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Lord Maclennan of Rogart: My Lords, the question, “What is the annual policy strategy for?”, has already been asked in the debate. Perhaps there is a prior question: “What is this debate for?”. It is only reasonable to draw attention, as the noble Lord, Lord Grenfell, did, to the fact that it might be regarded as untimely, since we have had within the past two weeks the publication of the successor document to the one that we have before us today. Although I recognise the

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pressures on government and this House to find time for debate, if we are to play a fully effective role in helping, as a national Parliament, to shape the priorities and policies of the Union, we should have come to this discussion rather earlier.

The noble Lord, Lord Borrie, also asked about the scope of the debate. I do not object in the least to his using every opportunity to make his points, which were clearly fascinating, but he discussed enlargement and the structure of the Union post the reform treaty. These matters were not considered by the annual policy strategy, and deliberately so. The explanation is quite clear; it was considered inappropriate for the Commission to put forward its views on structure when the matter was going to be decided subsequently intergovernmentally, and has been. I am bound to say that that was not so much a self-denying ordinance as recognition of the propriety of the Commission’s role in considering the future shape of government decisions. Enlargement also seems to be primarily a matter for the Council and for Parliament to debate, and for the Commission to pick up the consequences and to advise in a technical fashion on these things. None the less, I was very interested to hear what the noble Lord had to say about them.

The content of this document, its appositeness to the issues and the clarity with which it makes its point exercised the Select Committee to which I have the honour to belong. Indeed, the question was put to the then Minister for Europe, Mr Geoffrey Hoon. His response was that it is not so much a Queen’s Speech as a manifesto. The reply given by the Commission, accompanying the letter of Commissioner Wallström to the committee, welcomes our report and our emphasis on making it more strategic and more focussed. It also describes the APS as being as far as possible focused on strategic priorities and on providing a vision for the coming year. A vision, by any test, if that is the right focus, is not a series of detailed policy pronunciamentos. It sketches out the perceived priorities for the executive arms of the European Union to focus on.

The document we are addressing seeks to do more than sketch a vision. To some extent, it is trying to flesh it out by indicating some of the priorities of action within the wider scope of the four headings that are being, by common consent, recognised as strategic priorities. Two of them seemed to be of massive importance at this time; namely, climate change and energy security.

The difficulty for the Commission in proceeding in these ways is that it does not work in an abstract way, separate from the changing situation. It is very interesting to cast one’s eye to the new APS published on 13 February and to notice that at the very beginning of the section dealing with these economic issues, it states:

That perhaps is not a reordering of priorities, but a deepening of commitment, which may have its effect on the timing of other measures.

It seems that what we have before us is part of an iterative process. It is not a conclusion. It starts the

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debate annually within the Union. The financial and budgetary context of this is clearly explained by the Commission: it is the multi-annual framework. It goes on to look at the budgetary consequences subsequently. The budgetary decisions of the annual policy statement are sometimes almost negligible, as the Commission points out. Sometimes they result in a gradual process of adjustment. It would be no more appropriate for this document to go into detailed budgetary dispositions than it would be for manifestos, but if questions are asked about the affordability of particular policies, they will have to be addressed.

This is iterative and it is highly desirable that it should be pulled together at the end of the process. It is not a long process. The European Parliament and the Council have had their input, as have national Parliaments such as ours. Interestingly, the Netherlands had a considerable input into the comment on this document. If that is to work effectively, it is surely right that the institutions of government, the Council, should be transparent about its precise reactions to this document, as the noble Lord, Lord Grenfell, said. That is entirely conformable with the view expressed in the reform treaty, which requires the Council also to bring its legislative process into the public to inform debate and to ensure inter-institutional coherence. Considerable progress has been made even since last year in the preparation of this document.

One step that has been notably taken and which goes some way to recognising the concerns of our committee is set out in the annex to the 2009 document. The areas of priority are set out under five headings which go much further in indicating specifically the measures that are anticipated as desirable and the key actions envisaged for the next year. I shall give just to take one example:

On climate change there are five bullet points, all set out quite clearly, communicably and helpfully. I think that the words of this committee have fallen not on deaf ears but where it counts, and we should take some satisfaction from that.

5.01 pm

Baroness Park of Monmouth: My Lords, let me first pay tribute to the committee for this interesting report on The Commission’s Annual Policy Strategy for 2008. I must confess that I had not realised that we have reached the 2009 report. I listened to the noble Lord, Lord Grenfell, with my usual respect, as one who has had the privilege of serving on his committees in the past; I must also say how much I support what the noble Lord, Lord Maclennan of Rogart, said about the delay in discussing such a vital issue.

As usual, wise and penetrating questions were asked, and I wish to comment on two issues. The first is that, as the report recommends that the,

the relationship of the APS to the budgetary procedure should, it says, be made clear within the current financial perspective. The committee urges the Government to work to ensure that the Council assists any effort to

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increase the co-relation between political priorities and financial resources. Recognising that, it states that,

It is hardly reassuring that members of the budget committee in one area of the work of the Commission may only see the accounts in a dedicated room, and may not take notes or quote, and that there are strong indications of incompetence and/or corruption in an institution which has not passed the scrutiny of an auditor for 13 years. The committee says that the Commission should explain financial constraints around the APS and that political priorities must be matched in budgetary terms. The report quotes the wise words of one MEP who testified:

Finally, the Committee urges HMG to work to ensure that the Council assists in any effort to increase the co-relation between political priorities and financial resources. I think that we have a national interest in that.

I should like in particular to have a clear statement on record setting out how the UK contribution first to defence and secondly to foreign affairs is decided, and where. Needless to say, I do not expect that answer on the Floor of the House tonight, but I look forward to hearing something. Does the MoD have to see some of its hard-won resources diverted to pay for yet another unnecessary and sometimes ridiculous EU venture into defence, for instance? An EU committee report of 2004, HL Paper 76, recorded that the UK paid €2.5 million to the setting up of, for instance, the European Defence Agency. It reported then that from 2006 onwards the UK was expected to contribute €1.5 million per annum and that the money would be paid from the MoD budget. That was just for the EDA. When the famous peace facilities were conceived, DfID, our development agency, made a significant contribution to financing African peace-supporting military operations, “recognising” it said,

Take, for instance, Galileo, that largely unnecessary satellite set up in response to French pressure and based in France. That agency was originally supposed to cost possibly €2 billion, but the costs have expanded hugely and have had to be met, according to press reports—and this I would indeed like to have checked—from, of all places, the common agriculture and fisheries budget. I never thought I should say in the House, “Where is our own dear Treasury? And does it have any grip on the profligacy of the EU’s institutions and its financial procedures and accountability?” It is utterly wrong that our forces in Afghanistan should go short of equipment and our service families live in disgraceful conditions while we tolerate irresponsible EU spending on defence.

Yesterday’s report on the decision of the budget control committee not to publish its report on the £107 billion EU accounts, failed by the Court of

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Auditors for the 13th year in succession, is far from reassuring. I find it deeply disturbing that we seem to have no control over EU spending. The EU defence budget was €160 billion in 2003-04—I quote from House of Lords Paper 76—and we were then and are now, with the French, the prime contributors. This cannot but mean that there is less money for our own urgent national needs. What is the position?

Illness and absence have prevented me so far from reading, I am ashamed to say, the strategy itself, but I presume it must have dealt at some length with the EU’s projected Foreign Service, with all its implications for our own international standing. The committee on this occasion evidently concentrated, rightly, on the vital question of whether plans were in any way related to resources and on the need to institute some effective control. I, however, wish to pursue the question of our future representation abroad and the impact on the foreign service of the EU’s strategy. If this has been done by the committee in another report of which I am unaware, I apologise. If not, I hope there are early plans to conduct such an appraisal.

My concerns are as follows. In the common diplomatic service projected—to which we may ultimately find it difficult to contribute effective members if HMG persists in their new proposed policy to abolish oral exams in languages for fear of stressing the candidates—there will presumably be in a typical EU mission a mixed staff of, say, a Bulgarian, a Belgian, a German and a Czech. Will they have authority to issue visas for the UK, use our biometric procedures and our security checks and issue British passports?

We are told the EU mission will take the responsibility for the evacuation of British subjects and, presumably, of all other EU nationals. I have been, as consul, responsible for just such an evacuation. It only works if you have excellent local contacts in both the Government and the rebel side in a chaotic situation. I would not wish to have to rely on an EU mission which would have, necessarily, to do the same for all EU citizens in the country.

Again, how will the costs of the British element of the work in the mission be handled and accounted for, and by whom? What about a crisis which calls for an immediate early defence capacity? What about trade? If there are important contracts coming up in, say, Brazil, do we really expect a mission that may not contain a British representative to negotiate that contact for the UK, or even to support a visiting British trade mission, especially if one of the EU countries in the mission also has an interest?

What about the British Council? We are told that there will be countries where we shall also retain our own mission. Where we do not there will, incidentally, be grave offence. But, in Argentina for instance, there could be a future EU common position requiring us to negotiate over the Falklands. The Argentines would deal with the EU mission on that issue.

It is already provided that the EU should represent member states at the UN in matters where there is a common position. It is surely logical that this will very soon extend to relations between countries and that, for instance, China will effortlessly play the EU

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card in any negotiations affecting our mutual interest by dealing for preference with the EU mission, whether or not we have our own mission in China.

There are also plans for a new EU foreign policy fund which, under the new treaty, can be approved by QMV—yet another expense outside our control. Not least, what about our overseas intelligence and security operations, particularly in the field of terrorism? There is no way such issues could be delegated to an EU mission.

I feel the greatest anxiety about the future of our country when the treaty comes into effect, and I believe that HMG have utterly failed to foresee the consequences of abandoning control of our future defence and our vital political, commercial and security interests to the EU. I do not think that even the Treasury’s joy at being able to sell some embassy buildings by closing our missions will compensate for our loss of ability to advance our national interests, to maintain our friendships and to retain a respected and well informed voice in world affairs.

5.08 pm

Lord Bowness: My Lords, as a member of the European Union Select Committee at the time of the preparation of this report, I, too, thank the noble Lord, Lord Grenfell, not only for introducing the report so comprehensively but for his chairmanship during this inquiry. At first sight, this may not appear to be the most exciting topic to which the committee could have turned its attention, but it is undoubtedly an important document and stage in the whole process of European initiatives and legislation. It is extremely welcome that the committee has pledged to bring a report to your Lordships in each year following the publication of the annual policy strategy. It is a welcome addition to the report on the annual work programme that follows in the autumn.

The noble Lord, Lord Grenfell, has already pointed out the shortcomings of the Commission paper. The Commission itself seeks to improve the presentation and enhance its clarity, and has, I suggest, responded positively to many of the suggestions made in the report. I will not repeat the shortcomings but merely emphasise how acute they are in the case of the published figures, which are extremely difficult to follow and the presentation of which needs urgent attention. The sub-committees of the Select Committee have made their comments and I hope that the Government will be able to take these forward and keep the Select Committee and its sub-committees informed about progress in the areas that have been commented on.

The Commission is moving on a very wide front. While in any package of proposals there are bound to be some about which one is more enthusiastic, it appears unlikely that everything will find its way through to the annual work programme, but, if it does, whether it will be achieved must be questionable, either because of time constraints or because all these ambitions have to be kept within the limits of the current budget. As so often, there is a need to prioritise. However, we should not lose sight of the entirely creditable attempt by the Commission to publicise its intentions in advance of the work programme. I submit

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that the challenge is for national parliaments and Governments to seize the opportunities that this presents. It has long been the case that the earlier in the Brussels process one enters and engages with a dialogue, the greater the chance of exerting some influence on events.

It is important that Parliament should know the Government’s views on the strategy and its contents. The Explanatory Memorandum recommended by the committee, going much further than the one submitted with this paper, should help. Are the Government prepared to give a commitment to do that?

This brief debate shows that European affairs can raise interest in a number of different areas. I submit that the case put by the noble Lord, Lord Maclennan, is correct. It is tempting to go into detail on some of the issues that have been raised. Suffice it to say that I cannot resist the temptation in two instances. I say to the noble Lord, Lord Borrie—and I declare an interest as vice-chairman of the All-Party Parliamentary Group on Romania—that in future we should be looking in the Commission programme to ensure that the Commission is adequately continuing its monitoring of Romania and Bulgaria, as it has been doing following accession. We should acknowledge the considerable efforts made by those countries to meet their obligations, and we should perhaps be willing to embrace them as partners in the European Union as willingly as we embrace them as partners in NATO and some of its military exercises.

Regarding the European Defence Agency, my noble friend Lady Park is a great expert in defence matters but, with great respect, I refer her to the report of the European Union Committee on the EDA in which the committee found that it was by and large a good thing and could lead to a better use of our own resources.

I have already said that it is important that Parliament knows the Government’s views on the strategy. A debate in government time, not at 4.30 on a Thursday afternoon, following consideration of the strategy by the European Union Committee and its sub-committees, would bring matters before a wider parliamentary audience. While I understand that the Minister is unlikely to give me a positive answer today, I ask him to consider it, so that we do not in future debate the APS for one year just after the publication of the APS for the next. Will the Government press the Council to publish its response to the strategy before the annual work programme is produced?

If we are prepared to use what we are offered, we can go a long way towards dispelling some of the myths about the way in which decisions are made in Brussels and ensure that we obtain the maximum influence both as a parliament and as a member state.

5.16 pm

Lord Dykes: My Lords, this has been a thoughtful debate on a subject which, as the noble Lord, Lord Bowness, said, is hardly the most exciting theme for us to consider, but which is extremely important. If only the timing of the scrutiny exercise could be arranged for a moment in the year when it attracted the public’s attention more, one would begin the process of making it more political. We could link policy and programme issues with national input and

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output of ideas on the same subject. Trying to engage the public’s interest in European matters in each member state is a continuing problem, particularly in Britain, which has unusual problems in its domestic political scene in that field, and on the wider European front.

We are once again deeply grateful to the noble Lord, Lord Grenfell, and the members of his Select Committee. Although I have the great honour to be a member of that Select Committee now, I was not at the time of the report. Good work has been done, for which we thank the noble Lord, Lord Grenfell.

As other Members have rightly said today, it is wrong that scrutiny is a year after the strategy was originally promulgated; it has to be sooner than that. There are problems for the UK’s scrutiny of these matters which need to be ironed out in the Commission’s response to our references to the inadequacy of the information that one receives and the modalities of the production of its various programmes.

The noble Lord, Lord Grenfell, said that the APS does not look like a genuine strategy yet. The noble Lord, Lord Maclennan, was right that improvements have been made in recent times, but that we are still far from a satisfactory situation. There is the inevitable conflict between the February timing of the APS and the September timing of the ALWP. Although they are very different, there are inevitable linkages. I was struck the reference of the noble Lord, Lord Grenfell, to the conflict between the six-month period of the presidencies, the 18-month intervals between meetings of the troika and the seasonality of these two important reports. When one mixes that up with all the budget attribution responsibilities and complications, it gets even worse.

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