requires unanimity and Article 141(3) prescribes qualified majority voting.

  We also note from the correspondence note that the Government do not appear to have defined what legal base they consider to be "appropriate" as an alternative and would be glad to know. Do the Government believe that the Regulation should be made under Article 308?

  We look forward to your comments. Scrutiny of this item is retained.

Letter from Ms Meg Munn MP to Lord Grenfell dated 22 November 2005

  Thank you for you letter of 31 October about the proposal for a European Institute for Gender Equality, in particular on the legal base.

  I entirely understand your view that Article 13(2) and Article 141(3) would not be the correct legal base. Perhaps it might be helpful if I set out in some detail our own thinking on this point, and in particular why I am of the view that the opinion of the Commission and my colleagues in Council, that the proposed legal base should be those two Articles, is sufficiently respectable, on balance, as to warrant no further objection than the inclusion of an appropriate Minutes Statement.

  You asked what the Government's preferred legal base would be for this proposal. Our view is that Article 13(1) EC is to be preferred to the combination of Articles 13(2) and 141(3) EC as legal base(s) for this proposal. It was acknowledged that a substantial pay element brought Article 141(3) EC into play. However, we recognised that in view of the conflicting procedures of Articles 13(1) and 141(3) EC, to which you referred in your letter, there would have been compatibility issues. On balance we felt that Article 13(1) EC was sufficient legal base as lex specialis for discrimination, and Article 141(3) EC, although substantial, was subsidiary to that.

  However, if there had been pressure for a further legal base, we would have considered use of Article 308 EC. This would have been something of a last resort though as use of Article 308 EC where a specific legal base existed in the Treaty, despite the compatibility justification, would have been undesirable. Hence we took the view that Article 13(1) EC alone would be the most appropriate legal base and this was the approach taken at the Working Group.

  Our impression of the view taken by the other Member States was that they focused particularly on the wording within Article 13(2) EC concerned with "measures to support action taken by the Member States in order to contribute to the achievement of the objectives [in Article 13(1) EC]". They took the view that it was appropriate to make reference to the objectives in Article 13 EC, which Article 13(2) EC does. They did not support our view that Article 13(1) EC was the more appropriate legal base for this proposal. They also considered that it was desirable to cite Article 141 EC as lex specialis for equality in working conditions and pay. Thus they took the view that Articles 13(2) and 141(3) EC in combination were the most appropriate legal base. Although their view is not one the UK supported, it is recognised that it is not one without foundation. Let me elaborate that point.

  The stated aims of the Institute are collecting, analysing and disseminating information, developing methods for improving the comparability of data, developing methodological tools to support the integration of gender equality into Community policies and resulting national policies, carrying out surveys, organising meetings of experts, organising conferences and meetings with stakeholders to exchange information and good practice and setting up documentation resources. It could be argued that some or all of these could constitute measures designed to encourage, facilitate and (in a broad sense) provide incentives for Member State action in the field of gender equality.

  Accordingly, I think that a respectable argument can be made that these activities are sufficient to constitute "incentive measures".

  The legal base(s) for the Gender Institute Regulation will of course determine the procedure during the legislative process. While we accept that Article 13(2) EC is in some respects parasitic on Article 13(1) EC as a legal base we are not of the view that this necessitates additional reference to the latter as a legal base for this proposal. The clear intention as respects Article 13(2) EC is that it should be available as a separate and standalone legal base, as evidenced by the fact that it is subject to a different procedure. Provided Article 13(2) EC is an appropriate legal base given the content of the measure then we believe that reference to Article 13(1) EC is unnecessary.

  There is a precedent for an institution created with an incentive measures legal base. Regulation 851/2004 establishing the European Centre for Disease Prevention and Control (ECDPC) was adopted using Article 152(4) EC—incentive measures designed to protect and improve human health. The UK objected to use of that legal base and produced a joint minute statement with Germany.

Letter from Lord Grenfell to Ms Meg Munn MP dated 1 December 2005

  Thank you for your letter dated 22 November about the legal base for this Proposal, which was considered by Sub-Committee G on 1 December.

  We note what you say but are disappointed that your reply does not fully answer our concerns on this matter. In my letter dated 31 October I directed your attention to the proposal for the creation of a European Monitoring Centre for Drugs and Drug Addiction (reference 12143/05), currently held under scrutiny by this Committee, and pointed out that, in that instance, the Government said it does not consider the creation of the Centre to be an "incentive measure". In your reply you informed the Committee of another case in which the Government objected to the use of an "incentive measure" legal base for the creation of an agency.

  We are troubled by the "a la carte" approach which the Government appears to be taking to the matter of legal bases. This is all the more concerning where two apparently similar proposals held under scrutiny by this Committee at the same time give rise to opposing views on the suitability of the legal base proposed. We would be grateful for a full explanation of the Government's position on when it is appropriate to rely on an "incentive measure" legal base. In particular it would be helpful if you would explain specifically why such a legal base is considered appropriate in the present case when it is not so considered in relation to the Monitoring Centre for Drugs and Drug Addiction, and indicate the differences between the two proposals which, in the Government's view, would justify taking these apparently conflicting approaches.

  On a technical point, as I explained in my previous letter, we do not consider it appropriate to refer to Article 13(2) without referring in addition to Article 13(1), which appears to be the enabling provision. While we continue to question whether or not the creation of this Institute can be properly classed an "incentive measure", if 13(2) is the base upon which the proposal relies we do not understand why a legal base of Articles 13(1) and 13(2) and 141(3) has not been considered. This would not result in inconsistency of legal bases as Articles 13(1) and 13(2) together require qualified majority voting, as does Article 141(3). We would be grateful for your specific comments on this point.

Letter from Ms Meg Munn MP to Lord Grenfell dated 3 January 2006

  Thank you for your letter of 1 December about the proposal for a European Institute for Gender Equality, in particular on the legal base.

  In previous correspondence I have set out in some detail the views of the Government on the legal base for this proposal. While we believe that Article 13(1) EC is the most appropriate legal base for the Gender Institute, we acknowledge that a respectable argument can be made for a combination of Articles 13(2) and 141(3) EC. The question of the appropriate legal base for a Community Agency is presently before the ECJ in Case C-217/04, establishment of the European Network and Information Security Agency (ENISA). The Government brought this challenge not because we were unhappy with the policy behind ENISA but as a result of concerns over the legal base of Article 95 EC used to establish it. We are presently awaiting judgment.

  However, given existing case law of the ECJ, the Advocate General's Opinion in the ENISA case, the Opinion of the same AG in Case C-66/04 smoke flavourings (another challenge brought by the government on grounds of legal base) which has certain parallels with ENISA and the subsequent judgment of the ECJ in the smoke flavourings case a pattern is starting to emerge as to how legal base issues are likely to be addressed by the ECJ. When the judgment in ENISA is handed down we hope that the legal position will be clarified further.

  The approach being taken by the ECJ indicates that when considering the correct legal base for establishment of a Community Agency they may look at the end result of the activities to be undertaken by the Agency. The correct legal base to establish the Agency would then be found by reference to the EC Treaty and the corresponding Article covering those activities. For example, in the case of the Gender Institute if the end result of the proposed Institute's activities would constitute incentive measures then an incentive measures legal base could be used to set the Institute up. While the Government does not accept either that an incentive measures legal base should be used to establish an agency, or that in this case the proposed activities of the Institute constitute incentive measures, the above points add up to a respectable opposing view on the principle of an incentive measures legal base being used to set up an agency. I set out in previous correspondence the arguments which could be made to categorise the activities of the Gender Institute as incentive measures. The judgment of the ECJ in ENISA will probably bring some measure of clarification.

  Therefore, while our view is that Article 13(1) EC is the most appropriate legal base for the Gender Institute, we accept that there is a respectable argument in favour of Articles 13(2) and 141(3) EC instead. The same general arguments can be applied in respect of the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) and its proposed incentive measures legal base of Article 152.4(c). We understand that the Department of Health will be responding to you on this issue. We do not believe that there is any significant difference between the two Departments in the legal approach to identifying the most appropriate legal base.

  In response to the second point raised in your letter of 1 December, we have considered carefully whether the addition of Article 13(1) EC as a legal base, in addition to Articles 13(2) and 141(3) EC, is appropriate. Our conclusion, having taken advice from Cabinet Office Legal Advisers, is that Article 13(2) EC does not depend upon Article 13(1) EC in order to have effect as a legal base. If a proposal satisfies the requirements of Article 13(2) EC in terms of subject matter then no reference to Article 13(1) EC is required. If the contrary had been intended then it would not have been necessary to include a new paragraph (2) to Article 13 EC with a separate voting rule and legislative procedure and introductory words explaining that the paragraph operated independently of paragraph (1) in the case of proposals which met particular conditions. A similar position can be seen with the relationship between Articles 94 and 95(1) EC.

  I would also like to take this opportunity to provide you with the proposed breakdown of costs which you requested at the Committee's meeting on 24 November. The original proposal outlines that the annual budget for 2007 is envisaged to be about 4.5 million euros, rising to 8.5 million euros by 2013 once the institute has reached its full complement of 30 staff.

  Below are the proposed costs, broken down into three categories for the next 5 years: staff (salaries, rent. IT etc), administration (Management Board, visits, and other meetings, interpreting and translation plus other admin costs) and operations (research and publications).

Year 1

Staff (10)

1.080 million Admin

1.23 million Operations

2.19 million Year 2

Staff (17.5)

1.925 million Admin

1 million Operations

3.5 million Year 3

Staff (23)

2.576 million Admin

0.999 million Operations

3.625 million Year 4

Staff (25)

2.875 million Admin

1 million Operations

3.625 million Year 5

Staff (27)

3.159 million Admin

1 million Operations

3.741 million

  These figures support the original Commission proposal and will change according to the final shape and function of the Institute, and the Financial Perspective as concluded. The annual amounts are purely indicative.


 
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