Remuneration of EU Staff

Stephen Phillips Excerpts

Tuesday 21st February 2012 Commons Chamber

[Jacob Rees-Mogg (North East Somerset) (Con)]

The exemption clause states:

“If there is a serious and sudden deterioration in the economic and social situation within the Community, assessed in the light of objective data supplied for this purpose by the Commission, the latter shall submit appropriate proposals on which the Council shall act in accordance with the procedure laid down in Article 283 of the EC Treaty”,

which has subsequently changed. The EU has decided that there has never been such an exception, even though we have been through the most extraordinary economic crisis in the past few years.

Yesterday, European Committee B discussed a Commission document that states:

“EU economic growth is faltering. In the euro area, this is exacerbated by the sovereign debt crisis and fragilities in the banking sector. These have created a dangerous feedback loop.”

The Commission says that the economy faces a crisis and that it is in a “dangerous feedback loop” but that there is no reason on earth why it should consider the salaries that it and others who work within EU institutions are paid.

The Minister has said that the economic situation in this country is serious enough for a freeze in public pay, and we know that the EU prescription for Greece and other countries that face economic crisis is austerity and pay cuts, but when it comes to the EU institutions, the situation is different—they say there is no real crisis or problem, and no exceptional circumstances, and that they must therefore carry on regardless. Can that possibly be a proper, moral or respectable way for an international body to proceed?

What can the Government do about it? So far, they have rightly pointed out to the Commission that they think the circumstances are exceptional and have tried to persuade it to change the basis for raising salaries, but the Commission has refused, with the backing of the European Court of Justice, which I shall come to in a moment.

The Government could, however, take another action. Under article 336 of the treaty on the functioning of the European Union, Governments are entitled to change the employment terms of people employed by EU institutions. If those terms are changed, the exceptional circumstances clause could be removed or changed—the whole basis for pay increases could be changed. That is where the Government ought to start. They should say to other member states that the employment terms and conditions no longer apply and are no longer relevant for the circumstances that we face. They can do so even if the Commission objects—that is in the treaty.

On the Court, in 2009 the Council instructed the Commission to use the exceptional circumstances clause. The Commission took the council to court and won the judgment of the EU in case C-40/10. The Court held that exceptional circumstances did not exist, and therefore overrode what the Council had done and reinstated the Commission’s proposals, which was interesting. When I raised the point with a lawyer, and said, “Well, what about the judges themselves? How are they paid?” the lawyer said, “It is inconceivable—inconceivable!—that the judges themselves could be beneficiaries of the scheme on which they had ruled.” I said, “It may be inconceivable, but is it possible to find out?”

A parliamentary answer from Lord Malloch-Brown, the then Foreign Office Minister, to a question from Lord Lester of Herne Hill, was helpful in that regard. Lord Malloch-Brown states:

“The terms and conditions for judges and advocates-general of the European Court of Justice…are set out in European Communities staff regulations.”—[Official Report, House of Lords, 18 June 2008; Vol. 702, c. WA166.]

The staff regulations are subject to the system whereby the terms and conditions may be changed in exceptional circumstances. I therefore looked at the regulations, thinking once again that it surely cannot be true that the EU—an institution that might not be liked and loved by many, but that is thought to understand basic principles of justice—has a situation in which judges decide on their own pay rise.

I therefore looked through “Title 1: General provisions”, article 1(21)(73)(96), which sounds very scientific. The provision states:

“These Staff Regulations shall apply to officials of the Communities.”

The document goes on to state:

“For the purposes of these Staff Regulations, ‘official of the Communities’ means any person who has been appointed, as provided for in these Staff Regulations, to an established post on the staff of one of the institutions of the Communities”.

The next step was to check what exactly are the institutions of the EU, because I still could not believe that there was such an affront to justice within the EU. I would have been very surprised had the European Court of Justice turned out to be such an institution, but when I looked at article 13 of the treaty on the functioning of the European Union, I found that the Court of Justice of the European Union, as it is properly called, is indeed one of the institutions of the EU. And yet according to the Commission, the Court’s judges had ruled so clearly that exceptional circumstances did not exist.

[Stephen Phillips (Sleaford and North Hykeham) (Con)]

rose—

[Jacob Rees-Mogg]

I will of course give way to my hon. and learned Friend.

[Stephen Phillips]

I may or may not be the lawyer who described the idea that judges could be beneficiaries of a scheme on which they had ruled idea as “inconceivable”, but does my hon. Friend agree that if true, far from being inconceivable, it is utterly disgraceful?

[Jacob Rees-Mogg]

I am grateful to my hon. and learned Friend, because he gave me time to find the right quotation in my papers, which shows that he is even wiser and more helpful than I had thought. The Commission says that the Court found, in paragraph 74 of its judgment, that an extraordinary situation did not exist, and that it must enable

“account to be taken of the consequences of a deterioration in the economic and social situation which is both serious and sudden…under the normal method”.

The decision was that the economic and social situation was not serious and sudden enough.

--- Later in debate ---

[Sammy Wilson]

That is quite right. Any objective observer is bound to be angry about the fact that there seems to be one set of rules for those cosseted within the structures of the EU, and another for the millions ruled by them and on whom it imposes its wishes. Social disorder is now appearing on the streets of Greece, Italy and other European countries. One can understand why people are angry at the imposition of rules by people who seem totally out of touch and by institutions that, as the hon. Member for North East Somerset clearly explained, are so incestuous in their decision making—they collaborate with each other, supporting one layer of the institution with another layer—so we are bound to get the kind of reaction we have seen.

[Stephen Phillips]

The hon. Gentleman says that the institutions of the EU are out of touch, but of course, in the case of judges, they are also unelected and, it would seem, unanswerable to anybody. Does he agree?

[Sammy Wilson]

That is one reason why we get the kind of decisions we get from EU judges—whether they are about whom we can deport from the UK or about pay structures for EU civil servants.

Some will say that those who take my stance simply want to have a go at Europe. I have absolutely no hesitation in saying that I am a member of the Better Off Out group. I believe that we ought to loosen our ties with the EU so that it is what was originally intended—a free trade area, not a political entity. But I want to leave my political views aside for a moment. I am pleased that the Prime Minister has taken the stance that he has in recent days on Europe, and I hope that he does not weaken it. I hope that he keeps the strong backbone that he has shown. However, one way of hurting the EU is for us to say, “We’re not prepared to finance this grotesque behaviour in the face of the austerity affecting all the EU nations.”