Select Committee on European Scrutiny Appendices to the Minutes of Evidence


Memorandum submitted by the Institute of Directors

  In reply to your letter of 20 July 2001 to Nina Wilkins, may I thank you for giving the Institute of Directors (IoD) the opportunity to contribute to your Committee's inquiry into democracy and accountability in the EU and the role of national parliaments. The IoD is a non-political organisation with some 68,000 members world-wide, 54,000 in the UK, whose aim is to help directors to fulfil their leadership responsibilities in creating wealth for the benefit of business and society as a whole.

  We would not claim to be experts on the issues raised in your inquiry but we would nevertheless like to offer our perceptions—from a business representative organisation's point of view. Many of the activities of the EU significantly impinge on business's activities—some helpful (for example, the progress, albeit incomplete, on the Single Market) and some unhelpful (for example, the additional red tape arising from the employment regulations). And, therefore, the way in which the EU operates, its relationship with national parliaments and the allocation of powers between differing layers of government are issues of considerable relevance to us.

  We see a huge contrast between the influence we can bring to bear and the ease of access we have to the institutions of national government (for example, meeting with Ministers and Civil Servants and access to UK government Consultation Documents), on the one hand, and the remoteness of, for example, the Commission and its alien (non Anglo-Saxon) way of operating, on the other. If we were to join the euro (to which we have economic as well as constitutional concerns) the feeling of remoteness from relevant decision-making would, of course, be greatly exacerbated. For this reason alone, even if there were no other, we strongly favour delegating as much of the decision-making from EU institutions to national institutions. We strongly favour a more diverse EU and one less determined to smother nation states in bureaucratic uniformity. (Completing the Single Market, by the way, should be about opening up uncompetitive and closed markets—not more regulation.) Moreover, with the possibility of major enlargement (and the proposed membership of large and relatively poor countries), increased diversity is an eminently sensible way of proceeding.

  May I now offer you our thoughts on your specific questions:

I.  What are the underlying reasons for the apparent "disconnection" between national electorates and the EU?

  The EU is widely perceived to be an alien set of institutions ruling over, rather than representing and working for, the various populations of the member states. The recent referendums in Denmark (on the euro) and Ireland (on the Nice Treaty, which many of the electorate believed to be on the euro) are indicators of the disconnection between people and the EU. There are clear signs that many people feel that the EU legislates and, therefore, intervenes far too much in their lives. (The Irish referendum threw up many a quote along the lines of "we didn't throw off government from London to be replaced by government from Brussels".) In short, many people perceive the EU as harming individual liberty and undermining the sovereignty of their democratically governed nation states.

II.  How can decision making be made more open and governments more accountable for the decisions that they make in the Council? Is it essential for a more open and accountable EU that the Council meets in public when legislating?

  Could we suggest that governments might be required to secure the approval of their negotiating positions from their national parliaments before meetings of the Council of Ministers are held? All ministers should then report back to their respective parliaments after meetings of the Council of Ministers.

  The issue of whether or not meetings of the Council of Ministers should be public when legislating is not the crucial issue. The principal issue, as we have already implied, is for the institutions of the EU as a whole to legislate and regulate less and for more power to be transferred to national governments. The CAP and CFP are prime examples for repatriation.

III.  What should the role of referendums be in the EU? How should the EU respond to national referendums and could there be a role for Europe-wide referendums?

All countries should hold referendums if changes to the Treaties of the EU are proposed. If just one country's electorate rejects any proposed changes, the proposed changes should fall. (And we are watching the developments concerning the Nice Treaty, following Ireland's rejection with some interest.)

  We believe that there is no case for Europe-wide referendums because we view the EU as a group of independently governed nation states and not a political entity as such. Following on from this we would claim that a European Union "electorate", as such, does not exist—there are only the separate electorates of the different nation states of the EU.

IV.  Would election of the Commission or the President of the Commission either directly or by the European Parliament (a) be appropriate or (b) contribute to reconnecting electorates with the EU?

  It would be inappropriate to elect (directly or indirectly) either the Commission or the Commission President. As we have already implied, the powers of the Commission and its President should be curtailed. All members of the Commission should simply be civil servants, working to carry out the instructions of the Council of Ministers—who are clearly and unambiguously accountable to their democratically elected parliaments. Any form of election would strengthen the political pretensions of the Commission and its President because they could claim that they had "democratic legitimacy." Any such an increase in democratic legitimacy would inevitably be at the expense of democratically elected national representatives.

  We believe that this is likely to exacerbate the feelings of "disconnection" and the disillusion with the EU as expressed in the two recent referendums we have already referred to. The main message coming out of the referendums was surely that people want to feel that their national politicians (whom they can "throw out" in a general election) are running, as far as possible, their countries. They would not, therefore, wish to see their national politicians lose more power and influence to the Commission and its President.

V.  Should there be any new institutional arrangements to give national parliaments a more important role in the EU, such as the second chamber proposed by the PM or involvement of national parliamentarians in the Council?

  Arguably, some MEPs are bent on augmenting the power of the EU in general, and the European Parliament in particular, whereas, in fact much of the British electorate would like the EU and its Parliament to do less. Under these circumstances, the number of MEPs should be reduced. As far as the UK is concerned, the European Parliament and its MEPs have little legitimacy and relevance to their lives. The turnout in the 1999 EU elections was abysmal and indicative of just how irrelevant 3/4 of the British electorate felt the European Parliament to be.

  Rather than creating a second chamber or involving national parliamentarians in the proceedings of the Council of Ministers, national parliaments should have greater opportunities to be able to veto some EU legislation from becoming law and/or there should be a greater emphasis on subsidiarity.

VI.  What changes are needed to the EU's legislative process to facilitate democratic scrutiny before decisions are made? For example, is there adequate consultation at early enough stages; and should there be tougher rules on allowing time for scrutiny by national parliaments?

  There does not appear to be sufficient consultation at an early enough stage about proposed EU legislation. National parliaments should either play a greater role in these consultations at an early stage (consulting with interested parties), or they should be able to prevent the imposition of some EU inspired laws at a later stage.

VII.  Could national parliaments play a greater role in informing the public about the EU and its activities and in channelling the public's views to EU institutions?

  The British Parliament probably already does highlight the role of the EU in the life of the UK quite well—though there is too little emphasis on the total impact of EU membership on the lives of British people and business. A good case in point has been the recent debate on the future of farming and the plans for reform. Very little seemed to be made of the restrictions on British agricultural policy imposed by CAP and the poor prospects for radical reform of this policy.

  We do not know in any detail just how the Westminster Parliament already channels the public's views on the EU and related issues to the appropriate institutions. Clearly it has a duty to do so. We suspect the EU's institutions learn more about the public's views from our eurosceptic press.

VIII.  What is the potential contribution of delimitation of competences, subsidiarity and variable speed Europe to reducing any "disconnection" between electorates and political institutions? Would a clear statement of the EU's purpose help? What impact will enlargement have?

  As we have already implied, we believe that subsidiarity and a variable speed Europe could help to reduce the "disconnection" that exists between the various individual electorates of the member states of the EU and its institutions. There is no need for all EU states to adopt the same law in precisely the same way on every single occasion. There should be greater flexibility (diversity in the implementation of legislation so that policies are tailored to local traditions and needs). Unfortunately, to date subsidiarity has been something of a "dead letter" because regulations and laws that should be made at the national level continue to be devised and imposed by the EU institutions. The Information and Consultation Directive is a case in point.

  Publishing a clear statement of the EU's purpose would not necessarily be of much use. Quite probably, the purpose of the EU for some European countries (eg France and Germany) would be fundamentally different from the British view. For example, the EU has principally been about political union for France and Germany (and this includes Economic and Monetary Unions and the Single Currency)—this has never been the case for the UK.

  Even if a statement could be produced that was amenable to Britain's foreign policy objectives, it would, as far as we're concerned, be a valueless exercise unless it gave substantive guarantees that the institutions of the EU would intervene less in the affairs of the member states. Additionally, the European Court of Justice would have to be committed to defending the autonomy of the member states against the centralising ambitions of the other EU institutions. Unfortunately, this seems unlikely to happen. As we have already implied, enlargement should ideally give a fillip to the concept of subsidiarity, encourage tendencies towards a variable speed Europe and increase flexibility and diversity. Increased diversity is an eminently sensible way to proceed. But, in fact, this may not occur. After all, the existing applicant countries are currently required to adopt the acquis communautaire in full and to adopt the Euro as their currency.

IX.  What contribution can be made by regional and local government and devolved institutions in the UK and elsewhere and should the EU have any new institutional arrangements in this respect?

  We would be surprised if the activities of regional and local government in England (and, indeed, the Territories' devolved institutions) significantly ameliorated the alienation that the British electorate feel towards the institutions of the EU. (And we have no reason to believe it would be significantly different in other member states—though we do not follow such governmental issues closely.) The problem is especially acute in England because, as well as having weak local government, the regional bodies have little power—they suffer from a legitimacy problem.

  The EU should not have any new institutional arrangements in this respect. More institutions, bureaucrats and politicians will simply antagonise further the electorates of the member states. The EU should really take heed of the results of the Danish and Irish referendums and devolve power back to those member states that want it.

X.  What is the role of the European Parliament in promoting a more democratic EU? Is there scope for more cooperation between the European Parliament and national Parliaments?

  To an extent, the European Parliament is part of the problem, not the solution. Many people in the UK are opposed to the whole concept of the EU as a super-national body—many polls show a sizeable minority (sometimes even a majority) wishing to leave the EU. Turnouts at elections for the European Parliament in the UK are very low because the institution is perceived to be at best an irrelevance and at worst an alien institution intent on furthering its own objectives (the accretion of more power) rather than representing the electorate.

  Ideally, national parliaments should have greater say over whether EU inspired legislation actually becomes national law.

XI.  How should the debate on the future of Europe be conducted, eg should there be a convention, and if so, how could it be made representative and how should it operate?

  There should not be a convention for the simple reason that it probably cannot be made sufficiently representative of the UK population's views. National governments should discuss what, if any, treaty changes are required. And national electorates should all have an opportunity to support or reject any proposed treaty changes.

  If you have any queries please do not hesitate to contact me.

7 September 2001

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