Select Committee on European Union Minutes of Evidence


Examination of Witness (Questions 728 - 739)

WEDNESDAY 3 MAY 2000

THE RT HON LORD BRITTAN OF SPENNITHORNE, QC

Chairman

  728. Good afternoon, Lord Brittan. It is very kind of you to give us your time, especially as we have dragged you in on a topic which I am sure you would not argue is the top of your portfolio, e-commerce. What we are particularly interested in is looking at Brussels, at the structures within the Commission and indeed within the Council there. I am sure that your previous long experience there is going to be of benefit to us if not necessarily closely associated with the topic of e-commerce. I was wondering if there was anything you would like to say at the beginning or whether we can go straight into questions.

  (Lord Brittan of Spennithorne) Only this. As you know, I am delighted to help in any way. I have looked into the Commission documents and the British Government's document on this subject, although I was really dealing with it in the Commission only in so far as it affects negotiations with third countries. It seems to me that the really important point to have in mind is that in order to handle issues related to e-commerce a comprehensive approach is needed, as well as international agreement, involving national governments and the Commission, and of course industry. It is not one issue but lots of issues and all of the various bodies have their role. Immediately one thinks, does that mean that there is risk of overlap? I do not think there is. I can say this, having had virtually nothing to do with it, that it has been rather well handled and well organised both at European level and at national level so far, although everything remains to be seen as far as the future of this is concerned. That is all I would like to say.

  729. Thank you. That sounds as if it is all fine and running well.

  A. Well, no. There is so much to be done. All I am saying is that the proof of the pudding as always is in the eating, but personally, having no axe to grind on this particular point, I think it has been approached in the right sort of way but it has only been approached so far.

  730. Do you think the reforms which are being sought by Commissioner Kinnock will help or hinder policy co-ordination in the Commission?

  A. They will help, certainly, if they achieve their desired objective. I do not think that they are particularly related to e-commerce but if they make the Commission an efficient body they will help. The only risk, and it is a risk that is well worth taking, is, as we all know, that if you try to reform any organisation the process of reform is time-consuming and energy consuming and there is a risk that while you are doing that, although what you will achieve in the end will be a better result you are devoting a lot of time and effort in doing it and that can hold things up meanwhile. I do not think myself that although that is a risk it is a very great risk in this particular case because knowing the Commission as I do, the people who are actually involved with Neil Kinnock in his reforms will not be the same people who are dealing with this e-commerce work. I do not think it will interfere but it will take some time and if it can be successful it will make the Commission more efficient which will be good for anything that it does, and I fear, as you slightly hinted, that the work on e-commerce will still be work in progress even when the reform process is concluded.

  731. Just on the reform process, I hear rumours that there is a possibility that there could be rather major disputes with the staff there and there could even be the possibility of a strike looming at some time.

  A. What I would say is that if there are no disagreements with the staff then no reform is taking place because whether there is a strike is one question but the fact of the matter is, and I say this liberated from any constraints, that the multiplicity of unions and the attitudes that they have taken have made the reforms that have been contemplated in the past difficult if not impossible to achieve and have certainly frightened many people from embarking on what could and should have been done some time ago.

  732. That is interesting. Beyond that, if you had your time over again and you had the freedom to do it, are there any changes in the structure or co-ordination, the way in which policy is developed, that you would like to be looking for which is presently not being provided for in the current round of reforms?

  A. I think what is being attempted is so substantial and so difficult that it would be my inclination rather than to think of other things that could be done to say let them get on with it and good luck to them. I myself set out in a short compass some of the things I thought should be done in the little book that I published just a couple of months ago called The Diet of Brussels dealing with the crisis in the Commission last year, saying what I thought should be done to deal with it and, just to mention one thing which is not envisaged in Neil Kinnock's report, I would have appointed management consultants to look at the handling of money in the Commission and by the Commission, going through it like a dose of salts. I also suggested, and this is not being wise after the event; it is what I suggested at the time to Mr Santer was, that the root of the problem was not caused by corruption in the Commission, not by Commissioners and not even in the Commission at all, but essentially by the fact that outside agencies were often employed to do things which the Commission could not itself do. That happened for wholly benign reasons because the Council of Ministers would turn to the Commission and say, "We need to do something which is impossible but do it" or whatever, and it was extremely difficult to say, "Sorry, we cannot manage." What I suggested was that we should have a rapid six-month review of all the programmes which we were undertaking and then turn to the Council of Ministers and say, "The following ones we cannot guarantee you will be done properly because we cannot manage them, we have got outside people to do it, and therefore we are going to stop them unless you reorganise things, give the resources that are necessary or whatever, but we are not satisfied that they can be done efficiently and with probity in the way that they are currently being done." Those are two things which are not currently mooted in the Neil Kinnock reforms but which I proposed at the time. As I say, I am extremely reluctant to say, "Why do you not do that?" I think that quite sufficient has been embarked upon for me to prefer personally to say, "More power to your elbow" and to encourage them to take the necessary steps, including confronting staff associations or unions who seem to obstruct any progress.

Baroness O'Cathain

  733. I was very interested, Lord Brittan, in your last comments because it seems to me it is a microcosm of the classic problem of outsourcing and management of contracts for large organisations throughout the world. I do not think there is enough emphasis on co-ordination within organisations and building up the co-ordination function and the monitoring function in organisations. Perhaps that has some relevance to the European Union along the lines that you were saying.

  A. Absolutely. I do not think that the Commission is in any way unique as far as this is concerned.

  734. Probably not, unfortunately.

  A. It is not unique, but of course the political pressures to do things which you know you cannot necessarily properly control is perhaps greater in something like the Commission.

  735. Going back to the e-commerce issue, as I see it you really have an interest, or at least you did when you were in the Commission, and with your knowledge of the Commission you will be able to help us on three different issues of e-commerce, first of all as a user of e-commerce, and I think you were talking more or less in answer to my Lord Chairman's question about making the Commission itself more efficient. Was that what you were actually saying?

  A. Not only more efficient in the use of e-commerce but also in handling policies related to e-commerce to the extent that the Commission is generally more efficient it will be more efficient at handling those as in handling anything else.

  736. In other words the Commission's second leg of the three-legged stool is the promotion, the promotion of e-commerce.

  A. Yes, the promotion of it but essentially at European Commission level. There are a number of things that the Commission is being asked to do or volunteering to do. There is some legislation which the European Council have encouraged to be accelerated in some ways, and indeed there is a very interesting example given in that the UK, which has not always been at the forefront in wanting more Commission activity or more legislation, is asking for more legislation than other Member States would want. There is the process of benchmarking and monitoring and exchange of information on best practice which the Commission is best placed to co-ordinate, and there is the spending of money and the re-focusing of such expenditure in areas such as research and structural funds. That is the third one. There is the use of competition policy for example on leased line interconnection pricing and competition policy can often accelerate the legislative process. This was very notable in the telecommunications area where I was involved. Finally of course it is the Commission that is responsible (and this is the only area where I was directly involved as opposed to just being a member of the Commission), where there is a negotiation internationally of those matters which are required. For example, the Americans were very keen in the context of WTO negotiations on an international commitment that there should not be taxation of any kind of the use of e-commerce. That is a lovely statement just put baldly but of course it covers a multitude of complexities. None the less there will be an element of international negotiation on these matters which go beyond even what the European Union can do even if it got its own act together, and there of course the Commission on behalf of Member States will conduct those negotiations. In those five ways the Commission is going to be involved one way or another in handling e-commerce related issues.

  737. And of course the regulatory issue is probably the one where people are more worried because the development of e-commerce is happening at such a fast pace. The Americans seem to be taking their hands off in terms of regulating it whereas there is a fear that the Commission or Europe with more Member States is going to be too regulatory.

  A. There considerable progress has been made even in the negotiations with the United States because essentially it is the data protection legislation which has already been passed which was the cause of concern that under that legislation information could not be handed over to those who did not have a comparable degree of protection of the rights of the individual against the use of data relating to them. Of course the United States has relied on self-regulation. After a very lengthy negotiation an agreement has been reached between Europe and the United States on this which would prevent the stopping of the flow of information under the directive that Europe has passed because the United States as it were would be recognised as having through a different route achieved a comparable degree of protection.

  738. Do you think that with the uneven development of e-commerce in the Member States of Europe, whereas we are perceived to be quite ahead of the game, with particularly Finland and the Scandinavian countries being ahead of the game, there is a danger of our being held back in terms of a pan-European development by a certain amount of resistance in France and in Germany where we have always thought that they were the leaders in so many things, but this is the perception and I think it can be backed up by statistics?

  A. There is no doubt at all that we, along with countries like Finland, are further ahead than many other countries but I do not think it is a question of being held back. The very fact that we have got that far ahead shows that we are not being held back. The question rather is whether through the kind of action that was envisaged both in the Commission document and the Lisbon European Council the rest of Europe can advance further. We can advance beyond where we have got and collectively we can engage in handling international issues. If all that can be done we will benefit greatly. There is no question about that. I do not think anybody is holding anyone back. It is just a question that we have got further ahead and can we collectively advance? Obviously in a way it is a single market issue. If we can achieve a single market here which is effective we will advance economically quite considerably.

  739. "Held back" is probably the wrong terminology. Is it possible to co-ordinate e-commerce policy for the whole of Europe when people are at different levels of experience and development?

  A. My view is yes, I think it is possible, for the very simple reason that the ones who are less well advanced realise that Europe has got to move forward on this issue if it is to achieve anything.


 
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