Examination of Witnesses (Questions 220
- 238)
THURSDAY 13 DECEMBER 2007
Sir Stephen Wall GCMG LVO
Q220 Lord Plumb:
Do you think by giving the Parliament more responsibility, I am
not talking about powers but responsibility, that will not make
it more determined to come to decisions which they know are going
to be more binding at the end of the day? What I am really saying
is you can talk forever and you can come up with conclusions,
but perhaps at the end of it know very well those conclusions
are not going to function anyway. If what they are coming up with
they know is going to actually happen, will they not be more responsible,
is really what I am saying?
Sir Stephen Wall: Yes. You get different views
on the operation of codecision obviously, and I have not been
directly involved in it for three years now, but it seems to me
that when codecision was introduced, the fears of people who thought
that this would actually lead the European Parliament to have
too much power vis-a"-vis the other institutions,
that has not actually happened. There is a tough process of negotiation
between Council and Parliament; some deals are done at first reading,
more are not done at first reading, and in many cases, there is
a difficult conciliation process, but I think the British Government's
experience by and large has been that this process has led to,
on the whole, acceptable outcomes. Coming back to the issue we
talked about earlier, namely the balance of expenditure within
the budget, I do believe that over time, the fact that the European
Parliament itself will share responsibility for making those choices
is likely to get a balance of expenditure which more closely reflects
the balance of public interest and political interest across the
union.
Q221 Lord Sewel:
Can I briefly put the point to you, and really, it is a point
we heard in evidence at an earlier session, I do not think this
is being unfair: it was claimed that codecision-making in the
areas of agriculture and fisheries would be bad for reform, the
prospect of reform in those areas, because it merely strengthens
the protectionist forces in Europe.
Sir Stephen Wall: It seems to
me that the—I am not saying that this is an area where the
victory is won, and if one reads President Sarkozy's speeches
on agriculture, you can see them pointing in different directions,
but it does seem to me that the trend of policy in the European
Union has been away from that. The pressures that are exerted
now on the European Union in the trade area, for example, external
trade, the stance that we have to take in WTO negotiations is
pushing us in a direction away from traditional protectionism.
I think it is hard to see over time that a policy where the European
Parliament has to take responsibility for expenditure will lead
to that Parliament trying to take decisions which kind of fly
in the face of what is going on in the countries from which the
MEPs come. Agriculture in France is politically still very significant,
but its economic significance has diminished enormously; the same
is true of Germany; the same, I think, will be true of those new
Member States who at the moment have very significant agricultural
sectors. It just does not seem to me plausible to think that in
a system where members of the European Parliament are directly
elected, that that will not filter through.
Q222 Lord Dykes:
Sir Stephen, what specific impact would you yourself possibly
envisage for the European Commission, in terms of its role, functioning
and membership, from these treaty proposals?
Sir Stephen Wall: Well, I think there are two
significant issues: one is the new measures on the way that the
Commission is actually appointed and approved by the European
Parliament, and I think that in particular as regards the President
of the Commission, there will be a closer linkage between the
outcome of European Parliament elections and the character of
the person who is chosen as President of the European Commission.
I think the smaller size of the Commission will be a good thing.
It is something which successive British governments have argued
for, from Margaret Thatcher onwards, and not in her case simply
because she did not much like it, but because she actually thought
that in terms of their responsibilities, it was more effective
to have a smaller European Commission. I do not want to exaggerate
the point, but it does seem to me that if you have 27 countries
each with a Commissioner, the danger of those commissioners being
seen to be the national representative in Brussels—and in
my experience, I know of one or two Member States who have been
fairly open in saying, "We are a small country, we do not
have a big bureaucracy, we rely on our Commissioner to defend
the national interest", and that is not what the system is
designed to be. So I actually think that a smaller Commission
will have greater regard for their duties as Commissioners with
responsibility for the interests of the Union as a whole. I am
not saying that there is no potential cost from the fact that
there may not be a British Commissioner at certain points, but
equally, I think successive British Commissioners have actually
taken their responsibilities to the Commission, as opposed to
the Government from which they came, rather seriously. So I do
not myself see that there is a significant British interest that
will be lost if on occasion there is not a British Commissioner.
I think if you look at recent history, nobody, including me, and
I know that I was at odds with Lord Kerr on this point, but he
was right and I was wrong, but not many people thought when Pascal
Lamy, a Frenchman, was made Commissioner for External Trade, that
he would pursue the kind of policies that he did, which were actually
ones that we fully supported. If you thought about the idea of
an Italian being Competition Commissioner, you might have had
the same prejudices, but Mario Monti was an extremely good Competition
Commissioner. So I think it is possible to kind of be overinfluenced
by our national prejudices on this and actually the reality can
be rather different.
Q223 Lord Dykes:
Do you feel that might be—if people were saying, well, eventually
the Commission will come to the end of a big phase of single market
legislation and so on, and in fact people say that has been reached
already, or other people equally say it will go on for much longer
than you think, but do you think there might be two phases, the
Reform Treaty timing, if it is ratified by the Member States,
it would be good from that point of view of having got through
the final creation of all the single market aspects, and the Commission
goes on to being a much more interesting body?
Sir Stephen Wall: I think there is still some
way to go on aspects of financial services, and in particular
the general Services Directive that we have is not, I hope, the
end of the story. The whole area of energy liberalisation is clearly
one where the Commission are taking action, both in terms of legislation
on energy unbundling and also in terms of using their powers under
the competition rules to enforce opening of the market. I think
there are areas of energy policy, both internally, in terms of
the creation of a grid, and externally, in terms of the management
of our relations with third countries, where there is scope for
further development. I think the European Commission themselves
are very much focused now not just on—and perhaps rather
more than on new legislation, focused on implementation and enforcement,
and I think in the single market, including the financial services
area, that is absolutely critical, because certainly the faith
of the business community in the single market depends upon it
being seen to be implemented rigorously. The Commission are very
conscious of that, and suffer, because none of the Member States
is very willing to give them the wherewithal by which to do it.
So insofar as there is a shift away in the single market area
from lots of new legislation towards implementation and enforcement,
that might be a good thing.
Q224 Chairman:
Is there a likelihood that in future, under this new arrangement,
the President of the Commission will in effect always be the candidate
of the largest political group in the Parliament?
Sir Stephen Wall: I think that is certainly—given
that there has to be agreement between the Council and the Parliament
on the candidate, and he has to be approved by the European Parliament,
I think there is probably going to be greater regard for political
balance as well as geographical balance across these key jobs
than perhaps there has been in the past, yes. But I do not think
it will just apply to the President of the Commission.
Q225 Chairman:
Thank you. Moving on, could we come to the Court of Justice for
a moment? We had Sir David Edward here recently giving evidence,
and if my memory serves correctly, he identified at least four
areas in which the jurisdiction of the Court would be somewhat
extended. I am just wondering whether you have views on whether
or not this is desirable; and secondly, maybe you would like to
comment on the Charter of Fundamental Rights and what the European
Court might make of it.
Sir Stephen Wall: Again, as I understand it,
the most significant area in which the European Court will now
have an increased role is clearly in the area of justice and home
affairs. I think the European Union as a whole has decided that
it wants, for reasons of efficiency, to go in the direction of
using the traditional Community procedures, including a role for
the European Court of Justice. Clearly that presents issues for
the British Government, because in terms of decisions which the
Government takes to opt in or not, they will have to factor in
the possibility of the Court making judgments on issues that affect
our national law. I think it is difficult to say at this point
whether that will be an inhibition on us in deciding to opt in
or not. It is certainly a factor that they will weigh in their
minds, because of the particular arrangements we have on justice
and home affairs, that will impact on us in a political sense.
As regards the Charter of Fundamental Rights, I thought myself,
having lived a lot with this, that the safeguards that were secured
at the time of the Constitutional Treaty were strong legal safeguards;
that was certainly the view of the then Attorney General. It seems
to me that what has now been obtained in terms of the protocol
makes it absolutely clear. I know there are people who say, "Well,
if a case were brought before the UK courts, the UK courts would
be almost bound to refer it to the ECJ and then you are off to
the races"; I am not a lawyer, but if you look at Articles
1 and 2 of the Protocol, they seem to me to be so starkly and
unequivocally worded that the European Court would have to say
that black is white to be able to make a determination that actually
affected the laws of the UK in the areas which concern us. Certainly,
in the organisation which I am involved with, Business for New
Europe, our members were concerned to have certainty on that point,
but our members, and we have about a third of the FTSE 100 companies
as members, are satisfied with the result that has been obtained.
Q226 Lord Wade of Chorlton:
I think you will probably agree with me that one of the concerns
in Britain is about the role of the European Court of Justice,
and its impact upon what people see as certain issues; do you
think as a result of these changes those concerns are likely to
be greater or lesser?
Sir Stephen Wall: I do not think they change
much. I think there is sort of a view in the UK that the European
Court is a kind of constructionist court that wants to advance
the frontiers of European competence. I do not think that the
history of the Court for the last 10 or 15 years bears that out.
It seems to me that the European Court takes a rather rigorous
legal view; even in areas where, for example, over healthcare,
where it has interpreted single market rules in a way that have
extended the scope of healthcare provision across the European
Union, I do not think the British Government's lawyers dispute
the legal grounds on which the European Court did that. There
have been recent cases where the European Court—I mean,
for example, on British health and safety legislation, when our
rule of "insofar as is reasonably possible", which is
a traditional British formula, was challenged by the European
Commission, the European Court found in favour of the British
Government rather than the European Commission. So I do think
this is an area where the reality is a bit different from the
perception, and I do not see any reason for this to change, except
insofar as if the British Government opts into JHA areas, in doing
so, they will have had to assess what they think are the risks
if that particular bit of legislation were to find its way before
the European Court of Justice in due course.
Q227 Chairman:
Given that Article 51 of the Charter states very clearly that
the provisions of this Charter are addressed to the institutions,
bodies and agencies and officers of those agencies, do you think
that this is not sufficiently understood?
Sir Stephen Wall: Yes. When I was still involved
in these things, we had quite a lot of difficulty in getting that
point across, because on the one hand, we have those provisions
which I think are legally watertight. On the other hand, you have
something which started as a political document and has become
a legal document, which is why the question is not whether it
is a legal document, but in what terms is it a legal document,
which is where Article 51 and other articles come into play. As
I say, I do think that Articles 1 and 2 of the Protocol, which
as you know have equally binding legal force with the substantive
articles, if you doubted what is already there, those protections
are absolutely explicit.
Q228 Lord Harrison:
Sir Stephen, Eurosceptics suggest that the new powers given to
national parliaments by the Reform Treaty are nugatory. Is that
your view? If they are substantial, as I believe, how do you think
national parliaments should frame their responses to proposed
legislation; in particular our Parliament, and in particular,
our House? Perhaps I could just tack on to the end, because you
are a representative of Business for New Europe, do you think
added confidence will go to the business people of the United
Kingdom, who are often poor at communicating to their MEPs or
to us, do you think they will be given new confidence, or will
it be a delusion, the knowledge that national parliaments may
be able to play a more influential role in determining the European
decisions?
Sir Stephen Wall: I think it should be a source
of confidence. Obviously, it is up to the business community and
organisations like Business for New Europe, if there are issues
which really affect our members' interests, to get their views
and present them coherently and rapidly. Obviously I am not competent
to judge what organisational changes would need to be made both
here and in the House of Commons, but my perception, when I was
a civil servant, and dealing with the scrutiny process, particularly
dealing with the scrutiny process when Parliament was in recess,
is that it creates a hiatus in the system, and decisions in Brussels
cannot always wait on the Parliamentary timetable. So I guess
what has to happen is that Parliament has to organise itself to
be able to determine significant issues quickly, and then to reach
a view quickly. I understand all the problems that that entails,
given recesses and other things, because although the timescale
is now extended under this Treaty, compared with the Constitutional
Treaty, it is still a fairly tight timetable. I guess also, although
it is not essential, if you are actually going to get the biggest
impact, it requires more coherence and co-ordination between national
parliaments, where they may have similar concerns and want to
express a similar view. COSAC has been the traditional vehicle
for Parliamentary co-ordination, but whether that can be adapted
for this particular purpose, I just do not know.
Q229 Lord Harrison:
If I may, I will return to the Eurosceptics who got very excited
about the passerelles and the simplified revision procedure. Do
you think that leaves the United Kingdom vulnerable to being obliged
to do things it does not want to do, or do you think it actually
fosters better decision-making procedure?
Sir Stephen Wall: You could demand that we have
in every case the whole intergovernmental conference process,
or as I saw Lord Owen suggest, I think, in the Sunday Times, we
should have primary legislation in each case, but it seems to
me, in terms of the preservation of the political interests of
the United Kingdom and the power of Parliament, to have both a
unanimity provision and, as our Government have said, that there
will be no use of the passerelle without the positive approval
of Parliament, that seems to me to be a pretty strong democratic
safeguard. Nobody can get round that. The argument that somehow
you will come under such pressure that you will give ground, does
not seem to me to bear much relationship to the practice of successive
British governments in their dealings with our partners. None
of our partners thinks we are a pushover, as you know.
Chairman: Lord Dykes, did you want to
come in?
Q230 Lord Dykes:
Very quickly, Lord Chairman, thank you. On the more human aspects,
I remember vividly for two and a half years being a member of
the unelected Parliament in the early 1970s, and the antagonism
between national parliaments, particularly the British one and
the European Parliament, was immense. Do you think that has substantially
disappeared and diminished everywhere, including Britain?
Sir Stephen Wall: Yes. I think our own arrangements
are less than that of some of our partners. That is obviously
a matter for this Parliament to decide whether it wants to do
more, particularly in terms of having more interchange and dialogue
with the committees of the European Parliament, where they are
dealing with issues which are of concern to this Parliament. Others
do do it differently; so far as I understand it, there has not
been the support for that here.
Q231 Lord Wade of Chorlton:
Under the new arrangements, the proposal is that the EU's commitment
to undistorted competition should come to a protocol, and I wonder
how significant you think that is, and what practical impact it
is likely to have, if any.
Sir Stephen Wall: When the news broke that the
provisions that had been in the Constitutional Treaty had been
changed, largely at the instigation of President Sarkozy, I think
that would have been worrying had the Commission themselves not
acted to get the protocol, and although optically obviously when
something is there and it is removed it is not great, in substantive
terms, that protocol recreates the protections that were there
under the previous treaty, so I think the substantive position
is no different. I have heard the relevant Director General of
the Commission, Philip Lowe, speak on this subject, and he is
confident that the powers are fully safeguarded by that protocol;
I believe that is the case, and I think there is no doubt about
the Commission's determination to use those powers.
Q232 Lord Wade of Chorlton:
Why did Sarkozy want to change it?
Sir Stephen Wall: That is a good question. The
benign interpretation is that I think he had a domestic difficulty,
and it was easier therefore to kind of slide things through, if
he could point in that direction. Whether there was a more nefarious
intent behind it, I do not know. But if there was, then I think
it has been negated by the protocol.
Q233 Lord Wade of Chorlton:
Are you confident about that?
Sir Stephen Wall: Yes, I think if he thought
he was gaining a point of substance, then I think he did not gain
that point of substance.
Q234 Lord Kerr of Kinlochard:
Is it not the case in addition that the words are not there in
the Treaty now in force, so he did not secure a deletion from
the current Treaty?
Sir Stephen Wall: Exactly.
Q235 Lord Kerr of Kinlochard:
They were in the draft Constitutional Treaty and they were in
the draft Reform Treaty and they have disappeared, but they have
not disappeared from the current Treaty, so nothing has changed.
Sir Stephen Wall: Yes, exactly.
Q236 Lord Dykes:
Page 6 of the Financial Times yesterday had a very senior official
of the Élysée calling for more flexibility and individual
policy formation and so on within the Commission framework. Do
you think there was any linkage between that utterance and this
matter we are discussing here?
Sir Stephen Wall: I do not know. There may have
been. My sense at the time was here was a President who was embarking
on some very difficult reforms at home, and he wanted a bit of
red meat, as it were, to fling to the people who were about to
be marching in the streets.
Q237 Lord Sewel:
It is the last question, but in a way, it could have been the
first question, it is really: which of the institutional changes
we have been discussing today do you think has most significance
for the United Kingdom?
Sir Stephen Wall: I do think that the changes
on justice and home affairs are the most significant, because
I think that those are the ones that will pose for us real policy
choices. It is absolutely right that we have not tried to thwart
our partners from doing what they feel they need to do for their
security, and it remains the case that we will want to, as we
have done in the past, opt into the vast majority of those provisions.
But the arrangements, as you know, where we do opt out, do involve
a rather kind of complicated formula which allows for the possibility
that we might be opted out of some of the wider areas in which
we have been opted in, because an individual opt-out can affect
the operation of those areas, so there can be difficult decisions
for Ministers to take. My own feeling on this is that we have
to be kind of honest with ourselves and have some means of assessment,
fairly consistently, and maybe even with reporting to Parliament
on a fairly regular basis. In a way, it is a bit like the argument
in the 1950s, where the economic argument pointed in favour of
joining the EC, but the sovereignty issues were too difficult,
and then the balance changed, because we saw that actually the
economic disadvantages of staying out were so great that we had
to swallow it, and this could be the same. We need to be rigorous
ourselves in assessing, after a certain period: would Britain's
national security be better if we were fully in the entire system
rather than having the opt-in/opt-out system? You will not be
able to properly make that judgment until you see a bit in practice
how it operates. I am not saying it will not be a difficult judgment
to make, because there are, as I understand it, potential areas
of harmonisation which would be easier for our partners than for
us. Again, as I understand it, most of our partners have a system
whereby the discovery of DNA evidence is not enough to allow a
second trial, whereas in our case, we do admit DNA evidence, and
indeed there have been recent examples of it. That seems to me
to be an area where there is quite a substantive issue involved,
which would be very difficult if we were required to change that.
So I do not think it is easy, but as I say, I do think it is one
that will need to be constantly assessed over the next five years
or so.
Q238 Chairman:
Can you envisage a situation in which, for example, one day we
may find ourselves having to decide whether to re-opt in to the
European arrest warrant, which so far has proved to be very useful
to us, but the decision might be taken that we cannot, because
then we put ourselves under the jurisdiction of the European Court.
Sir Stephen Wall: I think that is unlikely.
Obviously, I imagine there is a whole raft of existing legislation
that the Government will be looking at over the next five-year
transition period, to see how far our existing enactment of those
provisions is ECJ-proof, as it were, and that is a process which
obviously we have time to do. My sense of this, as an outsider,
but from talking to people, is that both ministers and officials
really are determined to operate the system for the best security
interests of the UK. As I say, I am not suggesting that the balance
between that on the one hand and the political and legal issues
on the other is an easy one, to which there is, you know, a simple
answer.
Chairman: Thank you. I think we have
come to the end of this very interesting session. You have answered
all our questions in a very satisfactory and informative manner,
Sir Stephen, for which we thank you very much indeed. This will
be most useful to our inquiry. Thank you again for giving us your
time.
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