EUROPEAN UNION SELECT COMMITTEE
EUROPEAN COUNCIL MEETING, JUNE 2006
Letter from Rt Hon Geoff Hoon MP, Minister
for Europe, Foreign and Commonwealth Office to the Chairman
Following my Evidence Session before the Committee
on 13 July, I promised to respond in writing on the following
The Conclusions (paragraph 16) note that the Council
"took stock of progress in several of the areas discussed
at Hampton Court and at the last Spring European Council, aimed
at promoting the European way of life in the face of globalisation
and demographic trends." How important are the challenges
of globalisation and demography to the future prosperity of Europe
and what approach is being taken to face up to them? What progress
has been made and is Europe's response too sluggish?
At the Hampton Court summit, EU leaders collectively
agreed that globalisation presented Europe with its biggest challenge
of the first half of this century. The Hampton Court agenda is
a major part of Europe's response to that challenge. There has
been, and continues to be, good progress made on the priority
areas for action agreed at Hampton Court. On innovation, research
and universities, the EU has agreed to establish a European Research
Council, an independent body which will be run by scientists,
aiming to channel additional funding to the best research teams
in Europe. More resources will also be available for R&D;
the December EU budget deal committed to increase EU funding for
research by around 75% in real terms by 2013. These agreements
will be delivered through the EU budget's Framework Programme
7, which we hope to see agreed by January 2007. The Commission
have also been tasked to produce further ideas on the proposed
"European Institute for Technology".
On energy, the Spring European Council reaffirmed
2007 as the target date for the liberalisation of EU energy markets.
The Commission has identified "serious distortions in the
market" and so is carrying out an inquiry into competition
within the EU energy sector which will report early in 2007. The
Commission are currently preparing an external energy strategy
to use the EU's leverage with third countries to enhance energy
security of supply; this will be discussed at the Lahti summit
on 20 October, where President Putin will join EU Heads. The Commission
will publish later this year its detailed analysis and ideas on
how best to respond to the demographic challenge.
Paragraph 21 of the Conclusions underlines the
importance of the Single Market and the Commission's review thereof
"to be followed by concrete proposals for completing the
internal market and ensuring its effective functioning".
What are the priority areas HMG would wish to see covered as part
of the Commission's review of the single market?
The removal of barriers to trade and competition
through the Single Market has had a huge impact in driving prosperity
and job creation in the EU: it has boosted EU GDP by 875
billion over 10 years, generating 2.5 million jobs. We agree with
the five themes that the Commission has identified as priorities
for their review, and the Government set out its initial thinking
on the review at the end of June in our response to the Commission
consultation (currently being laid before Parliament). We feel
that further work to removing remaining barriers should concentrate
on energy, financial and other services, domestic rail services,
and mobility of labour. We would also like the Commission to consider
a number of other areas to improve the effectiveness of the Single
Market, in particular:
how implementation and enforcement
of the Single Market rules can be improved so that people can
exercise their Single market rights effectively;
embedding the better regulation
agenda in Single Market proposals;
enhanced dialogue with countries
outside the EU on removing trade barriers, with the full involvement
of Member States; and
enhancing the conditions for
innovation and competition to flourish. Key policy areas that
can support innovation are delivering on better regulation, improving
access to venture capital and proper protection of intellectual
We will be developing our detailed ideas on
all of these objectives as the review progresses.
The Council calls for discussions to take forward
the Policy Plan on Legal Migration. This proposes giving rights
to legal migrants not yet entitled to long-term resident status.
How is the Government going to participate in the Policy Plan
on Legal Migration, given that it has so far refused to extend
the protection of the Long-Term Residents Directive to those who
are already entitled to that status?
We have consistently not opted into legal migration
measures such as the Long Term Residents Directive because we
wish to retain our frontier controls and maintain domestic control
over who is admitted to the UK, as provided for by our protocol
on Title IV of the Amsterdam Treaty.
We will assess any legislative measures on the
admission of labour migrants when we see the detail. Key to our
position will be that any such measures are flexible enough to
take account of our labour market needs and the points-based system
we are developing for routes to work, train or study in the UK.
Meanwhile, we welcome the recognition that decisions on the number
of economic migrants admitted are the responsibility of Member
We are not convinced on the need for a common
framework of rights for third country nationals, taking the view
that these are matters for Member States. We welcome the emphasis
on effective integration on legal migrants. Exchanging information
on good practice should be facilitated.
UK policy is to opt in to Title IV measures
where we can, provided they are consistent with our policy of
retaining frontier controls. In remaining outside of these Directives
it is not the Government's intention that the UK should be seriously
out of line with our European partners, and we will continue to
monitor the UK's position in relation to that of other Member
Paragraph 22 of the Conclusions refers to an Energy
policy for Europe and a set of actions. What are the priority
areas HMG would wish to see covered as part of the development
of energy policy?
There are three priority areas for action. Firstly,
although EU energy structures are increasingly integrated, electricity
and gas supplies have not been liberalised. The EU lacks flexibility
to move surplus capacity to areas where it is urgently needed.
And the EU consumer is paying too much for gas and electricity.
Secondly, we need a more coherent EU external
energy policy. The EU is increasingly dependent on imported energy,
especially gas. The UK Government has for some time advocated
a co-ordinated policy to assure energy security through diversity
of supply. We now seem to be winning that argument, but there
is much more to do. We give our full support to the action plan
on external energy relations produced last month by the European
Commission and High Representative Javier Solana.
Lastly, we need to ensure that our energy policy
is compatible with, and reinforces, our climate change objectives.
As our recent Energy Review has made clear, this Government attaches
huge importance to tackling climate change nationally and internationally.
Energy policy and climate security policy are inextricably linked.
The promotion of energy efficiency and the development of renewable
energies, to name but two examples, are common to both and are
We have recently had some exchanges with your
colleague Meg Munn over the Management Board of the European Gender
Institute. The Government supported a unanimous vote for a 25-member
board, even though the Commission, European Parliament and the
Select Committee had argued for a smaller one. We note that the
agencies like CEDEFOP have three seats for the Commission, making
78 in all. Now that we have 25 Member States, soon to be 27, is
it not time to challenge the convention that every member State
has an automatic right to a seat on the board of every EU agency?
Does the Government have a policy on this?
There is no one Member, one seat convention.
The Government's policy has been that each case should be decided
on its merits. The Government has consistently maintained that
the number of seats on the boards of EU agencies and their composition
should be decided on a case by case basis.
We note the commitment in the Preliminary Agenda
for Finland's Presidency (dated 24 May) to "mainstream, human
rights policy, incorporating it into all EU policy areas"
and to increase its coherence. Is securing agreement on the Fundamental
Rights Agency proposal a priority for the Government? Will the
UK be prepared to block the adoption of this proposal if other
Member States agree on a Third Pillar remit?
We welcome the Commission proposal to establish
a European Fundamental Rights Agency (FRA). There are, at present,
no EU bodies to assist Community institutions on fundamental rights
issues. The FRA will fill this gap. In order to add real value,
the Agency should be a fact-finding and opinion-giving body, assisting
Community Institutions on fundamental rights issues. It should
avoid duplicating the work already done by the Council of Europe
and other human rights institutions.
Negotiations on the FRA are still ongoing in
Brussels at working group level. The Finnish Presidency hopes
to reach agreement on the Agency by October 2006, so that it can
start work in January 2007.
It is unlikely, at this stage, that the question
of the UK blocking the adoption of the proposal on account of
the Third Pillar remit will arise. A number of Member States share
our view that there is no adequate legal base in the current treaties
that allows the Council to extend the Agency's remit to Third
Pillar matters (police and judicial co-operation). We will continue
our efforts to remove the Third Pillar remit from the proposal.
The Conclusions of the European Council (paragraph
21) reaffirm that the European Institute for Technology "will
be an important step to fill the existing gap between higher education,
research and innovation". How did the European Council come
to support the European Institute of Technology in the absence
of the specific proposals the Commission is (in the same paragraph)
asked to bring forward? And how does this conclusion square with
HMGs own stated opposition to the EIT in principle?
The Government is strongly of the view that
there is a need to encourage greater business and industrial investment
in research and development and closer collaboration between universities
and business in exploiting research and knowledge transfer. The
Government has therefore welcomed the Commission's two communications
as important contributions to the debate and has noted that a
well-designed and well-focused EIT could be a useful tool in meeting
the challenges in this area. The Government has not opposed the
EIT in principle but has raised questions about the model that
the Commission has presented so far. The Government welcomes the
fact that the Commission's latest Communication (which was presented
to the European Council in June) has rightly acknowledged the
complexity of the issues concerned and has recognised that it
will need to continue consulting widely with Member States and
stakeholders. It reaffirmed that the EIT will be an important
step to fill the existing gap between higher education, research
and innovation. The Government will continue to work with other
Member States with a view to influencing the shape of the Commission's
formal proposal which is expected in the autumn. The proposal
will be accompanied by a full impact assessment. This will be
the first opportunity for a discussion of the concept in a formal
Recent press reports have indicated that the Chancellor
is raising questions over whether the UK should be required to
contribute to the reductions in GNI and VAT resources to the Budget
agreed by the December council meeting under the UK Presidency.
(i) What is the definitive Government
position on whether the UK should be required to help finance
these reductions in the contributions granted to other Member
(ii) Can you give us figures which will
enable us to compare the expected contributions from the UK, France
and Italy to the EU over the period of the next Financial Perspective?
(i) Discussions on the Own Resources Directive
are on track. We are looking at the draft text carefully to make
sure it property reflects on the December deal. We are confident
that an agreement will be reached in good time to come into force
in January 2009.
The December deal specifically states that "The
UK abatement shall remain". The only areas where the abatement
is "disapplied" is in expenditure on economic development
in the new Member States. The UK has always been a strong supporter
of enlargement and accepts the additional financial burden that
this places on the more wealthy Member States.
(ii) UK contributions will be published
in the budget in the usual way. The Government does not generally
publish forecasts of other Member States' contributions, which
are a matter for the Member States in question. But we (and the
Commission) expect that, expressed as a proportion of Gross National
Income, the total net contributions over the period 2007-13 of
the UK, France and Italy will be closely similar. In contrast,
on the same basis over the period 1984-2004, the UK has paid on
average nearly two and a half times as much as France and three
and a half times as much as Italy.
20 July 2006