European Union Committee: Report on 2013-14 (EUC Report)

Lord Wallace of Saltaire Excerpts

Thursday 24th July 2014 Lords Chamber

[Lord Wallace of Saltaire (LD)]

My Lords, I think this is the third time we have had an annual debate on the work of this extremely important committee. I regret that we are very much at the last hour of a Thursday evening and keeping the staff here, and that we are rather thinly staffed on the Benches at the moment, because this is an extremely important committee. When the noble Lord, Lord Boswell, introduced this debate I thought about how long this committee has gone on and how closely many of us have been involved with it. When I first became a Member of this House, the then Clerk of the Parliaments, Michael Wheeler-Booth, enjoyed entertaining people in front of me by saying that when he was the first clerk to the committee one of its first witnesses was a rather nervous young woman academic. He gave her a double gin and tonic before she gave evidence to the committee to steady her nerves. The young academic was Helen Wallace, my wife.

Shortly after I joined the House, I was posted to Sub-Committee F and, because the chair resigned unexpectedly, I became its chair. I had an experienced clerk to train me and then found myself with an entirely newly appointed and totally inexperienced clerk called Christopher Johnson, whom I was expected to train. I think he has done quite well since then and I hope the committee is happy with the highly experienced clerk he now is.

We all need calm and reasoned debate on matters European and we all realise how enormously difficult it is amid the cacophony of ignorant prejudice all around us to hold to a highly reasoned and calm debate, often on highly technical issues, set out in highly technical language which, nevertheless, can touch on major UK interests and dilemmas. As some noble Lords may know, I have been involved very closely in the balance of competences reports. I hope noble Lords have followed these with increasing confidence because we have attempted to see them very much as a parallel process of evidence-based consideration of British interests in European co-operation and of how far the current balance of competences suits British economic, social and political bodies engaged with European policy.

I say to the noble Lord, Lord Bach, that the reason some reports have only just been given to the committee is that the third round of this four-round exercise was completed only some weeks ago, and the 11 reports were published on Tuesday of this week. These included the delayed report on the free movement of persons and the single market report on financial services and capital, which was mentioned in last evening’s debate and provides a high-quality analysis of some of those complicated issues.

The fourth round is now in process. We hope to complete that before the end of the year. It will include a report on subsidiarity and proportionality, a matter of active interest to the noble Lord, Lord Hannay, among others. The fourth round has only seven papers, but because they are on complicated, cross-cutting issues, these will be some of the most difficult. I hope that this will all feed back into the work of your Lordships’ European Union Committee.

There is another report coming up on enlargement. The noble Lord, Lord Bowness, touched on how complex and delicate a subject that has now become. There is another on citizenship, voting and the related issues of individual rights within the European Union.

In the process of negotiating the balance of competences papers through three rounds now, I have discovered how much overlap and interaction there is between UK engagement with the European Union and with other multilateral organisations through which the UK pursues and negotiates its economic security, regulatory and political interests: the OECD, the OSCE, the WHO—within which the EU operates as a regional body for certain purposes, which I did not know until I read the balance of competences health report—the IMF, the Bank for International Settlements, the Food and Agriculture Organization and so on. There is a case for this House to consider in the new Parliament whether it should not at least experiment with one or two more committee inquiries that will look at how the UK works through other technical and specialised international organisations.

The need for calm and reasoned debate, particularly on questions such as Russia and Europe, came home to me as I picked up my Daily Mail this morning and saw the full-page article by Stephen Glover which explains that it is the EU’s fault that the Dutch aircraft was shot down over eastern Ukraine. One need not go through the various stages through which he demonstrates that it is entirely the EU’s fault. There is no mention of the pressure from within Ukraine itself for closer relations with the European Union. In December 1991, I spoke at a conference in Kiev, when Ukraine had been independent for three weeks, at which the Prime Minister announced that among the two strategic aims of the state’s foreign policy was to join the EU within three years. I was then asked to explain why that might be a little more difficult than he expected. There was no mention in the article of the Bush Administration’s encouragement of Ukraine and other states to join NATO—“No, it is the European Union’s fault. President Putin is a splendid man and everything that is wrong with the country is the fault of those dreadful people in Brussels”. That means that we absolutely need detailed arguments demonstrating where British interests are better pursued at an EU level or better pursued at the national level, and thus to unpick, one by one, some of the arguments that are produced in the other direction.

The noble Lord, Lord Harrison, asked me a specific point about whether the Government had been invited to engage with the euro group and whether we have declined or not. I do not know the answer to that. I will draw it to the attention of my Treasury colleagues and promise that we will respond to the committee as soon as we can.

The noble Lord, Lord Bach touched on the extent to which the Foreign Office co-operates with the committee. As a Foreign Office Minister, I am impressed by the quality of FCO officials working on European issues, the balance of competences and a number of other areas. We are keen to co-operate as far as possible with the committee; that, of course, is part of the strategy of wanting to strengthen the role of national parliaments. Mr Lidington appearing before the committee before the June Council was seen as an experiment, but it is certainly something that we might well take further.

I would merely mention, in terms of what I understand are the Labour Party’s intentions for the other place, that the Commons European Scrutiny Committee proposals—to which the Government have now also responded—suggest that it would be more useful in the other place for departmental Select Committees to become more directly engaged with European issues themselves, rolling the European dimension in with the regular spread of sectoral policy in the United Kingdom.

Extending the role of national parliaments is one of the targets of the coalition Government’s EU reform agenda, which requires active engagement with the Brussels institutions and other national parliaments, with the National Parliament Office, which we maintain in Brussels, and with COSAC. I note the slightly mixed message about COSAC from the noble Lord, Lord Boswell. I am sure that it is much better than when I used to go to COSAC.

We are experimenting with reasoned opinions and yellow cards. Some other parliaments have already produced more reasoned opinions and yellow cards than either of the two Houses of the British Parliament; that is something that we clearly need to take further.

I take the various critical points that the noble Lord, Lord Hannay, made—that there is a shortage of time, which we need to discuss again at the Commission, that there has been resistance from within the Commission to reasoned opinions and that we need to strengthen links also between national parliaments and the new European Parliament, which is an issue to which we must all return.

[Baroness Scott of Needham Market]

Would my noble friend accept that a particular role for government departments in all this is the speed with which Explanatory Memoranda are issued. Certainly on my committee, we have had problems when the clock is ticking on the reasoned opinion taxi meter and we are still waiting for the Government’s Explanatory Memorandum.

[Lord Wallace of Saltaire]

We all understand that that is part of the problem and the pressure, and we are doing our utmost to look at that as well. I also take the point made by the noble Lord, Lord Hannay, that effective scrutiny necessitates the earliest possible engagement with developing areas of policy, looking at work programmes and strategic views.

I am glad that the noble Lord, Lord Boswell, feels that the Government’s scrutiny performance has improved somewhat in the last year. It is one of those things on which we all have to maintain the pressure. Civil servants are always very busy and Ministers always have too many things in their in-tray, but we have to keep up the pressure on all that.

The noble Lord, Lord Bach, asked whether the Government’s evidence on the abuse of free movement rights could be shared with the House. Much of that is in the free movement of persons paper that was published on Tuesday. Having been very closely involved in negotiations over that paper, I might say that the evidence is not always entirely clear; that is part of the problem in discussing questions of free movement of persons and labour and the abuse of free movement rights. That is partly because we do not have exit controls in this country and partly because we do not collect all the central evidence. For example, I questioned at one stage an academic study that suggested that there were 40,000 British citizens receiving benefits in other states in the EU. That is an academic estimate, but nobody is entirely sure whether that is an exact figure. So there are many problems in addressing that very complicated issue.

The noble Earl, Lord Caithness, asked whether the UK had been diffident in its approach to the financial transaction tax. The Government have been very closely engaged with this issue since publication and, indeed, took a case to the European Court of Justice on that issue to raise the question of how far it would be appropriate for the European Union to move on that subject. We remain actively engaged.

The noble Lord, Lord Tugendhat, talked about the Transatlantic Trade and Investment Partnership. That will be a central but extremely difficult issue for the coming year; we know that there will be lobbies not just in France and elsewhere but in this country that will want to raise negative issues about TTIP. That is something that we will clearly have to follow.

May I say, as spokesperson for the Cabinet Office and therefore dealing with a lot of data sharing issues, that I would welcome the European Union Committee looking further at aspects of the digital single market as well as data sharing and data protection? Some months ago, I asked for a briefing within Whitehall on the digital single market and officials from five different departments came to brief me, demonstrating just how complicated an issue it is. After all, this is all one issue in a complex, multi-levelled set of issues for government that is driven by the speed of technological change. I am constantly struck by how much faster technology is taking us down the road to online, cross-border transactions than we previously understood. The digital single market is a major priority in the Government’s drive for EU reform and it is part of the extension of the single market to services, as services and manufacturing intertwine and overlap. It will be a difficult issue also in TTIP, as data regulation, the cloud and the role of the US service providers hit the issue of data protection.

I am conscious of the time. I hope that I have answered most of the issues, but I see that there are one or two questions still to come.

[Lord Hannay of Chiswick]

Before the Minister sits down, I understand why he is in some difficulty in addressing the point that I raised about the claim that national parliaments are “the basis” for real legitimacy in the European Council, not in the European Union, not “a basis” for it. Of course he cannot take back the words that, alas, have been written in the response to the national parliament role report, but we are going to debate it again and I hope that he will report back to his colleagues the dangers they are taking if they turn the question of strengthening the role of national parliaments into a contest with the European Parliament. They will not get anywhere if they do that. It has to be pursued as a matter in which both national parliaments and the European Parliament have a role in assuring the democratic legitimacy.

[Lord Wallace of Saltaire]

I very much take that point. The new European Parliament is a rather more difficult body with which to co-operate than its predecessor, but I think it is extremely important nevertheless that we do co-operate. I am in the middle of making arrangements to go out myself with one or two others in September to talk to new Members of the European Parliament, British and others, with whom, of course, we must co-operate.

[Lord Bach]

I am grateful to the noble Lord. May I remind him of my final question? It was about the position regarding the new Commissioner and the Government’s response to him coming to a hearing at either of the two committees or both.

[Lord Wallace of Saltaire]

My Lords, I apologise; I should of course have responded to that. The Government have no difficulty with the noble Lord, Lord Hill, coming to talk to the committee. I think that they would resist any idea that this should be a formal process through which the committee would decide whether or not it thought he was the appropriate British candidate. However, in pursuance of a close and continuing relationship with the committee, I am sure that he would be entirely open to coming to give evidence and to start what will be a continuing process. One of the sad disadvantages of the noble Baroness, Lady Ashton, being the European Union’s high representative has been that she has, perforce, had to spend much of her time outside Europe. She has therefore not been able to pursue one of the many useful roles of a commissioner from a particular country, which is to spend time maintaining a link between the public and political elite in her own country and the Brussels process. I know that the noble Lord, Lord Hill, is very anxious to make sure that that is seen to be part of his new role.