Examination of Witnesses (Questions 60
- 79)
TUESDAY 27 NOVEMBER 2007
Mr David Heathcoat-Amory, Lord Leach of Fairford
and Mr Neil O'Brien
Q60 Chairman:
But does not the text make clear that states remain entirely free
to conclude international agreements provided they are compatible
with the agreements signed by the EU or within the EU's competence?
So what you are saying is that if that is the case, then there
may be occasions on which Britain may want to sign an agreement
which is not compatible with one it has already signed which was
agreed to by unanimity within the EU? It would seem a rather strange
case to imagine.
Mr Heathcoat-Amory: Occasionally I want to make
agreements which are incompatible with other people's views. I
think this is the definition of freedom. Also, I instanced Article
3, which clearly gives the Union exclusive competence in international
agreements. That does mean that we can therefore only have agreements
if the European Union collectively agrees that we should. I think
this is quite a big restriction on what is or should be an independent,
free national policy.
Q61 Lord Roper:
With respect, Article 3 is not referring to CFSP matters; it is
referring to matters which at the moment are the responsibilities
of the Community rather than of the Union. That is therefore presumably
only a codification of what is the practice at the moment.
Mr Heathcoat-Amory: Yes. I am using foreign
policy in its very general sense to include all international
agreements because, after all, it could easily be said that in
matters of climate change, it is a feature of our foreign policy
that we do or do not sign Kyoto style agreements. I do not wish
our policy in that matter to be exclusively conducted through
a policy which by definition we do not control.
Chairman: I think that has brought us well into
the question of on competences. Maybe we can explore this a bit
further.
Q62 Lord Kerr of Kinlochard:
One of the bits that has certainly survived from the Constitutional
Treaty, and from the Convention, is the articles making explicit
the principle of conferral and classifying into three categories
the various forms of competence. This was not particularly popular
with all members of the Convention at the time: indeed it was
sharply attacked by what we might call the federalist wing of
the Convention. Is it one survival from the Constitutional Treaty
which you, Mr Heathcoat-Amory, are still happy to see, or have
you gone off it?
Mr Heathcoat-Amory: My Lord Chairman, I defer
to Lord Kerr's knowledge of a lot of this because he wrote the
Constitutional Treaty of course, but on the matter of division
of competences, I have never myself asserted that we have a federal
system which is comparable or similar to, say, the American system.
I always thought it was particularly bizarre when President Giscard
likened himself to Thomas Jefferson. The systems are entirely
different, except perhaps in this, that there was an attempt in
the Constitutional Treaty, which is carried forward into the Reform
Treaty, to divide and distinguish competences or, to use an English
word, powers. That could be useful, which is why it is in essence
constitutional, but in my view it fails because the division is
really entirely on the terms of the European Union. To give an
example, there is a very long list in the Treaty of shared competences.
I did not welcome this because the definition of shared competences
is that when the European Union legislates over one of them, the
Member States lose their power to legislate in that area. So it
is not a shared competence; it is rather that Member States will
have a residual competence and that is not a welcome development.
Q63 Lord Kerr of Kinlochard:
Forgive me, it is not exactly in that area that the position is
clarified? To the extent that the Union has legislated, the Member
States have agreed that they will on that specific subject and
to that specific extent not pass laws in conflict with those of
the Union, but in the rest of that area the competence will remain
shared.
Mr Heathcoat-Amory: I hope that Lord Kerr is
right on that. Referring to the text, it says: the Member States
shall exercise their competence to the extent that the Union has
not exercised its competence. The definition of "competence"
seems to me to be very broad because the list of competences does
not refer to individual legislation or directives but to areas
as broad as internal market, social policy, economic social and
territorial cohesion, environment, transport and energy.
Q64 Lord Kerr of Kinlochard:
With respect, does that not prove my point? Nobody is saying that
the United Kingdom cannot pass social policy legislation because
the EU has for some time had a competence in social legislation.
Mr O'Brien: One of the practical uses of this
division of competence is going to be in court cases, and the
problem is it is going to be for the European Court of Justice
to decide on these things. I think overall the whole issue of
the division of competence is a good example of how good intentions
at Laeken went bad. We wanted a division of competences in the
UK in order to prevent competence creep but the way in which the
sharing of competences has actually worked out was a long way
out of line with the UK Government's view of what the existing
position is. As you will remember, during the European Convention,
the UK Government made 12 separate unsuccessful attempts to change
or delete elements of these Articles. For example, it complained
that competition law is not an exclusive competence. It asked
for various of the other shared competences to become national
competences. It also objected to the fundamental structure. The
UK tried to delete the whole idea of shared competences because
they are potentially in the future more trouble than they are
worth in court. If you think about court cases in the future,
like the Environmental Crimes ruling from October 2005, where
the scope of the European Union Commission's ability to pass criminal
laws is now really only determined by a view of where its competences
are, it will be up to the court to decide what its competences
are. It now has this whole ream of text, four sides of A4, explaining
in very vague terms it will be for it to interpret what these
competences are, and also the division of competences is set out
in a way with which the UK fundamentally does not agree. Will
these Articles have no effect whatsoever? I do not believe that
they will not. I believe that these Article will increasingly
be used by the Court of Justice in making quite contentious legal
rulings. It is certainly clear to me that these Articles have
been drawn up in a way in which the UK Government did not like.
Q65 Lord Kerr of Kinlochard:
I was just going to ask Mr O'Brien if he has noticed the principle
of conferral, which makes it absolutely explicit that where powers
are not conferred on the Union, they remain with the Member States?
This of course was always the case, always implicit, but now explicit.
That principle will apply in what he is describing as an extremely
dangerous grey area. I do not see the danger. And it seems to
me the area is less grey because it is clearly defined, in that
new classification, as an area where the powers of the Union are
applied only to the extent that the Member States decide that
they should be, on each of these listed subjects.
Mr O'Brien: All I can really say in answer to
that is that you may believe that but the UK Government certainly
did not believe that, and it objected and found the idea of these
shared competences dangerous.
Chairman: It seems we have a difference
of opinion on various shades of grey.
Q66 Lord Sewel:
I am just seeking to clarify Mr Heatcoat-Amory's position on shared
competences. Do I take it that what you are saying is that your
proposition is that say in social policy, if the EU decided to
exercise its competence in the area of social policy on a minor
inconsequential matter of policy, then the effect of that would
be that Member States would lose all competence to act in the
area of social policy?
Mr Heathcoat-Amory: Whether there is all competence
in the area remains to be seen but certainly reading the text
as it is, it does say that, "Member States shall exercise
their competence to the extent that the Union has not exercised
its competence".[1]
The word "competence" is very general. I would understand
if the rules said that in a specific area if the Union had passed
a law, you obviously cannot have a Member State passing incompatible
laws—that is obviously sensible and longstanding—but
I think this goes substantially further by reserving for the Union
a wider area, they call it a competence. If you look at the definition
of "competence", it is very, very wide, and the list
here of 11 policy areas is not exclusive; it only says "in
the following principal areas". There may be very wide areas
of policy making which could be reserved for the Union if they
moved into that area. Of course, we do not know; we are in the
hands, as Mr O'Brien has said, of future judicial decision, but
I think it is very dangerous in a document that is supposed to
bring certainty and clarity. We are saying to the people we represent,
"Here is a document that removes the ambiguities. There will
be no more mission creep. This will show exactly who does what",
but in my view it does not because the ambiguities and the apparently
wide areas could be reserved for Union activity in the future,
in addition of course to the list of exclusive competences which
themselves go rather wider than the status quo. We know, for instance,
that the British Government objected to the inclusion of competition
rules as an exclusive competence, but it is in the text.
Q67 Chairman:
I notice that you have not referred to Protocol 8 when it was
introduced at the insistence of the Czechs, which reads in relation
to exercising shared competences: When the EU carries out an action
in a certain area, the scope of its competence covers only the
elements governed by the Act in question and does not therefore
cover the whole domain. That would seem to clarify it.
Mr O'Brien: I think the problem with what the
Czechs have got there is really just re-stating the problem because
the idea of the area is not defined there in any way. The European
Court of Justice has a very clear view on the Council acting within
the scope of community law, and that includes things like derogating
from Community law. So once again because the idea of area is
ill-defined even in the new Czech thing, we still have the problem
that it is up to the Court to decide on the limits of competence,
so we have the problem of who guards the guards.
Chairman: I take a rather different view, I
am afraid. I think the Czech Protocol is very clear, that it makes
a clear distinction between the Act in question and not covering
the whole domain.
Lord Mance: I am going to ask whether
the Lugano opinion in relation to civil jurisdiction and judgements
was relevant in this connection. That is where the European Court
said that because the Community had reached inside Europe a comprehensive
scheme regulating civil jurisdictional judgments that external
jurisdiction was a matter for the exclusive competence of the
Community because there was an impact, one could argue I think
quite a small impact, in a few areas on the internal scheme. So
that individual states did not have a right to take part in negotiations.
That might be an area where I could see a problem arising, once
you got a scheme and then, if there is some small cross-relevance
with a proposed external scheme, nonetheless it is exclusively
a matter for the Community.
Chairman: Thank you very much. Lord Wade, would
you indulge me: I think that we have probably covered competences.
Lord Wade of Chorlton: I was going to suggest
exactly the same thing, my Lord Chairman. I think we have taken
this matter as far as we can.
Q68 Chairman:
We may proceed to the changes relating to the European Council
and the rather problematic relationship between the President
of the European Council and the presidency in the Council of Ministers.
Would one of you three like to tell us what your thoughts are
on that?
Mr Heathcoat-Amory: I will start off on the
European Council. It is given an enhanced status. Indeed, it becomes
a formal institution of the Union and it is in the Treaty that
it will meet four times a year. It does do that already although
it is only required to meet twice. It is given particular powers
to lay down the general landscape of a Union foreign and security
policy, but there has been no change in the Treaty to its working
methods. I think this is a problem which goes back to what I said
earlier about the opaque nature of European Union decision making.
The European Council, the Heads of Government meeting together,
publish no minutes. There is no published agenda. There are only
conclusions published. It is not certain quite who draws them
up. They are certainly not available to outsiders to scrutinise
beforehand but they have in many cases a quasi legal status. Also
of course the deliberations themselves are largely secretive.
So you have the main supreme decision-making body making important
decisions in private. I think this operates against transparency.
We saw this in the 21 June European Council, which I mentioned,
which effectively settled the text of the Reform Treaty only two
days after the text was available. I think it really shows the
weakness of process. That is all unreformed in the so-called Reform
Treaty. As regards the Permanent President, it is often said this
will bring continuity and cohesion to decision making but I think
myself maybe at the expense again of public involvement. At least
when the presidency circulates amongst Member States, it does
occasionally come back to home. The decision making is literally
brought closer to the citizen and for six months at least it exercises
the attention of the national media and public of the country
concerned. I think all that will go if the permanent European
President becomes yet another full-time official in Brussels,
rather remote, bigger and more powerful. In my view that will
actually create a bigger gap between the EU and its citizens,
in contradiction indeed of the instructions given in the Laeken
Declaration.
Q69 Chairman:
You do not think that the fact that the Council Presidency with
the exception of foreign affairs issues will be managed by predetermined
groups from three Member States for a period of 18 months will
not do something to help the public understand what is going on?
Presumably within their defined areas they will have something
to say?
Mr O'Brien: I think this is yet another example
of one of these areas in the Treaty where what exactly is going
to happen is not clear, which I think is one of the problems with
the Treaty. Many of the new institutions, for example the European
External Action Service, are not properly defined in the Treaty.
It is not quite clear what their powers or executive responsibilities
are going to be. For example, will the new President of the Council
be running 3,500 civil servants in the Secretariat of the Council?
How is the President of the European Council going to be interacting
with all these different team presidencies? I would agree with
what Mr Heathcoat-Amory said before about how having an elected
President does fundamentally change the nature of the legislative
process in Brussels because instead of having a national leader
with an obvious vested interest in the rights of Member States,
you have yet another independent, free-floating Brussels institution
interested in getting things done in Brussels, passing more legislation.
The two other open questions I think are: firstly, the failure
of the UK Government exclusively to rule out the merger of the
Council President with the Commission President in the future.
Until very near to the last draft of the Constitution, this was
ruled out but at the last minute exclusive separation was dropped.
That is something with which the UK Government was not happy but
decided to put up with it. The second question I think is the
future of this institution, because we are setting up something
now which is quite a federalist idea in itself, the idea of having
an independent President. But of course it is going to develop
in the future. It will gradually increase its powers and responsibilities.
Various people, including Nicolas Sarkozy, have suggested that
the EU President should eventually be directly elected. So we
have to think if we are going to sign up to this Treaty about
really where this institution is going to go in the long run.
Q70 Chairman:
Is it usual to insert in a treaty the ruling out of something
that does not exist in the first place?
Mr O'Brien: It is certainly something the Government
wanted to happen. If it is something that we do not want to happen
in the future, then we should explicitly rule it out now.
Q71 Lord Sewel:
Having dealt with the President of the Council, let us move on
to the impact of the Treaty and the role and function of the Council
of Ministers generally and specifically in terms of the new system
of qualified majority voting (double majority). Do you think that
is likely really to be of significance in practice and what will
the effect of the declaration document be on blocking minorities?
Basically: how do you feel the Council and the Council of Ministers
has been impacted?
Mr O'Brien: I think that the new voting system
is one of the most significant things in the Treaty. When people
talk about streamlining the European Union, what they mean is
allowing it to pass even more legislation more easily, so that
on the one hand you have lots of new moves to qualified majority
voting in new areas, between 50 and 60, depending on how you read
it, and of course you have the new voting system, which makes
it considerably easier to pass legislation and considerably harder
to form a blocking minority. I do not think that that point is
contentious. Even the Foreign Office has acknowledged that it
would be harder to block legislation that we disagree with. Even
groups that would not agree with me, like the Centre for European
Reform or Business for New Europe, have acknowledged that it will
be harder in the future to block legislation that we do not want.
A fundamental question is: do we think that the EU needs to pass
even more legislation than it does at the present? I personally
do not believe for an instant that the European Union is grinding
to a halt with the current number of Member States. In fact, there
is a very good study from Sciences Po academics which shows that
the EU is actually passing legislation about 25% faster since
the 2004 Enlargement. I do not think we need more legislation.
If you look at the practical consequences, they are very obvious.
In areas where the UK Government is currently assembling a blocking
minority to block various things it does not like, whether that
be the Working Time Directive and moves to restrict the individual
opt-out, be it the Agency Workers Directive, or various of the
pieces of the Financial Services Action Programme where the UK
Government has relied on a small blocking minority to stop things
we do not want, our position in all these areas is going to be
jeopardised under the new voting system because it will be much
harder for us to block legislation. There is a study for example
by Felsenthal and Machover on the voting system which suggests
that our ability to block legislation will be cut by about 30%
compared to the current rules. This is quite a big change and
it will have important practical consequences.
Q72 Lord Sewel:
Your emphasis is very much in terms of our ability to stop things.
What about our ability to get things that we want?
Mr O'Brien: I completely acknowledge that this
means that more things will pass. The question from a business
point of view is: do you believe that there should be more regulations
being passed or less? If you look at the opinion polls, there
is a recent poll of one thousand chief executives in the UK which
found that 54% thought that the cost of new regulations from the
EU now outweigh the benefits of the Single Market, which is quite
a striking and frightening finding. If you want even more EU legislation,
then this Treaty is a good idea. If you are cautious about that,
then this Treaty is perhaps not such a good idea.
Q73 Lord Kerr of Kinlochard:
Do we agree that there should be a correlation between population
and voting weight, or do you think that basically we should go
back to unanimity and that Luxembourg or Malta should have equal
weight with Britain and Germany?
Mr O'Brien: Certainly I am very sceptical about
the further extension of qualified majority voting.
Q74 Lord Kerr of Kinlochard:
I am asking about the double majority system in the Treaty, which
brings a correlation for the first time between population and
voting power. Is that what you object to?
Mr O'Brien: I think what I object to is the
overall ease of passing legislation rather than the distribution
of power within the different Member States.
Q75 Lord Kerr of Kinlochard:
So your objection is to the threshold numbers. If they were high
enough, if one needed to have 100%, you would have no objection;
perhaps at 99 you might just about agree, but 65% and 55% are
too low? Is that right?
Mr O'Brien: I would not necessarily insist on
100% 100% of the time.
Lord Leach of Fairford: I think it is hard to
object to the principle of recognising population in the voting
system. Personally, I accept that. I think it is itself a move
in the direction of greater democracy. You see in the American
system that both concepts are reflected in their structure. I
do not think that is at all undesirable. It is a question of where
you strike the thresholds and how you deal with this flood of
legislation which, as Mr O'Brien has said, is very serious. Gunter
Verheugen has estimated the costs of legislation in the European
Union are greater than that of the entire Dutch economy's GDP.
That is an awful burden to bear when you are trying to compete
with China and India. For example, when you look at the Financial
Services Action Programme, that is very expensive.
Q76 Lord Kerr of Kinlochard:
One could argue that the Single Market broadly is a good thing
and the Single Market would not have happened but for Mrs Thatcher's
decision on the extension of qualified majority voting. There
is nothing intrinsically wrong with being in a position where
you prefer to get things done. If you want to break down the barriers
and make a more open Europe, I would have thought it was quite
a good thing to have qualified majority voting.
Lord Leach of Fairford: I think we will be here
long after midnight if we were to discuss the Stuttgart Declaration
and Mrs Thatcher and how the whole thing arose. I think there
were profound misunderstandings about how it would develop between
mutual recognition and harmonisation. Unless the Lord Chairman
wants us to get into that, I think it would be a very interesting
exercise in history.
Q77 Lord Kerr of Kinlochard:
Do I interpret that, Lord Leach, to mean you are actually against
the Single Market, you think the Single Market programme has been
a mistake?
Lord Leach of Fairford: Of course not. What
a question! To be against the Single Market to the extent that
it brings greater freedom to trade, I think it would be bizarre
to be against that, particularly with our open market philosophy,
but there are different ways in which free trade can be consummated.
One is by mutual recognition and by all the elements of a free
trade area; the other is by harmonisation of a heavily regulated
system. I do not think this was foreseen, as I understand it,
in 1983 by Mrs Thatcher. That in fact was the way it went. The
poll that Mr O'Brien refers to indicates that business is shocked
by the degree of legislation which has come about through harmonisation,
which is bringing about the Single Market, with its good elements
you referred to, through a mechanism that is rather self-defeating
because of the very heavy burden of legislation or regulation.
Chairman: I would like to move on to the double-hatted
post of High Representative.
Q78 Lord Roper:
I wonder if you would like to comment on to the post referred
to sometimes as double hatted but perhaps treble hatted because
in fact the High Representative will also chair the Foreign Affairs
Council in future. I wonder how you see that working.
Mr Heathcoat-Amory: Perhaps I can start. By
any standards, the new post will be substantially more powerful
than the present equivalent, who is a Council representative.
He or she will "conduct" foreign policy; that is a new
verb in the Treaty. They will be able to draw on the resources
of the External Action Service. It is not clear exactly what that
service will do. It is only sketchily described in the Treaty,
but it is clearly intended to be an embryo foreign service for
the European Union itself and could become very powerful. I think
it is the double hatting that is particular controversial and
of course that worried the British Government very much during
the Convention which invented the post. I think one has to say
that it is bound to undermine to some degree the inter-governmental
nature of decision making. The British Government is adamant that
they have preserved the inter-governmental system in the new Treaty.
I have to say that is difficult, I think, to sustain, when the
man/woman conducting the policy is also going to be not just a
member but a Vice President of the Commission. The Commission
of course has a culture and working methods that are supra-national,
and indeed its members are forbidden by Treaty law from taking
instruction or being influenced by national governments. Having
one foot firmly in that camp I think must mean that the purity
of inter-governmentalism will be changed. It will be something
of an oddity having a Commissioner permanently chairing the Foreign
Affairs Council. We do not know exactly how this will work out.
Indeed, a lot of it is in the hands of future personalities and
events. So it is very difficult to predict. Certainly it is a
compromise. I do not believe that the pillared structure which
we have lived with since Maastricht can survive a High Representative
who is clearly straddling the two institutions.
Q79 Lord Roper:
Will it not give some greater coherence to the external actions?
You were speaking earlier of the external activities on from the
policy of the Union does not only comprise those things which
are in CFSP but the other areas as well. Will this not ensure
that there is greater coherence between those external relations
aspects of the Commission's work and the inter-governmental work
of the formal CFSP?
Mr Heathcoat-Amory: I think there is incoherence
in the Commission itself at the minute between the Commissioners,
four of whom have duties that touch on external policy—things
like foreign aid and humanitarian relief. I would be more impressed
by the reforming nature of the Treaty if informally and without
a treaty that had been dealt with more impressively. So I am in
favour of the informal working reform as a predecessor to setting
up institutional structures which could become very inflexible
and could bind us into a system that we may regret. Coherence
is a thing that politicians like, but I think that the public
are equally concerned about things like accountability, democracy,
transparency. I am not clear that the structure we have invented
here by eroding intergovernmentalism will give more comfort to
critics of the European Union who believe that it is racing ahead
with an institutional structure which is going far beyond the
political will for co-operation. I strongly believe in working
with other countries to achieve results. I do not believe that
setting up powerful institutions is a substitute for the political
will and success on the ground. For instance over the Iraq war,
there was a terrible disagreement in Europe which would not have
been solved, in fact I think could have been worse, if we had
pretended that we had a foreign policy and a foreign policy activist
and someone conducting it when there was no policy for him to
conduct. He would be more like an impresario than a High Representative.
Unless we solve those problems of working together in Europe,
I do not think the institution is going to solve them; it may
even create them.
1 Note by the Witness:Article 2(2) TFEU. Back
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