Remuneration of EU Staff

Lord Jackson of Peterborough Excerpts

Tuesday 21st February 2012 Commons Chamber

[Cathy Jamieson]

The hon. Gentleman makes a useful point that I will address in greater detail later.

Being somewhat older than the Minister, I can recall the days when the so-called Eurocrats were high on the hit list of public anger, as salaries and conditions in European institutions were perceived to be far more generous than those enjoyed at home. Some of the most highly paid officials might be relieved that they are no longer the focus of that anger as bankers and others have taken over. However, the subject of EU salaries and pensions remains important. As the European Scrutiny Committee has highlighted, it is clear that this subject needs greater clarity and resolution. As we have heard, the Commission took the Council to the Court over EU salaries and pensions in 2009, and only last month it announced its intention to do so again. In advance of today’s debate, I asked the House of Commons Library about the costs involved in the last case. I was told:

“There is no straightforward way of getting a figure for the costs borne by the Council in Case C-40/10.”

I was also told that the Library had attempted to obtain information, but the Court had said that

“replying would be a massive undertaking that will require all sorts of cost allocation analyses (within the Commission’s legal service and the European Court of Justice), at great expense to European taxpayers”.

The Court might be unable to tell us exactly how much that wrangling cost, but it is clear that any legal fight will have come at great expense to the taxpayer. The questions that taxpayers will no doubt ask is whether that ping-pong between the Commission and the Council is really the best way to resolve such matters, and I was pleased to hear the Minister refer to that. However, taxpayers will want to know exactly what the Government have done in the past year to push for reform so that we are not faced with this annual tit for tat and ongoing uncertainty.

The second area of major concern for the European Scrutiny Committee was the Commission’s decision not to provide for an alternative salary adjustment in its 2011 report and the basis on which that decision was taken. Members of the Scrutiny Committee amplified their concerns in the conclusions of their report of 2 November by describing the assessment required of the Commission in considering the exception clause as appearing to be a one-sided exercise.

There are different opinions on Europe across the political parties, and indeed within them, but there is one thing that I am sure we can agree on: times are now tough across Europe. GDP fell throughout Europe at the end of the previous quarter, unemployment in the eurozone is at a record high and we continue to face uncertainty surrounding the eurozone crisis. In reality, apart from those at the very top, people in work in both the public and private sectors are already experiencing those tough times, and families are bearing the brunt. Every day we hear that small business are struggling, and they consistently report that they cannot get the finance that they need or, indeed, previously had. It is becoming harder and harder for people to buy their first home, with the deposits required now out of reach for many young people starting out in family life.

Yet, despite that wider economic climate, the Commission did not deem the general economic outlook in Europe to be an “extraordinary situation” as defined by the European Court of Justice. Try to explain that to the low-paid couple who are set to lose about £4,000 in working tax credits when they hear that a highly paid official could gain an extra £4,000 under the proposals.

If we are not in an extraordinary economic situation, what would make for one? We have to question why it is deemed correct to ask hundreds of thousands of public sector workers in the UK and throughout Europe to take the hit and to face a cap in their pay and an uncertain future, while no similar restraint is shown by the EU institutions.

Another part of the problem is that, owing to the structure of the current arrangement, annual adjustments are implemented across the board irrespective of salary levels, meaning that a high earner who is already on £200,000 will receive thousands of pounds more under the proposals.

The Opposition have made it clear that financial discipline in the public and private sector must be accompanied by fairness, and in terms of salary scales, just as at home, we must be tougher on those at the top to help protect those at the bottom. Have the Government made representations on that point during any part of the negotiations?

I agree with the European Scrutiny Committee that the process smacks of being one-sided, and it could be argued that the Commission’s conclusion that we do not face extraordinary times has made a mockery of the exception clause, so urgent reform is clearly needed.

That brings me to my next point, and the Committee’s third area of concern: the Government’s action and representations on the issue. We hear a lot from the Government, as we have again today, about them taking a tough position on EU administrative expenditure and wanting to see real budgetary restraint in the EU over the coming years. They spell that out in their memorandum on the subject, and they go on to express dissatisfaction with the substance and procedure of the salary and pension adjustment proposals, making the point that the formal proposals were first circulated only on 24 November 2011 but required Council approval by the end of the year.

Again today, although we have heard a great deal about the facts of the situation, we have not heard in detail how the Government intend that tough position to manifest itself, or who exactly they are going to be tough on. The fear and worry for many will be that this is just another example of talk but not necessarily action on Europe by the Government, so I should like to hear from the Minister how the Government expect to take the lead in talks on reform at a time when the UK’s political capital in Europe is at its lowest in a generation.

In recent months we have seen how the Prime Minister’s actions have left Britain somewhat isolated in Europe, because leading up to last December’s summit he did not appear to put any real effort into alliance building.

[Mr Stewart Jackson (Peterborough) (Con)]

The hon. Lady’s argument would gain more conviction were it not for the record of the Government whom she supported, because those issues, particularly the structural issues in terms of the European Union institutions, did not begin in May 2010. Does she think that the process she supports was improved by a previous Prime Minister giving away a huge rebate?

[Cathy Jamieson]

I have listened closely to the hon. Gentleman, but his party is now in government and it has to take responsibility for what has happened in the past year. I absolutely understand that past decisions have implications for the issue before us, but I want to focus on where we go in the future and what this Government have done in the past year. My concern is that, apart from trips to Berlin and Paris, for example, neither the Prime Minister nor the Foreign Secretary travelled to the EU’s capitals before they went to Brussels. Britain was singled out for criticism by the Foreign Minister of Poland, a country that was one of our potential allies. If we want to change things in Europe, surely we must build alliances rather than destroy them.

--- Later in debate ---

[Cathy Jamieson]

If the hon. Gentleman had been listening carefully, he would have realised that I am saying nothing of the sort. I am saying that in an era when we have to compete in a global economy, we must ensure that our voice is heard. We therefore have to take our seat at whatever table there is to put the interests of the UK forward. Where we have shared goals, such as in climate change negotiations, tackling cross-border crime and dealing with human trafficking, working together surely makes global agreements more likely. We need a mature and positive approach to Europe from the Government.

[Mr Stewart Jackson]

Will the hon. Lady give way?

[Cathy Jamieson]

I am almost finished, but I will take an intervention on that point.

[Mr Jackson]

The hon. Lady is being very generous. I am rather confused by her position. Can we infer from her comments that if the Leader of the Opposition had been Prime Minister on 9 December 2011 he would have signed the treaty, or would he have followed the lead of the Prime Minister and vetoed it?

[Cathy Jamieson]

The hon. Gentleman will have heard the Leader of the Labour party say on numerous occasions that he would not have walked out of the negotiations. There was no treaty on the table at that time.

I want to move on, because this point is important. As I have said, we need a mature and positive approach to Europe from the Government. When we get the opportunity to work on a cross-party basis, we should do so. We should engage in Europe and build alliances so that when important issues come up, such as those that we are debating, we have credibility and influence among our European neighbours.

--- Later in debate ---

[Kelvin Hopkins]

This may be a light-hearted comment, but it always strikes me that people I have known who have gone to work in the European Union come back with a rather fuller figure than when they went. I may be wrong, but that is the impression I get. They are certainly loyal to their new organisation.

[Mr Stewart Jackson]

I pay tribute to the hon. Gentleman for consistently being right on this subject. Does he think it is rather perverse and insidious that one of the caveats attached to someone being awarded a pension by these European institutions is that they are specifically proscribed from criticising those organisations? Perhaps that is something that the Deputy Prime Minister takes on board on a regular basis.

[Kelvin Hopkins]

It is a feature of all authoritarian regimes that they cannot bear criticism, particularly from the inside. In a healthy democracy, we should accept challenges from time to time. If we are governing, it is very useful to have people telling us that perhaps we have not got it right. Even at my modest level as a Member of Parliament, I like my staff to tell me when I have got something wrong. I do not sack them; I say “I thank you for your comments, and I’ve got to think about this.” Occasionally they put me right, and sometimes I am right, but debate of that kind is always healthy in a democracy. It is anti-democratic to sack somebody simply for disagreeing or criticising. In the end, we always do things by debating and voting, one hopes, with openness and transparency.

I have a story from a few years ago. Someone I knew who was involved in Brussels arrangements drifted into a meeting unexpectedly and found senior officials discussing among themselves whom they wanted to get into the post of Social Affairs Commissioner. They openly said, “We don’t want Social Affairs to be effective because it is only there as a decoration to get trade unionists and socialists on side, so we want somebody weak and ineffectual. Who shall we have?” Eventually they found an innocuous, sufficiently weak commissioner from one of the minor eastern European countries—I will not mention the name—to make sure that the post was not effective. The person sat in the room astonished at what was going on. The officials were deciding who the commissioner was going to be, and of course it transpired that that is who it was.

That is how the European Union operates. It is very anti-democratic, secretive and closed. We cannot get a verbatim report, or any kind of report, of what goes on in the Council of Ministers. When the European Council meets, a decision is made by officials before it meets. People talk for a couple of hours in the meeting, and they come out and the decision is adopted. It has been drafted beforehand and is invariably accepted, because that is the way things work. Let us not pretend that we are involved in some thrusting, democratic organisation—it is a bureaucratic structure where people are expected to fall into line.

I would enter a caveat for low-paid staff in any organisation—cleaners, security officers, people who work in the restaurants, and so on, who should have trade unions representing them to make sure that they have reasonable pay. We are talking about the highly paid officials who are part of the slush fund of the European Union and are clearly looking after themselves, with those who believe in this organisation being prepared to turn a blind eye to their vast salaries because they want to secure their loyalty for the foreseeable future. The whole structure needs to be opened up so that we have proper democratic controls at every level.

If the European Union is serious about reducing administrative costs, the way to achieve that is to cut out some of the things that it does. For example, there would be a substantial reduction in administrative costs if we got rid of the common fisheries policy and abandoned the common agricultural policy, as we should. We have talked about the repatriation of regional policy. If Governments decided what was appropriate for their regions, moneys would not be sent directly to our regions by Brussels, but would come through our Governments. If those unnecessary activities were repatriated, the administrative costs of the EU would be dramatically reduced and it would be a much more acceptable organisation.

I support the motion and commend the hon. Member for Stone (Mr Cash), the Chair of the Committee, for bringing it to the House.