Select Committee on European Union Forty-Ninth Report


Letter from the Minister, Dawn Primarolo, to the Chairman

ENERGY PRODUCTS DIRECTIVE

  I am writing to update you about the progress on the proposal for an Energy Products Directive. I sent a signed copy of an Explanatory Memorandum to both Scrutiny Committees on 26 November based on the latest working version of the Presidency text. The EM cleared the House of Common Scrutiny Committee on 26 November. The House of Lords Scrutiny Committee sifted the EM to Sub-Committee A for further discussion to take place on 3 December.

  There was a further high Level Group meeting on the 26 November, where some delegations could still not accept the Presidency's suggested compromise. But, if Member States are prepared to show greater flexibility at ECOFIN, there is still a realistic chance that political agreement could be reached on 3 December.

  Given this proposal has been subject to very difficult and intense negotiations, and that the latest text meets the UK's principles and concerns as outlined in the EM, it would be beneficial for the UK to be able to agree to this text. I am therefore taking this opportunity to inform you that the UK intends signing up to this proposal if the situation arises at ECOFIN, provided there are no substantial changes to the current working text.

  I will, of course, update you on the outcome of the 3 December ECOFIN Council.

29 November 2002

Letter from the Chairman to the Minister, Dawn Primarolo

  Sub-Committee A considered your EM of 26 November at its meeting on 3 December and decided to clear the document from scrutiny. However, the Sub-Committee is extremely unhappy about the way in which they have had to consider this energy products directive (EPD) and in particular about the incredibly short period of time allowed for parliamentary scrutiny of the latest text of this proposal.

  You last wrote to the Sub-Committee about the Spanish Presidency compromise text of this proposal on 11 June 2002, in a letter concerning the biofuels directive. In that letter, you said that the Government were "confident of reaching a deal" on both dossiers at Ecofin on 19 June.

  Since then, the Sub-Committee have heard nothing on the EPD. Your EM of 26 November was the first notification the Sub-Committee had from you that agreement had not yet been reached on the EPD and that a Danish Presidency compromise existed. Moreover, your EM informed us that the EPD was going to Council on 3 December—only a week after your EM—and the morning of our meeting. This is an inadequate period for conducting parliamentary scrutiny.

  I would be grateful if you could answer a number of questions. Why was the Sub-Committee not given more time to scrutinise the latest text? When did the UK first find out that the Danish Presidency was preparing a compromise text? Can you confirm that no discussions took place between 19 June and the drafting of your EM about which the Sub-Committee should have been informed? Why could pressure not be put on the Presidency to carry over the proposal to the term of the next Presidency, in order to allow the full amount of time for parliamentary scrutiny provided for in the Amsterdam Protocol? I hope that, in future, as greater co-ordination between successive Presidencies is encouraged, the Government will endeavour to ensure that such pressure can be more vigorously applied or that the pressure to agree a text under a particular Presidency will be reduced.

5 December 2002

Letter from the Minister, Dawn Primarolo to the Chairman

  You wrote to the Paymaster General on 5 December 2002, following the consideration of an EM dated 26 November, by Sub-committee A. In that letter, you informed the Paymaster General that the Sub-committee had decided to clear the document from scrutiny, but that it was extremely unhappy about timing and handling aspects. You therefore raised a number of questions.

  By way of background and as was reported in the last EM, the original Commission proposal for a Council Directive on Energy Products cleared both Scrutiny Committees in 1999. Very little work was then undertaken on the proposal until the Spanish Presidency produced draft guidelines during the first half of 2002 (with a view to informing future work on the Directive). The guidelines were not depositable but they were the subject of the Paymaster General's letter of 21 May 2002. These guidelines rather than the text of the proposed Directive itself, then become the principal focus of discussions. The aim of the Spanish Presidency was to reach agreement on the guidelines, so that they could then be reflected in a revised version of the Directive to be produced by the Danish Presidency. However, although these guidelines were discussed at ECOFIN in May and June, no agreement was reached.

  The Danish Presidency therefore took the work forward through two separate strands.

    —  With regard to the Spanish Presidency guidelines, in September the Danish Presidency produced an orientation paper (which was not depositable). This set out the remaining outstanding issues on which agreement was still to be reached in respect of the guidelines. These issues were the subject of discussions at ECOFIN in October and November. The issues for the UK remained as set out in the Paymaster General's letter of 21 May 2002, the UK's key concern being the need to be able to continue to apply the UK's exemption for domestic use of energy, which was unaffected by the Danish paper. This work took far longer than expected to complete because some other Member States used the discussions as an opportunity to put forward their own particular priorities.

    —  With regard to the Directive itself, the Danish Presidency produced a working paper in July 2002 with a draft text of the Directive. This was based on the original Commission proposal (which had cleared scrutiny), amended to reflect those parts of the Spanish Presidency guidelines on which consensus had been reached in earlier discussions, including the option to exempt domestic use of energy. It did not deal with those areas of the Spanish Presidency guidelines on which there was no agreement. In substance therefore, both the Presidency paper and the UK position were still as set out in the original EMs and the Paymaster General's letter of 21 May.

  The expectation was that the Commission would eventually put forward a revised proposal to a subsequent ECOFIN for political agreement. In the event, the Danish Presidency produced a further revised version of the text on19 November. This version, which took non-fuel uses and dual uses of energy products outside the scope of the Directive, was reflected in the EM submitted to the Committees on 26 November. At that time the expectation was still that the draft text was likely to change further, but as the horse-trading of some other Member States was nearing conclusion, it seemed likely that political agreement might be reached in the not too distant future. In the event the two strands of work finally came together in a revised text produced on 29 November with a view to reaching agreement at ECOFIN on 3 December. This text did not make changes of significance on any points of concern to the UK.

  In a letter dated 29 November 2002, the Paymaster General updated you ahead of ECOFIN on 3 December, highlighting that the UK might have to sign up to political agreement before your committee had time to give scrutiny clearance. In the event political agreement was not reached on 3 December, nor was it reached at the subsequent ECOFIN on 11 December. The Energy Product Directive is now on the agenda for ECOFIN on 21 January and it is possible that agreement will be reached then.

  In summary, and to deal with the specific questions you raised in turn:

Why was the Sub-committee not given more time to scrutinise the latest text?

    —  The tight timing was in part due to the fact that work on this issue from October onwards was very fast moving and at times confused. There were also no changes of significance for areas of UK concern until the 19 November version of the text. The difficulty was therefore which draft of the Presidency text to use as a basis for submitting an EM. We deposited on the Presidency text of 19 November without a final Commission text since it seemed likely that political agreement would be reached soon. This was submitted with an EM (unnumbered) on 26 November, which was the earliest date possible, given the need for Ministerial attention to be focussed on the pre-Budget report. When it became clear that agreement might be reached at 3 December ECOFIN, the Paymaster General, in a letter of 29 November, wrote to the Scrutiny Committees to inform them of that possibility.

When did the UK first find out that the Danish Presidency was preparing a comprise text?

    —  The first (July) version of the Danish text was based on the original Commission proposal and those parts of the Spanish Presidency guidelines which had already been agreed. At that time, therefore, the position was as set out in the Paymaster General's letter of 21 May 2002.

Can you confirm that no discussions took place between 19 June and the drafting of your EM about which the Sub-committee should have been informed?

    —  The guidelines were the subject of discussions at ECOFIN in October and November, as reported in the ministerial letter and parliamentary question on these meetings. Although it was not until 29 November that the two strands finally came together in full in the draft text of the Directive, and it was not until the previous version (19 November) that there was any change of substance from a UK perspective, there is no doubt that a prior update for the Committees would have been desirable.

Why could pressure not be put on the Presidency to carry over the proposal to the term of the next Presidency, in order to allow the full amount of time for parliamentary scrutiny provided for in the Amsterdam protocol?

    —  The Danish Presidency desire to reach political agreement at the December ECOFIN was driven by the Barcelona and Seville Council remit for agreement to be reached by end 2002. Given that the Presidency text meets UK requirements, it would not have been in UK interests to ask the Presidency to postpone agreement. In the event, political agreement has still to be reached.

  I hope this provides the answers to the questions you raised.

9 January 2003

Letter from the Chairman to the Minister, John Healey

  Sub-Committee A considered your letter of 9 January at its meeting on 21 January. The Sub-Committee is grateful for your response to its questions and notes that you recognise that updating the scrutiny committees of developments on this proposal at an earlier stage would have been desirable. Given that this is not by any means the first example of a Government failing to keep our Committee informed of developments, your response is encouraging. I hope that you will ensure that the difficulties involved in keeping the committees informed and up-to-date on this dossier will be avoided in the future when your department is dealing with other proposals.

22 January 2003


 
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