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Motion for Papers, by leave, withdrawn.

EU Commission: Policy Strategy 2008 (EUC Report)

4.23 pm

Lord Grenfell rose to move, That this House takes note of the report of the European Union Committee, The Commission’s Annual Policy Strategy for 2008 (23rd Report, Session 2006-07, HL Paper 123).

The noble Lord said: My Lords, each spring the European Commission publishes its annual policy strategy—for brevity’s sake, I shall henceforth refer to it as the APS—which summarises the main priorities and orientations that the Commission is looking to include in its annual legislative and work programme, which is published each autumn. Thus, two weeks ago, the Commission adopted its proposed APS for 2009—which we are not examining today—which will now go the European Parliament for analysis and debate. Your Lordships’ Select Committee will be looking at it and is likely to discuss it with the Commission officials who drew it up.

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Why do we attach so much importance to the scrutiny of the Commission’s APS and to the subsequent annual legislative and work programme? For national parliaments to scrutinize effectively the development of EU policy, it is essential to engage as early as possible with the Commission’s two principal planning documents. This afternoon, we are looking at the report on the 2008 APS published by the Select Committee on 4 July last year, the first time we have conducted a full inquiry into this planning document. I wish that this could have been debated earlier, but we all know that claims on debating time in this busy Chamber cannot always be met in a timely fashion.

The APS serves as a basis for consultation with the European institutions, and beyond, and its scrutiny therefore presents a key opportunity for influencing the Commission’s thinking on cross-cutting and strategic policy matters. As far as cross-cutting priorities are concerned, the 2008 APS highlights four key challenges: tackling climate change; ensuring the availability of sustainable, secure and competitive energy; implementing the Lisbon strategy for jobs and growth, and managing migration flows to the EU. Interestingly, those four priorities reappear in the just-proposed 2009 APS, which demonstrates the EU’s continuing commitment to action in those important areas.

The other key actions set out by the Commission for 2008 within the framework of the five-year strategic objectives of the Barroso Commission relate to prosperity, solidarity, security and freedom, and Europe as a world partner. It also describes its priorities regarding better regulation and improving the EU’s communication to the world at large, and outlines the Commission’s general framework for human and financial resources for 2008.

In April 2007, our Select Committee issued a call for evidence and subsequently held evidence sessions with the Commission vice-president for institutional relations and communications strategy; with the chef de cabinet of the President of the European Parliament; with the leaders of the British Labour and Conservative delegations to the European Parliament; and with the UK Minister for Europe. In addition, each of the seven policy-based sub-committees examined the APS on the basis of their areas of expertise. At this point, I want to thank the Members of the Select Committee and sub-committees, and their clerks, legal advisers, committee specialists and committee assistants for their excellent work in putting together this report.

While Chapter 3 of this report presents specific points regarding particular proposals, our focus was principally on the nature of the document itself. What are we up against as a national Parliament when we seek to analyse this document? Our report asks some probing questions: what does the APS set out to do? How useful is it as a strategic tool? How well does it serve as a White Paper to the subsequent annual legislative and work programme? Most importantly, what is its relationship to the budgetary process? I want to focus on those questions this afternoon, because, as our report points out, the nature of the document has a considerable bearing on the seriousness with which the content is taken.

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The APS currently tries to perform a number of roles at once—as the provider of an update on the current situation of EU policy, as the setter of priorities among previously agreed EU policy areas, and as the proposer of key new initiatives for the coming year. There is therefore some confusion as to its central purpose. Is the Commission putting forward its ambitions for the coming year, or presenting a more factual assessment of the state of play? It is not clear, which makes the holding of a constructive debate on its priorities—and what should later feature in the legislative work programme—that much more difficult. We therefore concluded that future APSs need to be clearer about the purpose of the document and the specific status of each priority or proposal listed. There should be more background provided about those proposals so that the reader can more easily understand whether, in including a particular point, the Commission is prioritising, reaffirming or updating a long-standing objective, or tabling an entirely new initiative.

In its present unclarified form, it is difficult to see the document as a genuine strategy. If it focused on a few key strategic goals, their clear priority would lead to more effective debate and delivery. Moreover, those goals could be more easily communicated and the EU consequently better understood. The APS must, in our view, provide the clear, overarching strategy for the Commission’s coming year, indicating in each area what are to be the key policy intentions to be prioritised for implementation of that strategy.

Details of the legislative work programme should be left to the later document, but the APS, none the less, needs to link the strategy to pragmatic proposals with an explanation of the strategic context in which they are set. We would also like to know why some policy areas have moved up the agenda and why some have moved down.

In our view, this lack of focus in the APS is the inevitable result of the way the Commission constructs it, which is from the bottom up. The Commissioners and their services are asked to present to the Commission President their initiatives and main policy priorities which are then analysed and prioritised by the Secretariat-General, which then prepares the APS for inter-service consultation. This is the period when each directorate lobbies for its own area and point of view. That means that almost nothing is excluded from the final strategy—the old Christmas tree syndrome. Surely, the construction of the APS should be led from the top, with the College of Commissioners deciding on the vision behind the strategy on the basis of a discussion in which the Commissioners select both their strategic priorities and the policy areas which must be demoted to make room for them. The detail could then be provided by the Commission services.

Of course, there has to be some flexibility to allow late-emerging priorities to be taken into account, but a rigorous top-down approach will ensure a more focused, strategic, better structured and more coherent APS. The APS's utility depends crucially on a constructive debate on the EU's priorities for the coming year among the EU institutions. This structured dialogue, as it exists today, tends to focus only on details, looked at from a technical point of view in subject committees.

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What emerge are nothing more than shopping lists. An APS which is both constructed and deconstructed predominantly by subject committees is unlikely to be strong on the strategic content necessary to provoke the bigger-picture debate which the Commission says it wants. So the committees need to co-ordinate their scrutiny and focus on broad priorities. This calls for a strong political lead generating a more political response to the document.

The present process is further complicated by the fact that the Council—not unreasonably—has its own agenda and priorities, set by the six-month presidencies and based on member states' concerns and the collaborative 18-month programmes. This does not exactly guarantee coherence. There is no tripartite effort among the Council, the Commission and the Parliament to reach an inter-institutional agreement on the priorities following publication of the APS, and the Council's comments on the APS are neither made public nor even shared with the Parliament. That must, in our view, be corrected, and we said so very strongly. The APS should be a presentation of the Commission's strategic thinking to the other institutions, provoking a political debate and providing the Council with options to discuss.

Earlier this week, during the visit of the President of the European Parliament to London, I learnt from his chef de cabinet, who had given evidence to our inquiry, that our advice on this had not been lost on that institution and that it was working with the Commission and the Council towards structuring a tripartite inter-institutional process more along the lines which we were advocating.

Your Lordships' committee has also called on the Commission to provide a clear justification for its key proposals, explaining why the EU should act in these areas and setting out the limitations on such action. We want to know what is the added value envisaged in these key proposals; how they fit into its general strategy and financial framework; and, crucially, how it will ensure delivery of them. That is missing, and it should not be.

The Commission must also explain clearly in the APS the financial constraints around it, and the ways in which the Commission can or cannot change its spending priorities within the financial framework. Political priorities must be matched in budgetary terms, and to do that it needs to declare which areas of action are receiving less funding in order to allow it to prioritise others.

Throughout discussions about what the EU can do, there is always insufficient attention paid to where the money is going to come from and how they are going to get there. The Council is particularly guilty of this. We feel strongly that the Commission, the Council and the Parliament need to forge a closer link between the budgetary and legislative processes.

We do not want the APS to become dominated by a financial bidding process, but the relationship of the APS to the budgetary process must be made clear in the context of the current financial perspective. We recognise that the Commission is caught between the Council and the member states which set out the

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financial perspective on the one hand, and on the other the Parliament which in most areas now—and in almost all areas if the Lisbon treaty is ratified— is and will be the budgetary authority. Ultimate responsibility lies in the Council, so it is crucial that it assists any effort to increase the correlation between political priorities and financial resources.

We are pleased that, in the 2008 APS, the Commission has included a list of communication priorities for the current year. It seems obvious to us that one important conduit for communicating the Commission's priorities and better engaging the public in a debate on what the EU’s priorities should be is the APS itself. But it needs to be a clearer, more focused document if it is to serve that purpose. We hope that our recommendations regarding the structure of, and explanations behind, the APS will help improve its accessibility.

Finally, the APS 2008 includes a section entitled “Better Regulation—at the Heart of the Commission's Daily Work”. Of course, we welcome this. There is a logic to putting forward its simplification proposals at the same time as its policy priorities, in order that both may be properly discussed before they are integrated into the annual and legislative work programme. But to maintain the strategic nature of the APS, it would do well to publish a separate annual better regulation report alongside the APS.

The Commission has studied our report and Commissioner Wallström has responded encouragingly in most cases, point by point, stating that our recommendations are being taken seriously. She had earlier made it clear that she wanted the national Parliaments to make an input into the process of policy formulation which is based on the annual policy strategy and the annual and legislative work programme. She said:

Well, we have had our say, and we shall now be looking carefully at the 2009 APS to see to what extent our recommendations have been taken on board. However, in response to our report, she suggested that the extra information we required, particularly on finance and the justification for these proposals, might tend to diminish the strategic impact of the APS because it would become too long a document. I seriously believe that it was wrong there. The length of the document is not the problem: the problem is what is in it. There must be those justifications, and the linking of the budgetary procedure to the building up of the strategy if it is going to be a meaningful and accessible document.

I close by saying that we very much welcome the Government’s helpful response from the Minister for Europe, Jim Murphy, and call on the Government to help ensure that those practical proposals which they can and should support will indeed be implemented by the Commission. I look forward to the Minister's reply. I beg to move.

Moved, That this House takes note of the Report of the European Union Committee on, The Commission’s Annual Policy Strategy for 2008 (23rd Report, Session 2006-07, HL Paper 123).—(Lord Grenfell.)

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4.38 pm

Lord Borrie: My Lords, listening with interest and admiration to the words of my noble friend Lord Grenfell, I had the strong feeling that his questions and criticisms—or rather those of the Select Committee over which he presides—are a good deal more significant than the details of the European Union’s annual policy strategy itself. He rightly expressed concern about the purposes of the annual policy strategy and criticised its lack of clarity. His criticism of a lack of coherence and focus seems very well justified. For noble Lords generally, whatever particular interest in European Union affairs we may have, it is really quite difficult to tell what priority the EU attaches to that interest.

Last May, nine months ago, this House debated a report from the committee chaired by the noble Lord, Lord Grenfell, on the subject of enlargement of the European Union. I took the view—which was not generally accepted around the House—that for the time being at any rate, we should be cautious about further enlargement. There should be a pause. On that occasion, however, the European Union Select Committee, in the person of the noble Lord, Lord Grenfell, and Her Majesty's Government, in the person of the noble Lord, Lord Triesman, favoured the European Union continuing to further the aspirations of the Balkan states and Turkey to join the European Union, albeit accepting that it would take some years, particularly in the case of Turkey. The report before us today into the strategy of the European Union makes no mention that I can see of any strategy on the size or extent of the European Union or on further enlargement, except for a quotation from the leader of the Conservative MEPs, Mr Timothy Kirkhope, welcoming the EU’s continuing,

I would like to think that enlargement is being put on the back burner. But I doubt that it is, partly because in the minds of the Government here and in the minds of many Governments in the Continent of Europe, enlargement seems to have a momentum, inevitability and desirability of its own that will withstand the more cautious approach of people such as myself. However, since our debate nine months ago, various events known to us all have reinforced the need for caution.

The declaration of independence by Kosovo, supported by the majority of EU countries, has been strongly opposed by a number of EU countries, so that the EU is divided. The countries that oppose independence are Spain, Greece, Cyprus, Slovakia and Romania—all of which are states with separatist problems of their own and which quite reasonably complain that the European Union seems to have no strategy or policy on where the line should be drawn when claims of self-determination emerge in the EU or in the vicinity of the EU among states that might wish to accede to it.

Following the Kosovan declaration of independence, the Serbian Government—a keen aspirant, as I understand it, for membership of the EU in the near future—have behaved disgracefully in providing no police support against the violence of crowds of people in Belgrade

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attacking the embassies of the United Kingdom and of other countries that have expressed support for Kosovan independence. I need hardly remind your Lordships of the continuing failure of the Serbian Government to hand over General Ratko Mladic, who has been wanted by the International War Crimes Tribunal in The Hague for some years. Is that the best that Serbia can do to uphold the rule of law?

Then there is Turkey. Last week it invaded northern Iraq with tanks and planes in what the Financial Times called a “ferocious attack” in pursuit of Kurdish insurgents, no doubt highly provoked over a long period but without the support of fellow NATO members, whether the United States or the European members. The Turkish Parliament’s relaxation of the rules against women wearing headscarves in universities is a significant step away from the secularist state that has helped to modernise and democratise Turkey since Kemal Ataturk took power in 1923. Dozens of women continue to be killed in Turkey every year for crimes of so-called honour.

The Lisbon treaty will soon come before this House. There are some fine words in the Lisbon treaty about values, freedom, democracy, equality, the rule of law and respect for human rights. Some of the most recent additions to EU membership—I am thinking of Romania and Bulgaria—were treated very generously by the EU when they were admitted, when assessing their record on the rule of law and human rights. I hope for more robust testing of all future applicants for membership.

Within Britain, the Government have rightly been insisting—this is topical today—on everyone seeking to reside in Britain having to pass certain tests and to demonstrate adherence to the same sort of values that I have just listed, which appear in the Lisbon treaty. To my mind, it is essential that throughout the EU, all members, new, old and aspirant, should adhere to those values. That should be a key part of EU strategy.

4.45 pm

Lord Ryder of Wensum: My Lords, I join the noble Lord, Lord Borrie, in expressing admiration for the comprehensive nature of the report, as well as the way in which the noble Lord, Lord Grenfell, opened our debate today.

I shall confine my brief remarks to paragraphs 45 to 53 of the report. The paragraphs relate to better regulation and the APS. I shall pose a few questions to the Minister; of course I shall fully understand if he cannot provide answers today, but perhaps he would be kind enough to write to me later.

I stress from the outset that I applaud the president of the Commission's goal to curb regulatory costs to business in both substantive and administrative terms by 25 per cent by 2012. That aim needs to be set in the context of the Prime Minister adding his name to the assertion that half of all new regulations affecting UK business originate in the EU; although some studies, notably in Holland, put the figure higher.

I also draw the Minister's attention to the words of the noble Lord, Lord Jones of Birmingham, when he

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was director-general of the CBI. He warned that India and China would soon “eat Europe for breakfast” unless drastic action was taken to curb regulatory costs in the EU. Not that the EU has to look just to the competitive edge of the Far East. Other studies point to the compliance costs of regulation at 5 per cent of GDP in Europe, as against 2.5 per cent in the USA.

No one can doubt the imperative to achieve the president of the Commission’s 2012 objective. Alas, several barriers stand on the way of progress. A disjunction still exists between parts of the Commission responsible for enterprise and parts responsible for social affairs. The signs indicate that the gap is as wide as ever. I wonder whether that is the Minister's impression, and what pressures the Government are exerting on Brussels to close that divide.

Of course the Commission, like all bureaucracies, retains a culture of its own. In this case, Commission officials often seem to continue to take as much delight in gaining acceptance for their pet regulations and directives as scientists get from the publication of papers in serious journals. Are the Government confident that the president’s remit on the 2012 target runs among his officials? Although it appears on the surface that the Commission’s regulatory impact assessments are now more intensive, I wonder whether they are extensive. Does the Minister know what percentage of EU legislation is subjected to the full process of assessment, notwithstanding the Commission’s stated desire to weigh the costs and benefits of new draft laws?

I was struck by some of the evidence given to the committee of the noble Lord, Lord Grenfell, by the chef de cabinet to the president of the European Parliament. He claimed that it was the Council that was “the weak link” in impact assessments and legislative planning. He went on to criticise the Council’s approach to co-ordination with the European Parliament on legislative planning. Is this view of the Council’s apparent shortcomings shared by the Government, and if so, what have they done to rectify the position, given Commissioner Mandelson’s warning that the cost of red tape is roughly double the economic benefits of the single market?

The Commission president and the Government have outlined their good intentions and their targets in the EU’s regulatory fields, but more tangible evidence is required of their specific achievements to date. I would be extremely grateful to the Minister for setting them out, if not today then later in greater detail by letter.

4.51 pm

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