European Public Prosecutor’s Office (EUC Report)

Baroness Smith of Basildon Excerpts

Thursday 19th March 2015 Lords Chamber

[Baroness Smith of Basildon (Lab)]

My Lords, to return to the committee report, I thank my noble friend Lady Corston and her committee. I was also grateful for her introduction to the debate. She was extremely helpful in her narrative about the twists and turns, and the ongoing debate on this issue. It was of benefit to the House to hear about the frustrations that her committee had in dealing with some of these issues.

Other noble Lords who took part in our previous debate on this issue on 28 October 2013 will recall that the report that we then discussed and the scrutiny that the committee had provided were invaluable in the understanding and analysis of what a European public prosecutor’s office could do and was intended to do. That position remains the same. I thank my noble friend and her colleagues on the committee, including the noble Baroness, Lady O’Loan, for providing what for me, having not considered this in great detail before, is a clear and detailed report.

There are important issues, but although the premise may be very straightforward, there are complexities and differences of opinion on how they can best be tackled, which cannot be lightly dismissed or ignored because they are genuine and justified concerns. As my noble friend Lady Corston pointed out, it is not a new proposal. The idea had been discussed even before the Commission’s proposals in the 2001 Green Paper, particularly in discussions on the Nice treaty. At that time, an outline proposal was debated but then abandoned though lack of support. Concerns were expressed and discussed then. They are still being discussed and concerns remain, which have not been addressed, about the relationship between an EPPO, Eurojust and OLAF, the European Anti-Fraud Office. The European Scrutiny Committee in the other place reported that a body such as the EPPO was,

“unnecessary, particularly given the existence of Eurojust”.

Our committee took evidence from experts of exactly the same view.

It is not the first time that this has been raised and it is not the first time that it has been debated in your Lordships’ House; it is the second report of the EU Committee. However, despite the criticisms of the proposed mechanism, the issues that the proposal seeks to address are very serious. That is why the deficiencies in the proposals are so disappointing and so serious. This is not an issue that has been plucked out of thin air; it seeks to address a very genuine and serious problem. The level of fraud against the EU budget must be taken extremely seriously and action has to be taken to address it. When we last discussed the issue, the Commission estimated the level of fraud at around €5 million in each of the previous five years. That is money taken from British taxpayers. Not only do we need to take action against those responsible and bring them to justice, it is very clear that far more preventive work and action must be undertaken.

The ongoing debate is not on whether we should tackle fraud, or assess whether we are tackling it or how best to tackle it, but on whether the proposal that has been put forward for the European Public Prosecutor’s Office is the best way to deal with the problem and to bring those responsible to justice. As this report highlights and analyses, there is also the question of whether the Commission recognises the concerns that have been raised and why they were not addressed in the revised proposals. As we said, the proposals previously presented clearly breached the subsidiarity principle, and the national level approach supported by existing EU mechanisms was far more appropriate.

It was therefore unfortunate and unhelpful that, as the report makes clear, despite the response of a number of national parliaments expressing their concerns and despite the Commission being forced to review the proposals in December 2013, the Commission decided not to make any amendments but to continue with the proposal as originally intended. The noble Baroness, Lady O’Loan, referred to it as a cursory review; I think that that is a correct assessment. As a result, 14 reasoned opinions were issued by national parliaments, which clearly makes the case that there are widespread concerns across the EU—we are not the only country with such concerns and reservations. Then we had the position where, seeking compromise, the Greek presidency issued an alternative text—but that is not supported by the Commission.

So where are we now? The conclusions and recommendations of the EU Committee are not based, as we have seen so often with debates on EU legislation, on whether the committee is pro-European Union or anti-European Union. I mention that because it sometimes characterises debates. We heard earlier from the noble Lord, Lord Pearson—and whether someone is pro-EU or anti-EU can colour their judgment on anything brought forward. When we had that farce of the opt out, opt in again debates on policing and criminal justice measures, it was very clear that the Government’s position was highly political, rather than a pragmatic, principled position in the interests of tackling crime across the European Union.

I have to return to this—I know that the Minister will groan with frustration as I do—but I have never, ever had an answer from the Government to my question about the practical impact or the operational value of those EU crime and policing measures that the Government have opted out of. I suspect that their answer is that there is very little: surely no Government want to get rid of EU-wide measures that are effective in tackling crime. Either the measures that the UK has opted out of had a practical and operational effect, or it was just a political stunt. I suspect that it was the latter.

That is where the committee’s report is so useful, both for your Lordships’ consideration in this debate and for wider consideration. I hope that the Minister recognises that it is also helpful to the Government. I saw the Government’s response rather late in the day in an undated letter to the noble Lord, Lord Boswell. I do not know when the letter was sent; I was able to get a copy only today. I certainly would have appreciated a copy of that letter much sooner for today’s debate than collecting it from the Printed Paper Office earlier.

I come back to the central point about this report: it is factual, well informed and principled. I think that the frustration of the committee in looking at these issues comes across very loud and clear. On this occasion, it is frustration—I have to say—not with the UK Government but with what appears to be, and I put it politely, some intransigence on the part of the Commission. All of us need to understand how serious the issue of EU fraud and financial crime is. Being critical of the proposals put forward in no way detracts from our wish to tackle these issues or from our understanding of how serious it is. The proposals and recommendations of the committee seek, first, to address some of the problems that have arisen from the Commission’s proposals, and, secondly, to suggest how the UK could take a lead and play a key role in seeking to ensure that those issues are addressed.

It should also be recognised that the political landscape has changed—as my noble friend Lady Corston observed—in the way that these matters are considered. Any new proposal such as this would now be subject to a referendum and legislation if its adoption by the UK were to be recommended—although that is not currently the case and it seems unlikely that it will be so. What is so disappointing is that the Commission’s position does not appear to have changed and it does not appear to be designed to try to gain as much support as possible for an EU-wide body or EU-wide co-operation around the core principles and actions of tackling crime. Had the Commission wanted to garner greater support, and if it was serious about ensuring that this was workable and that other nations would sign up to it, it would have amended the proposals and had more discussions. That frustration comes through in the report. There is no doubt that tackling any cross-border crime, including—or perhaps especially—EU fraud, benefits from EU-wide co-operation.

The objections outlined in this report cannot be lightly dismissed and I was pleased to read the Government’s response. The objections deserve far greater consideration by the Commission. On the issues that were highlighted—exclusive competence and workload—evidence was given to the committee that a new body such as the EPPO would collapse under the weight of the work it was provided with. The impact on Eurojust and OLAF is important, not just in principle, but in pragmatic, operational terms: how a new body such as the EPPO could possibly be effective in practice. It seems that all those who gave evidence for the report said that the complications of such a body would make it even more difficult to prosecute than it would be without the body: first, because it would collapse under the weight of the work, and, secondly, because of its relationship with the other bodies.

It is worrying—as the report and the Home Secretary’s evidence highlighted—that the lack of attention to the impact on non-participating member states creates an unacceptable level of risk that has to be addressed. When this proposal was first discussed, it was on the basis that all member states would sign up to it; that is clearly not the case, so the issue about those member states that do not sign up to it has to be properly considered. We had a similar debate on the National Crime Agency not applying to Northern Ireland, and we see it in this debate on a far wider scale; it is clear that they have not properly looked at this issue. My noble friend Lady Corston warned that the UK could be placed at risk by being, in effect, a safe haven for illegally obtained EU funds. That is why this issue has to be considered.

I do not want to repeat the detail of the report. It is an excellent report, and it does this House a great service to be able to consider such reports. The committee’s recommendations are useful and seek to find some way forward. The Government’s response—in the time that I have had to look at it—is positive, but this is a debate that will continue for weeks, months and, I suspect, possibly for years. We often say that a committee’s report is a valuable contribution to a debate, but in this case it goes far wider than that. This report is essential reading for any Government who have to deal with this matter. I look forward to the Minister’s response.