European Public Prosecutor’s Office

Lord Beith Excerpts

Tuesday 22nd October 2013 Commons Chamber

[The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)]

I beg to move,

That this House considers that the Draft Regulation on the establishment of a European Public Prosecutor’s Office (EPPO) (European Union Document No. 12558/13 and Addenda 1 and 2) does not comply with the principle of subsidiarity, for the reasons set out in the annex to Chapter One of the Fifteenth Report of the European Scrutiny Committee (HC 83-xv); and, in accordance with Article 6 of Protocol (No. 2) annexed to the EU Treaties on the application of the principle of subsidiarity and proportionality, instructs the Clerk of the House to forward this reasoned opinion to the Presidents of the European Institutions.

It is a pleasure, Madam Deputy Speaker, to see you in your place for this debate and to serve under your chairmanship this evening.

In July the European Commission published a proposal for the establishment of a European public prosecutor’s office—an EPPO. It is the Commission’s answer to a problem known as

“fraud against the Union’s financial interests”.

The EPPO proposal was published alongside a parallel legislative measure to reform the existing EU agency, Eurojust. These two proposals, the EPPO and Eurojust, will together be the subject of a separate debate in a week’s time as part of the so-called Lidington arrangements. I look forward to it, following my letters to the Chairs of the relevant Committees yesterday with the Government’s recommendation that the UK should not opt in to the new Eurojust proposal at the outset of negotiations, but should actively consider its position following a thorough review of the final agreed text.

The purpose of the debate is specifically for the House to decide whether the Commission’s EPPO proposal breaches the principle of subsidiarity, and that is what we should focus on tonight. I recognise that I am in an unusual position tonight in moving a motion on a course of action to be taken by the House, not the Government. I am aware, too, that the issue of who should move a motion in a subsidiarity debate such as this is a matter that the Procedure Committee has examined and on which the Government have responded. Although there may be differences of view over the procedure, I hope we can agree on the substance of the debate.

It is the shared view of both the European Scrutiny Committee and the Government that the EPPO proposal does indeed breach the principle of subsidiarity. If the whole House agrees, it can, under the EU treaties, send a democratic and political signal to the presidents of the European Commission, Council and Parliament in the form of a reasoned opinion to that effect. Moreover, in this case, if one quarter of the votes allocated to national Parliaments are cast, the so-called yellow card would be triggered meaning that the Commission would be obliged to review its proposal.

To update the House on how matters stand, both chambers of the Dutch Parliament, the Hungarian National Assembly and the Czech Senate have already taken this step, and others are actively considering it. This is a real opportunity for all national Parliaments to exercise, as democratic representatives, their views on what the Commission has proposed.

Before I say more about the reasoned opinion process, let me summarise the Government’s view on the EPPO proposal. The House will be aware of our long-standing position in the coalition agreement not to participate in the establishment of any EPPO, and the details of the proposal serve only to reinforce that position. While of course fraud must be tackled at all levels, including when it involves funds that form part of the EU budget, we do not agree that the establishment of a European public prosecutor’s office is the right approach.

The Commission’s proposal would establish a new supranational EU body with responsibility for criminal offences affecting the financial interests of the Union, as well as so-called ancillary offences within participating member states. The EPPO would exercise the function of a prosecutor within the courts of the participating member states for these offences and instruct their national authorities over the conduct of investigations.

This proposal is unnecessary, unsubstantiated and unwelcome. In the Government’s view, the best way to tackle EU fraud is through prevention. The UK has a zero-tolerance approach to fraud, with robust management controls and payment systems in place that seek to prevent incidences of EU fraud. Additionally we should continue efforts already happening to strengthen the current system.

For example, reforms to the European Anti-Fraud Office—OLAF—are currently being introduced to improve information exchange between OLAF and national authorities, and to improve OLAF’s own internal quality control. Indeed, a new regulation governing the work of OLAF entered into force only on 1 October 2013. These changes need time to be implemented fully before any further action is contemplated. Against that background, one of the many criticisms we have of the EPPO proposal is that the subsidiarity principle has not been met.

Without getting into too much technicality and legalese, the principle of subsidiarity means that decisions should be taken as closely as possible to the citizens whom they affect, and that the European Union should act only when outcomes can be better achieved at European Union level. It is important to note that subsidiarity is different from the principle of proportionality, under which any action taken by the European Union should not exceed what is necessary to achieve the stated objectives.

Under the protocol on the application of the principles of subsidiarity and proportionality in the treaties, the Commission must demonstrate that the objectives of the proposal cannot be sufficiently achieved at member state level—the first limb of the test—and then, that the objectives of the proposal can be better achieved at EU-level by reason of their scale and effects, which is the second limb and so-called EU added-value test. There is a requirement for the Commission to include a detailed statement in all legislative proposals on compliance with the principles of subsidiarity and proportionality, and some assessment of its financial impact. This detailed statement should be

“substantiated by qualitative and, wherever possible, quantitative indicators”.

In the Government’s view, the Commission has not presented a convincing case, and we do not believe that the principle of subsidiarity has been met. The Commission has not allowed time for current reforms to take effect, nor has it adequately considered options to strengthen the current system. For example, it has not considered enhanced incentives or other options for reform at regional or national level in any detail or in a rigorous manner, and it has not demonstrated what value an EPPO would add. We should recall that the relevant legal base in the treaties—article 86 of the treaty on the functioning of the European Union—says that an EPPO “may” be established. The treaties do not say it “shall” be created. The Commission has not, in our view, provided robust evidence to justify the creation of a supranational body with extensive and harmonised powers.

As I have said, under the treaties national Parliaments have the opportunity to put forward a reasoned opinion when they do not consider that a proposal complies with the principle of subsidiarity.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

As the Minister has just made a point about harmonised powers, may I remind him that one of the consequences of giving the EPPO the power to direct investigations would be to create a power for prosecutors that does not currently exist in England and Wales, although it does in Scotland? That perhaps illustrates the level of change that would be required to satisfy the idea of having a public prosecutor at European level.

[James Brokenshire]

I am grateful to my right hon. Friend, the Chair of the Select Committee on Justice, for highlighting the seriousness and significance of the European Commission’s proposal and why, in our view, it is not appropriate for the United Kingdom to opt in to the measure. As I have indicated, we made that abundantly clear in the coalition agreement in advance of the proposals being published. I am sure that we will examine in detail the impact of the Commission’s published measure in our debate next week on the in-principle decision as to whether the UK should opt in. That is the right avenue for exploring the detailed issues, whereas today is about subsidiarity. However, I take his points seriously.

Although there have been a number of reasoned opinions since the opportunity to provide them came into effect, there has only been one occasion on which the yellow card threshold has been reached. That was on a Commission proposal about the posting of workers and the right to take collective action, also known as Monti II. In that case, the Commission withdrew the proposal fully, even though it maintained that the principle of subsidiarity had been met. It conceded on the grounds that it was clear that there was no political will among member states and national Parliaments to take the proposal forward.

The Monti II case highlights the fact that the continuing use of the reasoned opinion procedure and resulting yellow cards represents a powerful political signal and an important way for national Parliaments to intervene directly in the EU’s functioning. Even when the yellow card threshold has not been met, the views of national Parliaments have been influential on a wide range of issues, as member states have used reasoned opinions to support their negotiating positions. They have often secured amendments on the salient issues on the back of them.

Achieving the threshold requires a great deal of co-ordination between national Parliaments. I am sure the European Scrutiny Committee and other interested parties in Parliament, in both this House and the other place, are making best use of their contacts with other national Parliaments in that regard. I look forward to hearing the debate and urge the House to support this important motion.

--- Later in debate ---

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

I would like to join the hon. Member for Luton North (Kelvin Hopkins) in giving credit where credit is due. This debate is taking place on the basis of the report and reasoned opinion of the European Scrutiny Committee. The Government agree with that reasoned opinion, but it is very much that of the Committee. In my capacity as Chairman of the Liaison Committee and the Justice Committee, I think that the European Scrutiny Committee is entitled to the credit. If there is something wrong with our procedure, it is that it does not fully recognise that process. However, the outcome is a happy one because pretty well everybody agrees that the reasoned opinion is correct, and it accords with the Government’s view.

The proposal for a European public prosecutor offends against the subsidiarity principle. One of its primary objectives is to strengthen the protection of the European Union’s financial interests. That is a perfectly reasonable objective to pursue, but it does not have to be achieved through the creation of a European public prosecutor. Indeed, it would not necessarily be best achieved in that way. The other limb of the general argument in favour of the European public prosecutor is that it is a further development of the area of justice. That provides the hint that subsidiarity is in danger of going out the window.

There are many ways in which the European Union could improve the way in which it deals with fraud. If national Governments fail to take the actions that they should take, they should be shamed into doing so. We also have to be a little careful about using percentage figures on the success of prosecutions. There is considerable danger if anybody thinks that the target of a justice system is to have 100% success in prosecutions. Courts will sometimes find people not guilty because the evidence has not been brought forward or sustained. The 100% target is a rather dangerous principle to import into this debate.

It is often pointed out that the European Union could do a lot more to resist fraud if it designed its schemes and its disbursement of money in ways that lent themselves to fraud a great deal less. Nothing is fraud-proof, but schemes can be designed that are less susceptible to fraud than many of those that have been developed over the years by European institutions.

Many elements of the proposal offend against subsidiarity. The European public prosecutor would have investigative powers, search and seizure powers, and interception and surveillance powers. To have those powers in operation at a supranational level would be a pretty significant change.

The proposal would take away the role of the Director of Public Prosecutions in prosecuting decisions in matters relating to EU fraud. It would have a similar effect on the roles of the procurator fiscal and the Lord Advocate in Scotland. The proposal would ignore the deliberate separation of decisions on investigation from decisions to prosecute in England and Wales, which is a long-standing element of our system. We can argue about whether that barrier should be retained, but we should have that argument in the context of our legal system and not allow it to be forced on us by the introduction of the European public prosecutor.

I am convinced that in the minds of some people, the creation of a European public prosecutor is a route to a prosecution role that goes wider than EU finances. I am not always tempted by slippery slope or Trojan horse arguments, but some of the same people have advanced the case for a prosecutor to deal with EU finances and a wider role for such an office.

[Kelvin Hopkins]

The right hon. Gentleman must accept that there has been constitution creep for decades in the European Union. Surely that is what we are trying to stop.

[Sir Alan Beith]

There have also been many advances in the way in which European nations use the European Union to achieve highly desirable objectives, such as through co-operating to deal with international crime. An intrinsic problem with the way in which the European Union was constructed, which is quite understandable given the way in which it was constructed, is that there is a belief in the Commission that the way forward is always to create further powers and jurisdictions. We have created a system that has that element within it. However, those who worry about Britain’s membership of the European Union have a tendency to underestimate the benefits and the value that have been achieved through many of its processes.

My hon. Friend the Member for Cheltenham (Martin Horwood) pointed out that there is a close relationship between this proposal and the issue of Eurojust. Unhelpfully, it would compromise the acceptability of Eurojust to many people if the European public prosecutor was located within Eurojust. There are other aspects of interrelationship between the two issues. I regard Eurojust as an extremely valuable institution that has many processes that are of great advantage to British citizens. It has an important role in the prevention and detection of crime against British citizens and British interests. But again, even within the Eurojust proposals that we will be looking at again shortly, the role of the national members of Eurojust in the Commission’s proposal to order investigative measures changes the relationship between law enforcement and prosecution that is so firmly a part of our system.

There is, of course, another feature of the proposals that I am glad has not attracted the attendance of some of my hon. Friends on the Conservative Benches: if we went ahead with it, it would trigger a referendum. That might make it attractive to them to vote against the motion tonight, or whenever we have a deferred Division. I should not really tell them this, because it might inflame them in a way that I do not want. Basically, I think we all agree that establishing a European public prosecutor’s office is not the direction in which we ought to go and that it offends the principle of subsidiarity, as is extremely cogently argued in detail by the European Scrutiny Committee.