Select Committee on European Communities Eleventh Report


B. CASES WHERE EFFECTIVE SCRUTINY HAS NOT BEEN POSSIBLE

31. PRELIMINARY DRAFT BUDGET OF THE EUROPEAN COMMUNITIES FOR THE FINANCIAL YEAR 1998

Letter from Lord Tordoff, Chairman of the Committee, to Helen Liddell MP, Economic Secretary to the Treasury

  Sub-Committee A and the Select Committee have scrutinised COM(97)280 and your Explanatory Memorandum of 17 June on the Preliminary Draft Budget of the European Communities for the financial year 1998.

  Since 1994 the Select Committee has, annually, at this time of year, complained to the Government about the inadequate time given to national parliaments to scrutinise the PDB documents. In a typical year the documentation (some 1,600 pages) is deposited in Parliament in the second half of June and the first Budget Council takes place before the end of July.

  On this occasion the timing is similar to that in previous years, but rather than complaining once again about the impossibility of effective scrutiny of the PDB, we wish to make what we hope you will see as a constructive suggestion deserving your vigorous support.

  Our suggestion is that the Government should urge upon the Council, and the other European Institutions concerned, that the Budget is in a quite different category from other proposals. The volume and detail of the PDB documents means that a four week period between the documents being available to national parliaments and the first Budget Council is too short for adequate scrutiny. A different timetable altogether is required if effective scrutiny by national parliaments is to be made feasible. One option would be for the PDB documents, in full and in English, should be produced some two months earlier, and be deposited in Parliament in April rather than June. Another option would be for the first Budget Council to be moved back from the present time of late July to some time in the autumn. These options are not mutually exclusive and could be combined.

  The timing changes we are suggesting would make a worthwhile difference to the possibility of serious scrutiny being given to these important proposals. However, we are aware that the scale of the operation would remain such that, with the Select Committee's current resources, only a limited improvement could be made. We intend, therefore, to give further consideration to the most effective way in which parliamentary scrutiny could be given to the PDB.

23 July 1997

Letter from Helen Liddell MP, Economic Secretary to the Treasury, to Lord Tordoff, Chairman of the Committee

  Thank you for your letter of 23 July raising the scrutiny reserve on the Preliminary Draft Budget of the European Communities for the financial year 1998. You made some suggestions for altering the timetable of the EC budget process. I am sorry not to have responded to these earlier.

  As you say, the EC Budget poses particular problems for scrutiny given the volume and detail of the Budget documents. Ideally, in view of this, Parliament would have more time than it does at present to consider the Budget. Unfortunately, it is the very size and complexity of the Budget itself, and the process by which the Budget is finally adopted (requiring two readings by the Council of Ministers and the European Parliament), which means that the time available for each stage of the process is strictly limited.

  For example, although the main lines of the Preliminary Draft Budget are settled at the end of April, it takes inevitably several weeks to prepare, translate and publish the thousands of pages of documentation from the original working papers. Looking towards the other end of the Budget process, previous experience has shown that if the Council's first reading of the Budget is not completed by the end of July there is simply not enough time to complete the remaining three readings of the Budget (two by the European Parliament and one by the Council) in a satisfactory way.

  In short, the present timetable represents a fine compromise between the needs of all the actors in the budget process and demands a considerable effort from each one in meeting the deadlines imposed. I therefore do not see any possibility of the sort of major reworking of the Budget timetable that you suggest.

  Equally, though, I do think that there are ways in which the scrutiny process would be improved within this overall framework. These might include making more use of the unofficial french working documents, which contain all the basic information about the Budget and which are available slightly earlier than the published PDB. I am also considering how we might improve the content of the explanatory memoranda on the Budget, perhaps by distinguishing between the impact of decisions taken at the Budget Council and those made in other fora - such as the Agriculture Council, or during the setting of the financial perspectives. As you are no doubt aware, the House of Commons European Legislation Committee is preparing to review the scrutiny of the EC Budget. I hope your Committee will be closely involved in this.

4 November 1997

Letter from Helen Liddell MP, Economic Secretary to the Treasury, to Lord Tordoff, Chairman of the Committee

  I attach an Explanatory Memorandum on the Commission proposal for a Letter of Amendment to the Preliminary Draft Budget for 1998 [not printed].

  The reason I am writing is to inform you that, for unavoidable operational reasons, the Government will have to take a decision on this at the latest at the 27 November meeting of the Council. This is likely to leave little time for further scrutiny of this document should you decide this necessary.

  The timetable for agreeing rectifying letters is normally very tight and in this case the reason is that the Commission's revised forecast of agricultural expenditure has been delayed until the latter part of the budget process, so as to provide the most up-do-date figures before the adoption of the Budget. The 27 November Budget Council is the latest possible date for the Council to consider this as the letter forms part of the 1998 EC Budget process.

  While I regret this leaves so little time for scrutiny, I would stress the benefits to good budget discipline of ensuring that the figures contained in the agriculture budget reflect the most up-to-date forecasts. I would also like to underline the fact that this document is of a technical nature and has very limited financial and policy consequences for the United Kingdom.

  However, with the aim of giving Parliament the fullest possibility to comment on this proposal I have included it as a relevant document for debate in Commons Standing Committee B on 19 November. I will of course be happy to provide your Committee with any further information on this document should you consider this necessary.

13 November 1997

Letter from Lord Tordoff, Chairman of the Committee, to Helen Liddell MP, Economic Secretary to the Treasury

  Thank you for your letter of 13 November with which you enclosed an Explanatory Memorandum on the Commission proposal for a Letter of Amendment to the Preliminary Draft Budget for 1998.

  I note that you say that, for unavoidable operational reasons, the Government will have to take a decision on this at the latest at the 27 November meeting of the Council. I also note that you underline the fact that this document is of a technical nature and has very limited financial and policy consequences for the United Kingdom.

  In the circumstances, I am prepared to agree that the proposal requires no further scrutiny. I am passing your letter and the Explanatory Memorandum to Sub-Committee A, for information.

November 1997


 
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