House of Lords - European Union - Thirty-Second Report

Select Committee on European Union Thirty-Second Report

CHAPTER 2: The Committee's Work

5. A core aspect of the Committee's work is the routine scrutiny of the EU documents which are deposited in Parliament by the Government. Each document is followed by an Explanatory Memorandum (EM) setting out the Government's views on a number of key areas including the policy implications of the proposal and the timetable for its consideration in the Council. The Chairman conducts a first sift of each document and accompanying EM deposited in the previous week and, drawing on the advice of the Clerks and the Legal Adviser, decides whether it should be referred to one or more of the Sub-Committees or cleared from scrutiny. Documents which are not cleared are subject to the House's Scrutiny Reserve Resolution which can be found at Appendix 2.

6. During the period of this report, 926 EMs relating to deposited documents have been sifted by the Chairman with 399 being referred to the Select Committee and its Sub-Committees. The vast majority of routine scrutiny is carried out by the Sub-Committees as demonstrated in Table 1 below.

TABLE 1

EMs considered

Committee	Number of EMs Considered
Select	7
Sub A	66
Sub B	62
Sub C	76
Sub D	61
Sub E	49
Sub F	33
Sub G	46

7. Consideration of sifted documents is a substantial undertaking and forms a large part of the work of the Sub-Committees. This may include an exchange of correspondence with the relevant Minister until the Committee is satisfied and prepared to clear the document.

8. Significant items of routine scrutiny in the past year include Sub-Committee A's consideration of the European budget for the post-2013 period and several items relating to VAT and VAT fraud. Sub-Committee B carried out detailed scrutiny of the funding arrangements for the Galileo project, looked into the Single European Skies II proposals and took evidence from Department of Transport officials on the negotiations for part 2 of the EU-US Aviation agreement. Significant items of scrutiny carried out by Sub-Committee C included consideration of an EU mission to Chad and the Central African Republic, Council Guidelines for the European Defence Agency's work in 2008 and proposals for Stabilisation and Association Agreements between the EC and Bosnia and Herzegovina.

9. Sub-Committee D's routine scrutiny included detailed examination of three proposals forming part of the Climate Change and Energy package published by the Commission in January 2008. The Committee wrote a letter to DEFRA and the Department for Transport jointly setting out its view that the proposals must be examined within the broader context of the Government's overarching strategy for achieving greenhouse gas emission reductions. The Committee received a joint response from both Ministers.

10. Areas of scrutiny where Sub-Committee E has been particularly active include proposals for Eurojust and the European Judicial Network, for the In Absentia Framework Decision and for Wills and Succession. In relation to each the Sub-Committee raised concerns and have received detailed responses from the Government. The Government has indicated a particular interest in the Sub-Committee's input on the proposals for Wills and Succession, which are of real practical importance for European citizens, but involve particularly difficult issues of reconciliation of differing legal approaches. After the Sub-Committee had expressed concern regarding the adequacy of the proposed fundamental rights protection in the proposed In Absentia Framework Decision, it was informed by the Attorney General of the addition of further significant fundamental rights guarantees.

11. Sub-Committee F's scrutiny role included looking in detail at a proposal for a directive on conditions of entry and residence of third-country nationals for the purposes of highly qualified employment. The Sub-Committee is also continuing its scrutiny of a Commission Communication relating to the creation of a European Border Surveillance System.

12. Sub-Committee G scrutinised particularly closely the proposals on temporary agency work and on working time, taking evidence from the Minister following the Council's adoption of its Common Position and prior to the European Parliament's Second Reading. Other scrutiny items it dealt with included proposals for a directive on credit agreements for consumers, the European Year for Combating Poverty and Social Exclusion and a proposal for a Regulation on the provision of food information to consumers.

Major Inquiries and Reports

13. In addition to its routine scrutiny work a Sub-Committee may also decide to conduct an inquiry into a document or into an issue. The Sub-Committee's report is submitted to the Select Committee for publication and may also be debated in the House. A full list of reports published over the last year can be found at Appendix 3 while the major committee inquires are outlined below.

LISBON TREATY

14. The most substantial piece of work carried out by the Committee over the last year was its inquiry on the impact of the Lisbon Treaty. This involved unprecedented collaboration between all seven Sub-Committees and the Select Committee. Each Sub-Committee explored the Treaty's effects in its own area of expertise.

15. The European Union (Amendment) Bill was introduced by the Government during the inquiry. The two Houses of Parliament were asked to pass the Bill to enable the Government to ratify the Treaty. The main aim of the report, which was published on 13 March 2008, was to inform the House of the most important aspects of the Treaty, particularly by comparing its provisions with the status quo, and assessing their impact on the institutions of the EU, on the Member States and on the UK.

16. The report looked in detail at every significant provision of the Treaty and was designed to aid Parliamentarians in their consideration of the Treaty's potential impact. The Committee sought to analyse the Treaty itself and did not address the question of whether or not there should be a referendum. The Chairman stated on publishing the report that: "We have deliberately not considered arguments for or against a referendum on the Treaty as our aim was to provide an objective analysis of the Treaty itself. It is for Parliament as a whole, not this Committee, to decide whether or not this Treaty should be ratified and our aim was to help ensure it makes an informed decision."[1]

17. We welcome the positive response which the report has received in a number of quarters. For example, during committee stage of the Bill the Lord President, Baroness Ashton of Upholland stated: "I have 50 pieces of paper covered in quotations, many from leaders of other European states and from all over the place. I do not intend to use them. I intend to quote only Members of your Lordships' House and another place. I pay great tribute to, and will use substantially, the reports of the European Union Select Committee in another place, the committee in your Lordships' House and the Constitution Committee."[2]

ANNUAL POLICY STRATEGY (APS)

18. In 2007 the Select Committee carried out an inquiry on the Commission's APS for the first time and has repeated the exercise this year. The APS provides an opportunity to consider the Commission's intentions as early in the legislative process as possible. The main aim of the Committee's report which was published on 23 July 2008 was to influence the Commission's Legislative and Work Programme which will be published in November.

19. The Committee criticised the Government's Explanatory Memorandum on the Annual Policy Strategy for not giving enough detail of the Government's views on the European Commission's proposals. The Committee recommended wider consultation on the document. The Committee made clear that this should include Treasury scrutiny of the financial allocations in the APS to inform the Government's response to the European Commission.

SOLVENCY II

20. Sub-Committee A carried out an inquiry examining the Commission's proposals to reform the regulation of the European Insurance and Reinsurance industry. The proposed Directive will have far-reaching consequences for the insurance industry, not least as it will change the amount of money companies have to hold in order to be deemed solvent. The proposals will introduce a regulatory system which is similar to that already introduced by the Financial Services Authority (FSA) for firms operating in the United Kingdom. The Sub-Committee largely welcomed the proposals but highlighted several issues that were yet to be resolved such as the calculations firms should employ when valuing the risk inherent in their business.

EUROPEAN TRADE POLICY

21. Sub-Committee A has also been carrying out an inquiry on European trade policy. In particular, the Sub-Committee has been looking at whether there has been a move away from attempting to negotiate multilateral trade agreements such as the Doha round and towards bilateral agreements. The Sub-Committee is also examining whether trade liberalisation is threatened by protectionist responses to the global economic downturn, and is looking at the proposed Economic Partnership Agreements (EPAs) which the Commission is currently negotiating with developing countries. As part of the inquiry the Sub-Committee visited Brussels and Geneva and took evidence from a number of witnesses including Commissioner Mandelson and the Director-General of the World Trade Organisation. The report is due to be published in November.

EUROPEAN REGIONAL POLICY

22. Sub-Committee A also conducted a short inquiry into European Regional Policy. This was undertaken as part of a series of work to prepare for the Commission's proposals for the European budget in the period after 2014. The Sub-Committee concluded that the current distribution of 20% of regional funding to the most prosperous 80% of regions was inefficient and that all of the funding should be targeted at the poorest regions. The Sub-Committee also found that the administration costs of the funding are not unreasonable, and that there is an appropriate balance between regions being able to propose specific projects and the application of Europe-wide priorities.

SINGLE MARKET

23. Sub-Committee B conducted an inquiry into the Single Market to coincide with the debate arising from the European Commission's review of the Single Market. Its report "The Single Market: Wallflower or Dancing Partner?" was published on 8 February 2008. The Sub-Committee chose to concentrate on three areas of the Single Market: the energy industry, financial services and telecoms. Evidence was taken from a wide range of witnesses, and included two visits to Brussels and a video link session to take evidence from an independent French energy company. The press release and foreword of this report were translated into French and German in order to improve their profile in Europe.

24. Sub-Committee B also carried out an inquiry into the proposed EU renewable energy target of 20% by 2020. The Committee looked into the achievability of the target and its regulatory consequences. As part of the inquiry the Committee took evidence from a number of witnesses in Westminster and Brussels. The Committee also sailed out to the Scroby Sands wind farm owned by E.ON off the coast at Great Yarmouth, saw the turbines at Avonmouth docks and visited the homes of two customers of Good Energy who have micro-generation facilities fitted.

THE EU AND RUSSIA

25. Sub-Committee C carried out an inquiry examining the relationship with Russia at the outset of the new Russian Presidency. The Committee visited Moscow as part of the inquiry and held a number of meetings including with the Deputy Minister of Foreign Affairs responsible for EU-Russia Relations. The Committee's report which was published on 22 May 2008 calls on the EU to continue to build on its long term relationship with Russia and to pursue a policy of engagement at all levels and across all policy areas to develop the necessary bilateral co-operation using a hard-headed and unsentimental approach. The Sub-Committee, however, expresses concern about Europe's dependence on Russian energy and comments that Russia's "near abroad" where both the Russians and the EU have close geopolitical interests is a particularly sensitive area and should be treated as such by both.

26. The Sub-Committee concludes that all indications are that President Medvedev's presidency will be characterised by a high degree of continuity with the policies of President Putin. It supports President Medvedev's stated aim to strengthen the rule of law in Russia but warns that it remains to be seen what concrete steps he will take to achieve this.

27. The inquiry preceded the crisis in Georgia in August 2008. The debate on 10 October gave the House an early opportunity to discuss those events in the broad context provided by the report.

FUTURE OF THE COMMON AGRICULTURAL POLICY (CAP)

28. Sub-Committee D carried out an inquiry looking at the Commission's "Health Check" proposals for the reform of the CAP. In its report which was published on 6 March 2008 the Sub-Committee argues that farm subsidies in their present form are a poorly-focused policy instrument. Payments to farmers and landowners are being used as a proxy for the attainment of social, economic, and environmental goals that should instead be targeted directly, whether at the national or EU level.

29. The Sub-Committee therefore advocates a phased reduction in farm subsidies from 2014, and proposes that a significant proportion of the funds thereby released should be channelled into the rural development element of the CAP—which already exists, but currently consumes only about a fifth of total spending on the CAP. Rural development should cease to be equated with the fortunes of the agriculture industry and should instead address the broader challenges and opportunities facing Europe's rural areas.

PROGRESS OF THE COMMON FISHERIES POLICY (CFP)

30. Sub-Committee D also carried out an inquiry examining the progress of the CFP since it was reformed in 2002 with the aim of contributing to ongoing negotiations on new CFP legislation. As part of this inquiry the Committee visited Peterhead where it held evidence sessions open to the public.

31. In its report published on 22 July 2008, the Sub-Committee concluded that the CFP's "dismal reputation" is warranted on several counts: an intricate and extensive regulatory regime has failed to protect fish stocks; compliance is poor and enforcement uneven; many segments of EU fishing fleets experience poor profitability; and fisheries management is carried out through an over-centralised, top-down legislative process that has alienated stakeholders and overburdened the European Commission.

32. The Sub-Committee argue that the root cause of the CFP's poor performance on biological and economic indicators has been EU Member States' reluctance to bring the size of their fishing fleets into line with available fishing opportunities. It notes that the UK has demonstrated a much greater commitment to getting the balance right than other Member States, and praises the decommissioning that has taken place in Scotland.

INITIATION OF EU LEGISLATION

33. Sub-Committee E conducted an inquiry into the initiation of EU legislation including the sources of ideas for legislation and the processes through which ideas are developed into formal proposals for legislation. The Sub-Committee's report was published on 24 July 2008. The conclusions supported the Commission's right of initiative, concluded that the present arrangements involve an appropriate balancing of interests between European institutions, but encouraged the Commission to take account of national as well as international stakeholders, encouraged the development of a strong common law profile within and in relation to the Commission, recommended that lobbying be transparently regulated, and urged that consideration be given to the creation of a cadre of specialist legislative drafters within the Commission.

FRONTEX

34. Sub-Committee F carried out an inquiry into Frontex, the European external borders agency. The Committee's report, published on 5 March 2008, called on the Government and the Schengen nations to take steps to ensure that the United Kingdom participates more fully in the development and operations of Frontex. The report recognises that while full Schengen States take the view that freedom of movement within the EU should take priority over border security, the United Kingdom's position in taking the opposite view is undermined by the need to improve the way its borders are at present safeguarded. The Committee argue that the highest priority should be given to remedying this, but see no reason for the Government to alter its decision not to opt in to the Schengen agreement.

35. The Committee believes that Frontex, whose tasks, staff and budget have doubled in each year of its existence, should be allowed a period of consolidation of its current tasks. Frontex should not, at least for the present, acquire its own operational assets, and Member States should not pledge vessels and other operational assets unless they are able to make them available on request. The Committee also believe that a fairer way must be found of calculating and granting financial assistance to those States which, like Malta, bear a disproportionate share of the burden of illegal immigration.

EUROPEAN POLICE OFFICE (EUROPOL)

36. Sub-Committee F has recently completed an inquiry into Europol which is the body responsible for supporting the Member States in combating serious and organised international crime. It was originally set up by a Convention between Member States, but agreement was reached at the Justice and Home Affairs Council on 18 April 2008 to establish Europol as an Agency of the EU. The Decision will extend the mandate of Europol to criminal conduct which is not strictly related to organised crime. The Sub-Committee's inquiry was therefore timely in examining Europol's current role and operating environment and how these will change under the new legal framework.

37. In its report, which was published on 12 November 2008, the Sub-Committee are concerned that four-fifths of the information exchanged by liaison officers stationed at Europol is exchanged without going through Europol or being entered on its database, and so without being accessible to the majority of Member States. This is due to a lack of trust, and the Committee make suggestions as to how this might be improved. The Sub-Committee welcome the fact that Europol's work is now based on Organised Crime Threat Assessments, planning for future threats rather than reacting to past events. However, it is particularly critical of the management structure of Europol which is complex and cumbersome, and which the Decision does little to improve.

PROTECTING THE CONSUMERS OF TIMESHARE PRODUCTS

38. Sub-Committee G conducted an inquiry into the Commission's proposals for a new directive which would give consumers of timeshare and related holiday products greater contractual rights. The aim of the directive was to protect consumers from the consequences of unsolicited approaches by sellers, some of which may involve misleading information and aggressive sales techniques. The report was published on 18 December 2007 and provides a thorough analysis of issues raised by the directive. The report was well received by both the European Parliament and the Government who indicated that it was useful in taking forward the UK's negotiations on the new Directive which is now scheduled for adoption by the Council of Ministers in December 2008.

ORGAN DONATION

39. Sub-Committee G then conducted an inquiry into the merit of the Commission's proposals for action aimed at increasing the supply of donor organs across the EU. It looked at the current state of organ transplant provision in the UK and other European countries and concluded that the directive would assist in improving provision in the EU. The report was published on 2 July 2008. The report also stressed that any directive should include significant flexibility to allow scope for clinical judgement and patient choice: for a patient who requires an urgent organ transplant to avoid imminent death, the clinical criteria for judging the acceptable quality of an organ will be different from those for a patient who can afford to wait longer for a transplant. The Committee has received a number of favourable responses to the report including from the Department of Health taskforce studying organ donation issues.

One-off Hearings

40. While the bulk of our inquiries are conducted by the Sub-Committees the Select Committee has a more general role which includes hearing oral evidence on the outcome of each European Council and the priorities for each EU Presidency.

41. Over the past year we heard from Jim Murphy MP, the then Minister for Europe, on 15 January, 25 March and 15 July on the outcome of the December, March and June European Council Meetings.

42. We also routinely hear evidence from the Ambassador to the UK of the incoming Presidency of the EU. His Excellency Mr Iztok Mirošic gave evidence to the Committee on the priorities of the Slovenian Presidency on 29 January 2008 and His Excellency Mr Maurice Gourdault-Montagne set out the priorities of the French Presidency on 10 June 2008.

43. Sub-Committee C also holds regular one-off hearings on various aspects of foreign and defence policy. For example, over the past year the Sub-Committee heard from the Minister for Europe on recent developments in European foreign policy on 23 January and 3 July, and from MoD officials on European defence policy on 26 June.

44. The Committee has published reports on all of these evidence sessions.

Working with the European Commission

45. In September 2006 the Commission launched the "Barroso Initiative" which commits the Commission to improving its consultation with national parliaments on all Communications and proposals. National parliaments are now encouraged to submit opinions, to which the Commission has undertaken to respond where appropriate.

46. The Commission's 2007 Annual Report on its relations with national parliaments states that "In 2007 the Commission's new approach to strengthening its relations with national parliaments made significant progress."[3] During the period November 2006 to December 2007 the Commission received 168 opinions regarding 82 Commission texts from 27 national Parliaments in 19 Member States. Of these 168 opinions 18 were from the House of Lords.

47. During the period of this report we submitted 9 reports to the Commission for a response and these are listed in Table 2. In our 2006 and 2007 Annual Reports we welcomed the "Barroso Initiative" and once again we wish to emphasise our support for continuing to develop the relationship between national parliaments and the Commission.

TABLE 2

Reports sent to the Commission

Report title	Sent to the Commission	Response received
Protecting the consumers of timeshare products	December 2007	March 2008
The Single Market: Wallflower or Dancing Partner? Inquiry into the European Commission's Review of the Single Market	February 2008	Awaited
Frontex: the EU external borders agency	March 2008	October 2008
The Future of the Common Agricultural Policy	March 2008	June 2008
Increasing the supply of donor organs within the European Union	July 2008	October 2008
The Progress of the Common Fisheries Policy	July 2008	October 2008
The Commission's Annual Policy Strategy for 2009	July 2008	Awaited
Initiation of EU Legislation	July 2008	Awaited
The EU's Target for Renewable Energy: 20% by 2020	October 2008	Awaited