Regulation of the European Parliament and of the Council on the Fund for European Aid to the Most Deprived: EUC Report

Lord Boswell of Aynho Excerpts

Thursday 13th December 2012 Grand Committee

Moved By

[Lord Boswell of Aynho]

That the Grand Committee takes note of the Report of the European Union Committee on the Commission proposal for a Regulation of the European Parliament and of the Council on the Fund for European Aid to the Most Deprived.

[Lord Boswell of Aynho]

My Lords, the intention is that after today’s debate a Motion will be moved in the Chamber on Monday inviting the House to agree that a formal reasoned opinion should be issued.

Our report concerns a proposal to create a European Union fund to provide aid to deprived people, which was examined by our Sub-Committee on the Internal Market, Infrastructure and Employment, chaired by the noble Baroness, Lady O’Cathain, whom I am delighted to see in her place today. Before I explain our thinking on this proposal, I will briefly explain the background because the committee has considered earlier versions of the policy twice before.

The European Union’s food distribution programme began as far back as 1987 as a way to make use of agricultural surpluses. As the report explains, in both 2010 and 2011 the committee considered proposals relating to the programme to distribute food products. On both occasions the committee suggested that the House should issue a reasoned opinion under the Lisbon treaty because the proposal was not consistent with the principle of subsidiarity—in other words, that this was something that was better done at member state or regional level—and that no compelling argument had been put forward that the European Union was better placed than member states to ensure a food supply to its most deprived citizens. Our view was not shared by a sufficient number of other national parliaments so no so-called “yellow cards” were triggered, which would have inhibited the scheme that the Commission had put forward in those years, and the current scheme was extended to the end of 2013.

The proposal before us today is to create a new “Fund for European Aid to the Most Deprived” to operate from 2014 to 2020 in order to address food deprivation, homelessness and the material deprivation of children. The proposed fund would support and co-finance national schemes to provide non-financial assistance to the most deprived persons. I make it clear that we share the Commission’s concerns about EU citizens suffering from deprivation, and that we recognise the very serious impact of the economic crisis. Our report, though, is about whether the European Commission’s proposal is the right way to respond to these important issues.

The Commission has provided little by way of justification that its proposal complies with the principle of subsidiarity. Our committee had to derive some indication of the Commission’s reasoning by looking at the accompanying impact assessment, which argues that European-level action is necessary because of,

“the level and nature of poverty and social exclusion in the Union, further aggravated by the economic crisis, and uncertainty about the ability of all member States to sustain social expenditure and investment at levels sufficient to ensure that social cohesion does not deteriorate further”.

After careful consideration, our committee concluded that such uncertainty could better be met by action through the existing European Union cohesion programmes, from which money would have to be diverted to fund this scheme, without burdening member states with the extra administrative obligations introduced by the proposal. The committee also concluded that the Commission had failed to put forward any convincing argument that the European Union was better placed than member states to undertake this role, and had therefore failed to justify its implied assertion that the proposal meets the principle of subsidiarity.

In summary, this is an issue of concern about process rather than one of substance. We are not seeking to deny that the substantial matter is important and of interest to all Governments—indeed, to all citizens, in our current economic difficulties—but the principle of subsidiarity is a powerful one. It should be complied with, and our view is that it has not been met on this occasion, hence our proposal to issue a reasoned opinion. I beg to move that the Grand Committee take note of the report.

[Lord McKenzie of Luton]

My Lords, I find myself, somewhat surprisingly, dealing with this for the Opposition, but I think it is because the Secretary of State for Work and Pensions has lead responsibility. I thank the noble Lord, Lord Boswell, for the very clear way in which he introduced the report and its recommendations.

The specific issue before us is the recommendation that support should be given to a reasoned opinion to the effect that the draft regulation does not comply with the principle of subsidiarity. As we have heard, a similar issue was considered two years ago and the same conclusion reached, although that proposed regulation was withdrawn after the European Court of Justice ruling that purchases from the market, rather than use from intervention stocks, could not be made under agricultural legislation. This generated an amended proposal a year ago on which the UK took the same position, although that did not, as we heard from the noble Lord, prevent the life of the scheme being extended until 2013.

The proposal considered by the committee was for a new fund for European aid to the most deprived with the fund to address food deprivation, homelessness and material deprivation of children. It would run from 2014 to 2020. It is different from the previous programme, which grew out a need to make use of the then agricultural surpluses. It has the three strands that have been outlined. It is understood that it did not propose any additional overall expenditure, but the cost, which would be some €2.5 billion, would be met from the proposed cohesion policy—structural funds—the budget total for which is some €339 billion, or less than 1% of the total. If adopted, it would to that small extent divert funds from the structural funds.

The Commission’s impact assessment sets out that the EU has the objective of reducing by at least 20 million the number of people at risk of poverty or social exclusion by 2020. However, it reports that poverty and social exclusion are rising in many countries. The explanatory note states that in 2010 nearly a quarter of Europeans were at risk of poverty or social exclusion, which was 2 million up on the previous year, with later figures confirming a worsening trend, and this at a time when the ability of member states to support the disadvantaged is in some cases diminishing. In our own country, we see a rise in homelessness and rough sleeping. The latter is up by 23% in the past year alone. According to the IFS, the number of materially deprived children is increasing, and we have the well publicised growth of food banks, and we are one of the richer countries in the EU.

Paragraph 11 of the committee’s report states that it considers that the uncertainty about cohesion can be met by action through existing EU cohesion programmes. I understand that point, but will the Minister—I am not sure whether I should be addressing the noble Lord, Lord Boswell, the Minister or perhaps both of them—expand a little on that belief? How does it address the comment made in the explanatory note that some of the most vulnerable citizens who suffer from extreme forms of poverty are too far removed from the labour market to benefit from the social inclusion measures of the ESF? Would it propose any changes to the ESF programme?

Will the noble Lord please explain whether there is something inherent in the nature of the expenditure proposed in the programme—food deprivation, homelessness and material deprivation of children— which makes this a social policy matter where member states must act on their own accord or does it depend on the ability in practice of member states to resource appropriate individual country programmes? If the latter, can we hear the evidence base for the assessment that each member state is in a position to do what is necessary for its own people? Indeed, is there any point or any scale of food deprivation, homelessness and materially deprived children where the committee would accept a role for such a fund and an EU dimension?

I do not ask these questions to be difficult, but to understand the routes to addressing this awful poverty. I think the noble Lord, Lord Boswell, made the point that this is not about the substance but about the mechanisms available to deal with it.

--- Later in debate ---

[Lord Boswell of Aynho]

My Lords, in responding briefly, I join the Minister in thanking all noble Lords who have participated in or attended this debate. I was not sure whether she was going to make a separate contribution but I thank the noble Baroness, Lady O’Cathain, and the members of her sub-committee for the detailed consideration that they gave to this matter, as they always do. We are grateful to them and to the staff of our committees when they look at it.

I also thank the noble Lord, Lord McKenzie. It is rather nice to be debating with him again, as it were, because I am very used to doing so in a social security context and he always asks very penetrating questions, but I did not anticipate finding myself in the position of necessarily having to respond to them. He has touched on one of what we might call the constitutional procedural issues, which is central to this debate, just as much as the real world issues about whether there is poverty and deprivation and how to meet it.

The position is that our committee can consider only those proposals emanating from the Commission that are actually received by the committee, and we will then form a judgment on them in relation to European Union legislation. We cannot, as the Government might be able to at certain stages, negotiate with the Commission or suggest alternatives; it is up to us to look at what it has produced. The central point about this debate on the procedural side is that it is entirely for the Commission to justify how a proposal that it is making at that time meets the principles of subsidiarity. It is the judgment of our committee that it failed to do that convincingly on this occasion—indeed, not for the first time but for the third.

If we begin to touch on some of the points of substance, it is interesting that all this had its genesis in a move to dispose of agricultural surpluses—nearly two and a half decades ago now—and yet it is now being presented as some kind of all-singing, all-dancing fund for the relief of deprivation and social hardship. I make no comment on that, other than to record it and then at least ask what is the best way of dealing with it. That, in a sense, is part of the argument about subsidiarity.

I bring two points to the attention of the Committee. First, the Commission’s proposal does not by itself help to evaluate the social problems of the most deprived in any particular member state, because those are logged, perceived and, to be honest, administered or dealt with at the levels of the national or even local government administrations within those member states. The Commission is not, as it were, adding value, because it is dependent on the member state producing the assessment.

There is an underlying issue there. I take the most extreme case, which we have seen on the television, of Greece—although it is of course not the only country in social difficulties and noble Lords have been quite right to refer to the difficulties in our own country; I am not denying those. If the implied suggestion of the Commission is that Greece has not got the money even to meet the extreme relief programmes because it has no money in its Treasury—or, possibly more sophisticatedly, it is dependent on some other member state donor or other putting it there—our argument would be that it would be more appropriate to consider a wider appraisal through the cohesion fund to see whether the money could be found rather than creating a special vehicle for this purpose. I think that somebody has the idea that a special vehicle is appropriate, but it is still our firm contention that that case has not been made. Rather, it is just moving money around and would of course cost more, as the Minister said in her remarks, to move that money around.

We all know that there is a social problem; it is hardly possible to overlook it. It is certainly a common view that we would be distressed by it. However, the Commission has to be aware, and the treaty requires us to be able to evaluate and come to our conclusions on, whether its proposals meet the obligation of subsidiarity. It remains our contention that they do not. In that spirit, I beg to move.

Motion agreed.