House of Commons - European Scrutiny

Select Committee on European Scrutiny Thirty-Third Report

5. WHO DOES WHAT

94. There is a longstanding concern, at least in some Member States, that the EU intervenes extensively in matters which should be left to the Member States or authorities within them, and that the powers of Member States and other authorities are gradually being eroded by the EU. The Laeken Declaration stated that many citizens 'feel that the Union should involve itself more with their particular concerns, instead of intervening, in every detail, in matters by their nature better left to Member States' and regions' elected representatives', and that 'What they expect is more results, better responses to practical issues and not a European superstate or European institutions inveigling their way into every nook and cranny of life.'

95. At the Nice IGC it was agreed that the next IGC should consider 'how to establish and monitor a more precise delimitation of powers between the European Union and the Member States, reflecting the principle of subsidiarity',[190] and the Laeken Declaration takes up that theme in a section headed 'A better division and definition of competence in the European Union.' Our general view is that a clearer definition of competences is needed and that, since democracy and accountability cannot work as effectively at supranational levels as at the national level, the EU's tasks should be confined to areas where action at EU level is clearly more effective.

96. There are three related issues here:

(ii) The principle of subsidiarity (i.e. of powers being at the levels where they can be exercised most effectively), particularly in areas where power is shared between the EU and Member States (though it is also relevant to the allocation of powers). The Laeken Declaration asks how it can be ensured that 'a redefined division of competence does not lead to a creeping expansion of the competence of the Union or to encroachment upon the exclusive areas of competence of the Member States and, where there is provision for this, regions,' while at the same time ensuring 'that the European dynamic does not come to a halt.'

(iii) In areas where the EU does act, leaving more flexibility to Member States. The Laeken Declaration asks whether the day-to-day administration and implementation of the EU's policy should be left 'more emphatically' to the Member States or (where appropriate) regions, and whether there should be 'more frequent recourse to framework legislation, which affords the Member States more room for manoeuvre in achieving policy objectives'.[191]

97. The last of these is the least controversial (at least in the abstract), but not necessarily easy to achieve, since it needs to be ensured that the 'policy objectives' really will be achieved. Commissioner Barnier accepted that 'we do need to ask ourselves why directives, which initially were supposed to be framework directives setting out the general game plan, now enter into such minute detail', but pointed out that it was often people outside the Commission who had demanded greater detail — for example business interests in the case of environmental standards, in order to prevent distortion of competition.[192] The Scottish Executive's Deputy First Minister (Jim Wallace) argued strongly for greater flexibility, for example in environmental matters, so that the legislation could be moulded to suit particular Scottish circumstances, thereby making it more effective.[193] While recognising that there will sometimes be a difficult balance to strike and that each case must be considered on its merits, we endorse the principle that the EU should legislate wherever possible with a light touch, leaving as much flexibility as possible to Member States and authorities within them.

Allocation of powers

98. The EU is entitled only to those powers conferred on it by the Treaties. Its legislative competences are of three types:

Exclusive competences. These are common commercial policy, fisheries[194] and (for States in the euro area) monetary policy, together with areas where exclusive competences arise 'because the Community legislates extensively in the area concerned'. Internal market legislation is also, in principle, an area of exclusive competence, but Member States may legislate where the Community has not fully exercised that competence.

Shared competences. In these areas Member States may legislate where the EU has not done so, but not otherwise. EU action is subject to the principles of subsidiarity and proportionality (discussed below). Most EU activity falls within this category of shared competences, including activities under the two inter-governmental pillars and citizenship, agriculture and fisheries, the 'four freedoms' (free movement of goods, persons, services and capital), visas, asylum and immigration, transport, competition, taxation, social policy, environment, consumer protection, trans-European networks (interoperability and standards), economic and social cohesion, energy, civil protection and tourism.

Complementary competences. In these areas the EU simply supplements or supports the action of Member States, or adopts 'measures of encouragement' or co-ordination. These areas include economic policy, employment, customs co-operation, education, vocational training, culture, public health, trans-European networks (except interoperability and standards), industry, research and development, development co-operation and defence.

Member States retain competence in areas where the Treaties exclude EU competence, recognise the competence of Member States or are silent. However, the European Court of Justice has sometimes taken the view that EU competences necessary to implement aims set by the Treaties flow implicitly from the Treaties. The EU has non-legislative or executive competence only where necessary to achieve the aims of the planned action or ensure uniform application or where the legislation specifically provides for it (as in competition policy).[195]

99. The report drawn up for the EP's Constitutional Affairs Committee on the division of powers noted that a large part of the Council's work does not have direct legal force, consisting instead of political guidelines, and that 'one of the novel successes of the Union is to have encouraged national governments to work together, within common institutions, to exchange information and co-ordinate their action, even in areas which remain within national jurisdiction'. There is also one area of compulsory co-ordination, on national fiscal policies.[196]

100. The main problems with the present allocation of powers are lack of clarity and, arguably, that it does not always accord with the principle of subsidiarity. According to the EP's Constitutional Affairs Committee, part of the problem lies in the fact that the Treaties sometimes allocate competences on the basis of policy areas and sometimes on the basis of objectives, and that they are excessively inflexible (resulting in extensive use of Article 308 EC).[197] The EU also tends to act through legislation because that is where its competences lie. According to the Foreign Secretary, 'The current lack of clarity... creates the impression that power is draining away from national governments to the centre.'[198]

101. A major obstacle to greater clarity is that a large proportion of the competences are shared ones, and necessarily so. According to the Scottish Executive, 'Much of this debate ignores the fact that the problems the EU is trying to tackle (such as social exclusion, unemployment and environmental issues) cannot be solved by one tier of government alone.'[199] The Local Government International Bureau states that good governance requires equal partnership and co-operation between all "spheres" (rather than "levels") of government, that most EU competences will be shared ones, and that 'competences such as "the environment" cannot sensibly be allocated exclusively either to the EU or to Member States.'[200] Several of our witnesses cited the example of education, an area firmly under Member State control and where the EU has only a 'complementary competence', but where the EU can play a useful role in certain areas, such as mutual recognition of professional qualifications.[201]

102. We draw the following conclusions:

A clearer allocation of powers is desirable, especially where powers have been inferred from objectives set in the Treaties, but on its own will have limited impact because of the prevalence of shared powers;

There need to be arrangements to review the allocation of powers periodically, with the possibility both of adding new powers and of returning existing ones to the Member States; we note that the Laeken Declaration mentioned the possibility of 'restoring tasks to the Member States', and that the EP Constitutional Affairs Committee's report suggested some return of powers in respect of agriculture and regional policy to the Member States,[202] although whether the EU institutions will in practice ever be willing to return any powers to the Member States remains to be seen;

The principle that all powers not transferred by the Treaties to the EU remain with the Member States must be maintained, and it must be made clear that the powers of Member States are not derived from the Treaties; but, subject to that, we see merit in a list of powers from which the EU is specifically excluded;

'A simpler statement of principles, which sets out in plain language what the EU is for and how it can add value',[203] as proposed by the Foreign Secretary, would be worthwhile.

Subsidiarity

103. The principles of subsidiarity and proportionality were incorporated into Community law through the Maastricht Treaty of 1992, which gave effect to the following in respect of shared competences:

'In areas which do not fall within its exclusive competence, the Community shall take action, in accordance with the principle of subsidiarity, only if and insofar as the objectives of the proposed action cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale or effects of the proposed action, be better achieved by the Community.

'Any action by the Community shall not go beyond what is necessary to achieve the objectives of this Treaty.'[204]

104. A Protocol to the Treaty of Amsterdam of 1997 provided further guidance:

'The following guidelines should be used in examining whether the above-mentioned condition is fulfilled:

the issue under consideration has transnational aspects which cannot be satisfactorily regulated by action by Member States;

actions by Member States alone or lack of Community action would conflict with the requirements of the Treaty (such as the need to correct distortion of competition or avoid disguised restrictions on trade or strengthen economic and social cohesion) or would otherwise significantly damage Member States' interests;

action at Community level would produce clear benefits by reason of its scale or effects compared with action at the level of the Member States.'[205]

The Protocol also provided that the reasons for proposed Community legislation should be stated, demonstrating compliance with the subsidiarity principle by means of 'qualitative or, wherever possible, quantitative indicators', that the Commission should produce an annual report on the application of the principles of subsidiarity and proportionality, and that the Council and the EP should also take account of those principles in any amendments to Commission proposals.[206]

105. The UK Permanent Representative told us that there had been 'a distinct improvement since the principle of subsidiarity was implanted in the Maastricht Treaty, strengthened by the Protocol in [the Treaty of] Amsterdam and supported by a change of policy, if not yet a complete change of culture, within the Commission and the other Union institutions'. He particularly commended the Commission in this respect,[207] and we note the statements relating to subsidiarity in the Commission's White Paper on European governance.[208] However, the Permanent Representative also indicated that 'there are still cases where the United Kingdom has expressed concerns on subsidiarity grounds'.[209] We too encounter legislation clearly offending against the principle of subsidiarity — most recently the proposed legislation on racism and xenophobia.[210]

106. Debates in the Convention have indicated strong support for the principle of subsidiarity.[211] However, support for the principle in the abstract does not necessarily lead to application of it in specific matters, and there are widely differing views as to what constitutes subsidiarity, illustrated by the combination in the speech of 22 May 2002 by the Commission President (Romano Prodi) of references to subsidiarity and a call for, among other things, 'an integrated European police force'.[212] Sir Neil MacCormick MEP described as 'one of the oddities' the fact that national governments support the principle in theory but breach it in the Council in practice, referring to the 'curious excess of zeal of the States acting together to bind the States acting separately'.[213] Alain Lamassoure MEP described the problem to the Scottish Parliament's European Committee as follows:

'It is even more surprising that even the Member States are not in favour of abiding by the subsidiarity principle — at least the members of the Council of Ministers are not. Why is that so? It does not matter to a Minister for agriculture, environment or the budget whether the last word is in Brussels rather than in his or her capital city — that Minister does not feel that he or she is losing authority or competence. The only difference is that decisions are made in Brussels instead of in the Minister's capital city — the Minister is always at the table. It is even more convenient for a Minister who is a member of the Council of ... Ministers to negotiate and decide in Brussels than in his or her capital city, because in Brussels the Minister is among fellow Ministers who are in charge of the same competence. Such Ministers are also more remote from the scrutiny of Prime Ministers, national media and national Parliaments — they have a wider margin for manoeuvre'.[214]

107. Jens-Peter Bonde MEP emphasised the role the European Court of Justice had played in extending EU competences.[215] The EP Constitutional Affairs Committee report observes that 'the wording of the Treaties and the history of the single market have often led the Court to defend the most Community interpretation.'[216]

108. Several of our witnesses argued that the EU institutions, especially the Council, were capable of ensuring adherence to the principle of subsidiarity,[217] but we do not share that view, for the reasons given by Alain Lamassoure.[218] We agree with those who have advocated new procedures to enforce the principle of subsidiarity. We therefore seek to answer the following questions:

Is a new definition of subsidiarity needed, and, if so, what should it be?

Should its enforcement be a political or a judicial matter?

In either case, how should it be enforced, and by who, and should national parliaments have a role here?

At what stage in the legislative process should proposals be checked for compliance with subsidiarity?

109. Sir Neil MacCormick MEP defined subsidiarity as 'the principle that decisions should be taken as close to the persons affected by them as is consistent with equity and with efficiency'. He pointed out that there is general agreement about what the principle is but not about how it applies — for example what is equitable and efficient in a particular policy area.[219] The Government does not have a new definition of its own.[220] We encountered some criticism of the Treaty definition,[221] but we do not believe redefining the principle of subsidiarity will contribute much to better application of it.

110. The Minister for Europe told us he had an open mind on whether enforcement of subsidiarity should be by judicial means (through the ECJ) or political means (through some form of second Chamber).[222] The EP's Constitutional Affairs Committee has proposed that the ECJ become a Constitutional Court with the role of enforcing subsidiarity.[223] Sir Neil MacCormick MEP wanted 'a detached and judicial or quasi-judicial arbiter to decide whether subsidiarity as a legal principle is violated or not by some piece of legislation', as with devolved and reserved powers in the UK, and told us that the courts gradually build up precedents which define very broad and general terms, and could do so in respect of 'equitable' and 'efficient' in relation to subsidiarity.[224]

111. On the other hand, Klaus Hänsch MEP regarded subsidiarity as a political rather than a judicial matter because 'in the end you cannot tell people or tell the governments who decided on a European level that this was not possible because of the principle of subsidiarity.'[225] The Scottish Executive's Deputy First Minister supported 'early political intervention' to halt decisions on laws offending against subsidiarity on the practical grounds that this would be faster than involving the ECJ and therefore a better safeguard.[226]

112. Since the principle of subsidiarity is incorporated in the Treaties, it must be capable of being interpreted by the ECJ. However, we believe enforcement of the principle of subsidiarity should be a political matter, for two reasons. The first is the practical one that political enforcement is likely to be faster. The second is that decisions on whether the objectives of a policy would be better achieved at a particular level of government are fundamentally political ones.

113. If there is to be political enforcement of the principle of subsidiarity, or at least political involvement in the process, there are three reasons, in our view, why national parliaments should play a part:

As Alain Lamassoure MEP and others have argued, the EU institutions are not in practice keen on applying the principle;

While many national parliaments strongly favour greater EU integration, they do not have an inherent, institutional interest in transferring powers to the EU level, and could therefore counterbalance the EU institutions;

National parliaments, being generally closer to the people they represent than any EU institution, are more likely to reflect the views of citizens on such matters.

We note that the proposal to involve national parliaments has wide support, most speakers in the recent Convention debate favouring some sort of mechanism composed of national parliamentarians.[227] We believe national parliamentarians should have a role in determining questions of subsidiarity.

114. We consider in the next section of this Report how national parliaments and their members might do this.[228] Here we note that various methods are possible: they (or particular members or committees) might make the decision, might refer cases for decision by another body, or might just advise. If cases are referred for decision by another body, we would favour that body being a political or quasi-judicial arbiter or watchdog, as discussed later.[229]

115. A further question is at what stage in the legislative process any questions of subsidiarity should be raised. The EP's Constitutional Affairs Committee observed that clearing a proposal at an early stage would mean that subsequent amendments by Council or EP offending against subsidiarity could not be remedied, whereas examining a proposal at a late stage might result in months of work being undone. It concluded that examination at a late stage was a better option because it would encourage the Council and EP to adopt a cautious approach.[230] We are not persuaded that an 'either/or' decision is necessary: stopping proposals which offend against subsidiarity at an early stage would prevent much wasted effort, but it could also be possible to scrutinise for subsidiarity problems at the end of the legislative process any changes made to a proposal. We note that the Commission says it is committed to withdrawing proposals 'where inter-institutional bargaining undermines the Treaty principles of subsidiarity and proportionality or the proposal's objectives'.[231]

'Ever closer union'

116. Article 1 of the Treaty on European Union refers to 'the process of creating an ever closer union among the peoples of Europe.' 'Ever closer union' is a legitimate aspiration, and may come about if the people of Europe desire it. However, we do not regard it as appropriate for a treaty to commit the peoples it covers to such a vague and open-ended process. The closeness of the union should depend on decisions made openly and democratically at each stage. Removing the phrase from the Treaties would help to reduce the perception that the EU is engaged in a one-way process towards greater centralisation regardless of what citizens want.[232] The reference to 'ever closer union' should be removed from the Treaties.

190 Treaty of Nice, Declaration 23. Back

192 Q. 111. Back

193 Q. 348. Back

194 i.e. 'living marine resources in the zones covered by the Treaty'. Back

195 This paragraph is based on Convention document SN 1990/3/02 REV3, 25 April 2002, Preliminary reflections on the delimitation of competence between the European Union and the Member States. Back

196 Draft report on the division of powers between the European Union and the Member States ('Lamassoure report'), February 2002, 2001/2024 (INI), pp. 16-17. Back

197 Article 308 EC provides that measures may be taken 'if action by the Community should prove necessary to attain, in the course of the operation of the common market, one of the objectives of the Community and this Treaty has not provided the necessary powers'. Back

198 Speech at The Hague, 21 February 2002. Back

199 Response of Scottish Executive to Scottish Parliament's European Committee's 9th Report, February 2002, p.2. Back

200 Ev 182, 184. Back