European Union Committee: 2012-13 (EUC Report)

Lord Kerr of Kinlochard Excerpts

Tuesday 30th July 2013 Lords Chamber

[Lord Kerr of Kinlochard]

My Lords, I started to take the reports of the Select Committee seriously 22 years ago. I discovered that I had to. I then lived in Brussels, and it was the habit of the then President of the Commission, Jacques Delors, to read House of Lords reports on Sunday afternoons. When he discovered something that he did not understand or did not like, it was his habit to telephone the permanent representative. I discovered that these conversations went slightly better if I had read the reports beforehand.

I was therefore delighted when I came here to have a spell on the Select Committee and on three sub-committees, and I now sit on Sub-Committee A under the polymathic chairmanship of the noble Lord, Lord Harrison, whose habit it is to greet witnesses from far and wide in their native tongue, to the consternation of his colleagues and, sometimes, the witnesses. He is an admirable chairman, as he has again displayed today in his speech.

The standard of the big reports from the Select Committee, which attracted a lot of admiration in Brussels 20 years ago, is undiminished. It is still very high. I think particularly of Bowness-Hannay on the Protocol 36 opt-out. Sub-Committee A’s MiFID II report was good, and I think that its report on the financial transaction tax hit on a point which, at that time, the Government had failed to or did not wish to recognise: that the obnoxious tax would cost us because we would have to collect it even if we did not ourselves go along with it.

The big reports are very good indeed. However, compared to 20 years ago, I think that the standard of everyday scrutiny of the legislative workload has diminished. It is not as good as it used to be. I think that the principal reason for that—the Minister may disagree with me but he will have heard the feeling of the House from the noble Lords, Lord Boswell, Lord Hannay, Lord Bowness, and Lord Judd—is that the Government do not take the process as seriously as they used to. That is my impression too.

The noble Lord, Lord Boswell, spoke of the perpetual lateness and inadequacy of Explanatory Memoranda. Aficionados will have followed with interest the increasingly irate correspondence in the previous Session between him and the Financial Secretary to the Treasury over the 2012, 2013 and 2014 Budgets, various measures of financial services and banking legislation and the infamous financial transaction tax. The common theme to all those letters was delays, missed deadlines, superficial analysis and unanswered questions. I know that the Treasury suffers from staff cuts and a high turnover—I read the figure of 20% a year turnover in the press the other day. I cannot believe that, but perhaps the Minister will enlighten us. If it is true, it is extremely alarming. The Permanent Secretary to the Treasury came to answer a friendly call from Sub-Committee A and assured us that performance will improve. I hope it will; we wait to see.

There is a particular reason why delayed Explanatory Memoranda are not just discourteous and in breach of the rules but actually dangerous. I attach some importance to the subsidiarity mechanism. There is a deadline of eight weeks for the use of the yellow card. This morning, in Sub-Committee A, we looked at a proposal which, to my amateur eye, seemed to raise a question of subsidiarity. Whether or not I was right is completely academic, because the proposal was dated very early in June, but it came to the committee this morning, so there is no way in which, if I were right and the committee and the chairman agreed with me, we could use the yellow card, purely because of delays that occurred in London. The Government need to take seriously the rules which are clearly set out in Cabinet Office guidance to the whole of Whitehall, and which used to be enforced quite fiercely by Permanent Secretaries—I can give a personal assurance that that used to be the case.

Of course, there are also objective reasons why the scrutiny process has got more difficult, why we have to run harder to stay still. We have to catch up with co-decision. The Council is now only the co-equal legislator with the European Parliament. I am not convinced that we in this Parliament or the Government are yet doing enough to try to influence the European Parliament in the European Union interest and the UK interest. The problem is exacerbated by the Conservative Party having left the EPP. It is quite difficult even for distinguished senior Conservative Members of the European Parliament to have as much influence as their predecessors. I pay tribute to Malcolm Harbour, who is a sterling exception to what I just said: he proves that what I am saying is not true in all cases. I pay tribute to Sharon Bowles, but I think that the West Lothian question—let us call it the Westphalian question—will impose itself on the next European Parliament in relation to the chairmanship of committees. Sharon Bowles has put in a sterling performance as chairman of one of the key committees of the European Parliament. She has done extraordinarily well but she has hung on to her job by the skin of her teeth because, for a large number of members of her own grouping in Strasbourg, it is difficult to see why, when the United Kingdom has stood aside from fiscal union, banking union and bailouts—from the core business of the Parliament on economic matters—a UK MEP can be the chairman of its key economic committee. I hope that she survives, as she does a great deal of good in the European interest and the UK interest, but I am not sure that she can.

The European Parliament has also drifted away from national Parliaments a bit. On the multiannual financial framework, I did not see much recognition in the European Parliament, with its insistence that the totals were too low, of the need for painful belt-tightening being felt in member state Parliaments. On the financial transactions tax, I was shocked by some of the arguments advanced in the European Parliament, where the greatest enthusiasm came from those who thought that the financial sector needed to be punished for its crimes in the financial crisis and that throwing grit in the wheels of the capital markets was a good idea, per se. I did not see many arguing that having a great international financial centre inside the EU is a huge EU asset and that the City of London needs to be listened to, and that the FTT therefore needs to be rejected. Those who want to make such arguments in the Parliament could be assisted in making them by people like us, so I have three very modest proposals.

First, is there perhaps a case for inviting key United Kingdom Members of the European Parliament to participate in certain subject-specific Select Committee meetings, not as witnesses but as country members sitting on our side of the table and talking with us about how best to affect the EU outcome? Secondly, should our chairmen regularly meet the chairs of the European Parliament committees and, thirdly, could we even consider—a daring suggestion—a joint committee of members of the Select Committee of this House with UK Members of the European Parliament? It could perhaps have fluctuating membership, depending on the issue of the day. I am not saying that these meetings should be the kind which happens for form’s sake, with very long agendas, or on a regular basis. I see them as ad hoc, and called to deal with a particular big issue, such as the seven-year financial framework this spring, or the financial transactions tax. If, as I hear, the Select Committee is to consider the role of national Parliaments, I hope that it might consider looking into these suggestions.

I have one other suggestion, which I also put to the noble Lord, Lord Boswell, with a certain degree of trepidation. We have to acknowledge that the performance of our own committee could be improved. We do very well but I think we could do better. The Commission sends to this House, electronically and instantly, every legislative proposal that it puts forward at the moment when it is sent to the Council. They are here before they are read by Sir Jon Cunliffe in Brussels. What do we do with them? We actually do very little because since we joined the European Union, it has been our practice to wait. In those days, we would have waited for the carrier pigeon to arrive with the paper from Brussels. We wait until the Government send us along a copy, telling us what they think of it. Why do we wait for the Government? We could be self-starters and form our own view by considering the most contentious proposals—the ones where, say, subsidiarity confers real importance on deadlines and efficiency.

There would be resource consequences from such a change. It would have costs for this House. But if we cannot get the Government to perform as they used to, it seems to me that we will have no choice but to kick the process off ourselves if we are to retain the standards of scrutiny that we used to have and, I hope, improve them—and we should be improving them.

The Prime Minister was quite right when he said on 23 January:

“It is national parliaments, which are, and will remain, the true source of real democratic legitimacy and accountability in the EU”.

I agree and I think that most Brussels insiders—even some Members of the European Parliament—would agree, although some are clearly a bit puzzled that six months on, he still has not produced any specifics as to what he means and what his improved national parliamentary accountability would look like or how it would work. The Prime Minister talked about it as if it were a matter for treaty change. I really cannot see that at all. We could look again at Articles 10 and 12 of the treaty, which could be expanded, but they are deliberately unspecific—correctly, I think. It would be wrong in principle that an EU treaty should purport to lay down how member state Parliaments should control the business of the European Union. This is entirely a matter for us.

Our system, which used to be almost as good as the Danish system but now is definitely not, being some way behind, is still better than the system in some other countries. However, before we preach too loudly, “Physician, heal thyself”, the answer to the problem which the Prime Minister rightly describes is at least partly in our own hands. If we were to improve it, by catching up with co-decision and technology, we would improve democratic accountability in this country and be better placed to encourage others to follow our example.

--- Later in debate ---

[Lord Wallace of Saltaire]

My Lords, I am simply not briefed on that. However, I can assure the noble Lord that as a Minister I travel with Ryanair and easyJet to various places around the outer fringes of the European Union. We also do our best to economise where we can. I remind the noble Lord that this is the leanest Government that Britain has had for many years because we have cut the government car pool very substantially—we have to walk everywhere.

This is a very timely debate. I recall our previous debate on the annual report, which took place rather later than this one, and in the Moses Room, although we are now here in the Chamber. I also recall it because the noble Baroness, Lady O’Cathain, criticised me very sharply on that occasion for not having read every single report that the committee had produced in the previous year. I can assure her that I have read at least the summary of every report that the committee has produced this year.

There are, of course, many examples of the way in which the committee has fed into the Brussels process and the work of other Governments, as well into the debate within Britain. We are concerned at the criticisms that the committee has made of the untimely provision of Explanatory Memoranda, and in particular of the role of the Treasury. We very much take on board what the noble Lord, Lord Kerr, said about the importance of timeliness in terms of subsidiarity. I will take all the points back, and we will discuss them in the Cabinet Office, the Foreign Office and various parliamentary branches of the relevant departments, to make sure that they are fully taken on board. I am an enthusiast for the development of the use of the yellow card mechanism. We have to make sure that we are given all the resources we can manage so that we will be able to use that to its best ability.

I have been heavily involved in the balance of competences review for six months, about which various comments have been made. Perhaps I may stress that those reports were not intended to have policy recommendations at the end. They were intended very much to feed into a better informed debate in the United Kingdom. I hope that the first six reports have done so. I look forward—although perhaps not entirely—to three more rounds of very careful assimilation of a large amount of evidence presented into another collection of reports.

I say to the noble Lord, Lord Hannay, that the balance of competences exercise is very much in parallel to other aspects of what is going on in government. We have welcomed his committee’s report on the justice and home affairs opt-out. The balance of competences exercise is proceeding in parallel with a whole range of other negotiations and the order of reports was drawn up some time ago, with other dimensions in mind.

We are attempting, both within the balance of competences exercise and in the work of this and other committees, to provide space for a reasoned debate within the European Union about our interaction with the European Union. We all recognise that over the next nine to 12 months that debate may be constricted in some ways as we move towards the next European elections. We are also conscious, particularly so over the past week, that the press is not always favourable to a reasoned debate. The Leveson report remarked that in press coverage of the European Union—as with press comment on women, minorities and Muslims—its attitude is that it is quite acceptable to invent stories without any source whatever.

I was very struck to see this story in the Mail the other day:

“Revealed: The shadowy lobbyists waging war to keep Britain in Europe”,

I read it with great interest, only to discover that it was actually talking about British Influence, which is an entirely public body. I think that the Mail had lifted this story from a Eurosceptic blog, which said that British Influence was a deeply dangerous organisation funded by the secretive Bilderberg Group. Oddly enough, the Mail did not include that bit.

I was also quite worried by the article by Peter Oborne in the Telegraph last week, saying that:

“The 1975 referendum was a fair poll in the same sense that the elections due to be held in Zimbabwe next Wednesday will be fair … The sense has lingered that we were hustled, against our will, by an anti-democratic elite, into an organisation whose true aims and nature were hidden from us until too late”.

The BBC, of course, was playing a role in the deceitful agenda.

On Saturday, the Telegraph’s Brussels correspondent, Bruno Waterfield, told us that,

“the European Union is planning to ‘own and operate’ spy drones, surveillance satellites and aircraft”,

under the control of the noble Baroness, Lady Ashton, in,

“a major move towards creating an independent EU military body with its own equipment and operations”.

I was therefore very pleased to receive this morning an invitation from King’s College London to a debate in October on how to ensure that we have impartial reporting on the European Union, at which Bruno Waterfield will be one of the speakers.

I say this partly to demonstrate that getting reasoned debate based on evidence about Britain’s involvement in the European Union is not easy and that this committee plays an immensely valuable role in helping to widen that debate. I hope that noble Lords have read the balance of competences review papers so far and I hope that they feel that they have drawn in evidence-based policy with which perhaps to counter the emotion-based policy, the prejudice-based policy and the conspiracy-oriented allegations which so often cloud out rational debate in Britain. All parties must contribute to this effort.

I say to the noble Lord, Lord Judd, that I very much look forward to hearing a speech from the Labour leadership comparable to the speech made by the Prime Minister in January. The leader of my party, the Deputy Prime Minister, will make a major speech on the European Union in October. I very much hope that we will hear a constructive Labour contribution to an EU reform agenda that keeps Britain in the European Union. This is what the Prime Minister was talking about, and I confirm to the noble Lord, Lord Liddle, that that is what the coalition Government are pursuing, rather than unilateral repatriation intended to lead to an exit, which is what the Telegraph, the Mail and a number of others on the fringes of conventional politics very much want us to pursue.

I turn to various issues that were raised in the debate. The sub-committee on foreign affairs produced a very valuable report on common security and defence policy. I have noted that on scrutiny we have shifted very often from major reports to follow-on reports and continued scrutiny. As we approach the December European Council, which will have European defence very much on its agenda, I trust that the sub-committee will continue to monitor the way in which the British Government and others approach this. As everyone knows, there is a tension between those who are interested in institution building and others who are interested in practical conflict prevention and conflict resolution under that dossier.

Similarly, on banking union, it would be immensely valuable if the sub-committee responsible for that continues to monitor the ongoing debate. Having read its report and various other—mainly German—documents, I think that I understand the various different definitions of banking union that are floating around. However, because there are so many different definitions of banking union—with maximum, minimum et cetera—clearly we need to contribute to the debate. As the noble Lord, Lord Harrison, and others rightly said, we need to think also about where in the debate the interests of Britain and of Britain’s financial centres are at stake.

On the workload of the European Court of Justice, I take on board what has been said. We have now moved on the question of—

[Lord Kerr of Kinlochard]

Advocates-General.

[Lord Wallace of Saltaire]

Advocates-General. The question of more judges is now about to come up.

On the question of students and migration, I will write to the noble Lord, Lord Hannay. However, I will say now that the government line is that students who stay here for three to four years are not necessarily temporary visitors. That is one reason why the question of what role they play in the statistics is important. As the father of a student who went to the United States seven years ago and who I hope will come back to the United Kingdom one day, I am very conscious of the tensions.