Select Committee on European Union Minutes of Evidence


Examination of Witnesses(Questions 20-35)

MR DENIS MACSHANE MP, MR SIMON FEATHERSTONE AND MR NICK BAIRD

TUESDAY 26 NOVEMBER 2002

Lord Scott of Foscote

  20. I wonder what part the Eurodac fingerprinting system is going to have in enabling illegal immigration into the European Union to be identified and controlled? As I understand it the system is supposed to be instituted early next year. I have heard expressions of disbelief as to whether it will be practical to expect the Member States on the eastern boundaries of the Union to intercept and to put through the Eurodac fingerprinting system the influx of immigrants in their areas, bearing in mind that if they do that they will have, under the proposed Dublin 2 Convention, the primary responsibility of dealing with their asylum applications. What is the current thinking on these problems?
  (Mr MacShane) My Lord, I am stumped and I fear my officials might be stumped. We will have to write to you on the Eurodac fingerprinting question directly. Generally on immigration past experience has shown that enlargement has, if anything, led to a decrease in immigration. In France, for example, in 1986 there were 109,000 Spanish citizens working. In 1996 that number had gone down to 35,000. Oddly enough, I believe that as the accession states join the European Union their people will want to stay there, investment we hope will flow there, trade will flow there, but the control generally on people movement is an enormous issue. The fingerprint system was the guaranteed single solution. I fear I do not have it much more firmly in front of my mind but if my Lord will permit me I will send him a note on this.

Chairman: Thank you very much indeed, Minister. We will look forward to that. Now, I am afraid that there is no escaping the CAP in a conversation like this and Baroness Billingham has a question on that.

Baroness Billingham

  21. First of all, Minister, a very warm welcome to you and yes, I am going to have to bring you back to this crucial and central issue of the common agricultural policy which the majority of us in this room seem to have been discussing for many years. Just by chance, Sub-Committee D, of which I am a member, has just concluded a report on the common agricultural policy. The thing that struck me most was the great divergence of the opinions that came and I hope that the report will cross your desk at some time and you will have a look at it because not only would the conclusions make interesting reading but the opinions that were contained within them were absolutely fascinating. My question is against the statement in the House of Commons on 28 October which followed the Brussels European Council when the Prime Minister said, "Fundamental CAP reform remains on the agenda", so my question to you is, what is the Government's latest view with the Copenhagen Summit only three weeks away?
  (Mr MacShane) One of the difficulties with the CAP is that there is almost no division within the British political community, if I may put it like that, on that issue. From the Trotskyist Social Worker to the Daily Mail there is complete unity on CAP reform. Even our Conservative colleagues will agree with Labour colleagues. Perhaps there are one or two members of the NFU who might be slightly nuanced but I am not an expert on that matter. I have often thought that we really should not talk to ourselves about CAP but learn to speak French, Italian, Spanish, Irish and take the argument out to partners elsewhere. I am encouraged by statements, for example, from Commissioner Lamy, that France needs to reform the CAP, editorials in Le Monde on why CAP does not make sense, but I am also discouraged when in Spain, Italy and other European countries at the most extraordinary commitment to CAP, not from horrible bad protectionist people but from people who see that preserving the Tuscan countryside, the small hill vineyard farmer in Spain and so on is important. We have to keep up that pressure. What I can report to you is that an important achievement out of the Brussels discussion was that efforts to drop reference to the mid term review, to the Fischler proposals, were defeated, efforts not to include reference to the Doha round were defeated, so the mid term review is there on the table. We want to see an evolution of CAP. We want to see CAP reform quite quickly but if you say to every one of our partners from this day to the next, "we are going to abolish it", we will not get very far. We have got unavoidable international obligations as a Union in front of the Doha round, the financing of the sustainable development process in Cancu«n next year, the obligation to take forward the Johannesburg sustainable development process, to look at agricultural subsidies world wide. These are legal obligations, not just political declarations, and Britain will be in the forefront of trying to build a greater consensus around CAP. I am asking all my friends and colleagues of all parties and all persuasions not to debate inside this country CAP reform but to take the argument out to our European partners to build a better consensus on that.

  22. Can I just ask one supplementary to that. Do you see any lessening of the link between enlargement and CAP? It has always been thought this was part of the same equation but do you see any change in the philosophy now?
  (Mr MacShane) Obviously what was agreed at Brussels was that CAP spending would only increase by one per cent, which would be less than inflation, annually up to 2013. So the same amount of money is now going to be spread over 25, not 15 nations. I think by definition that dilutes the impact of CAP. I constantly, at literally every discussion I have with applicant countries, say "Look, at the moment, to quote Oxfam, CAP provides a subsidy of $2 a day to every cow in Europe. I am a great lover of cows but I would rather we put a bit of European money into human beings, what about it? If you want to keep subsidising your cows, we are not going to have a great future". I will not say I am always listened to but I will maintain that position and so will others. The real trick is for Oxfam to produce their reports in French, for our churches to produce their reports in Italian and persuade the churches in Italy to support CAP reform. On the political consensus, I think there are some hopeful signs but if it is an in your face drop dead on CAP tomorrow, we will not get very far.

Lord Williamson of Horton

  23. This is an equal opportunities committee and I follow on from the noble Lady, Baroness Billingham. You will have seen that some academics have suggested that there could be a link with the UK abatement and, they ask why do we not reconsider the UK abatement. Your own comment when you said that many Member States have an extraordinary commitment to the CAP implies to me that you agree with my view which is that most of the Member States are not primarily concerned about the money, although they are concerned about it, but they are most concerned about the way in which the CAP supports farming and social objectives. It would seem to me that any re-negotiation of the UK abatement would be batty in these circumstances but I would like to know whether you can confirm that that is the position of the UK Government.
  (Mr MacShane) The rationale for the abatement has not changed since it was introduced. The figures on European Union financing of budgets are not necessarily the clearest in the world, my Lord, but Britain has been a net contributor and France, until very recently, has been a net beneficiary under the European Union budget and I make the point that over most of those years France was technically in GDP per capita terms a richer country than Britain and the French understand the concept of fair play just as we do. If the abatement were to go we could be contributing as much as 13 times as much as France to the European Union. We have produced detailed figures, columns, charts. I have been as robust as I can, because this has been raised by applicant countries, in saying even with the abatement Britain actually is a net contributor and, as I said at the beginning of my remarks, if you reduce the European Union to a corner shop profit and loss account, a zero sum game, we will all be losers.

Chairman

  24. Would you then confirm that the abatement will not be on the agenda when we come to discuss the new financial framework for 2006-13? Is it still taboo and will it still be taboo then?
  (Mr MacShane) I think the British position is very unlikely to change. I do not want to use the word "never". I think a Foreign Minister did use that word once in the House about the independence of Cyprus in 1956; he did not last long and Cyprus is now independent. The arguments, justification, the rationale remain as strong today as in past years.

Chairman: Thank you.

Lord Williamson of Horton

  25. Could I just make this point that as far as the CAP is concerned, I am utterly convinced, firstly, that you should not put into the negotiation the UK rebate and, secondly, you will get absolutely nothing for it in relation to CAP.
  (Mr MacShane) My Lord, advice from all quarters is welcome but advice on that issue from that quarter is more than welcome.

Lord Cavendish of Furness

  26. Minister, I have an interest as a farmer and take advantage of the CAP without much pride. This is always discussed in such a measured way, understandably without much passion. The Prime Minister talks about it remaining on the agenda as CAP reform. Your language is equally measured. Would you agree with me that the voter, whom we have already touched on, is increasingly seeing the CAP as damaging to the environment, fraudulent, immoral, unacceptable in many ways and discredits the EU in general? Could there not be a more robust approach to the question of the reform of the CAP?
  (Mr MacShane) My Lord, does going through the thesaurus of very strong adjectives convince the people who take a different position? I am not sure. I have used robust language in the past, do and will do in the future. I was very interested in the Countryside Alliance march which was an extraordinary manifestation on the streets of London and one of the very clear demands, it seemed to me, was for more agricultural support in a bigger CAP rather than a smaller one. I did not see any posters there calling for an end to CAP, transfer payments or subsidies. What we have to do is to build a case, particularly locating it in terms of Third World Development. Sorry to quote myself this morning, having heard a kind of justification of CAP from a Polish interlocutor. You cannot dump wheat or beef on the market of Africa at a subsidised price that undercuts local production and then not expect the local farmer, peasant, not to say "If that is the European Union's approach, I will up sticks, get myself up to the shores of Europe and smuggle myself in and become an illegal immigrant or an asylum seeker". We have to set it in the wider international context. That is what I can promise the Committee I will try to do as Europe Minister, that is what the Prime Minister seeks to do. The finest figures on this I have read in French publications but they were figures, they were facts, they were not angry, stentorian language, I leave that to the Socialist Worker and the Daily Mail.

Chairman

  27. I would like to move on, if I may. We have a couple of questions on the internal market, one which I would like to put to you and one from Lord Woolmer, who is Chairman of the Energy, Industry and Transport Sub-Committee. We have noted that the City of London has sent a very interesting memorandum to Commissioner Bolkestein—I think that Sir Nigel Wicks and Dame Judith Mayhew were the principal authors—saying that there really has to be a big political push behind the development of the Financial Services Action Plan, which seems to have been with us as a discussion topic almost as long as the CAP and appears to be dragging a bit. They are also saying that it is absolutely essential to put market based policies at the heart of the financial services programme. Do you feel that it is dragging and do you agree that we should give it a big political push?
  (Mr MacShane) Very much so, my Lord. One of my disappointments in recent years has been that although I think Britain has been in the forefront of leading the drive for economic reform and the opening up of markets—and let us in passing welcome the report at least in the press today that there is agreement on energy market liberalisation—we have not always had as much support as I would wish from other Member States or had a really effective champion, for example, in the Commission. The financial services action plan is an example of where we need to get capital markets freed up and we need to see money flowing where it can best earn a return, where it can best generate new economic activity and, above all, jobs in Europe. I will be meeting with my French and German opposite numbers on Friday. I can assure the Committee that that will be one of the key points I will be making to them.

Chairman: Thank you very much. Lord Woolmer?

Lord Woolmer of Leeds

  28. Minister, the European Court, as you know, on 5 November ruled that a number of bilateral agreements, including Bermuda II, fall foul of EC Treaty rules. What is the Government's reaction to this and how do you see things moving forward in that area?
  (Mr MacShane) As with all ECJ rulings, one has to look at them very carefully. We are of the view that the ECJ decision does not preclude Member States from continuing to negotiate bilateral air services agreements provided that certain conditions are met. In particular, so-called nationality clauses in bilateral agreements that favour airlines owned and controlled by nationals of the signatory country compared to other Community carriers have been found to be in breach of Community law, so we will continue to seek liberal air services agreements with our bilateral partners in the interests of users and UK operators but only where it is possible to incorporate the destinations of carriers owned by nationals of any EU Member States. I have to say, equally, that one of the things that concerns me is the protectionist ruling under US law that foreign majority holdings cannot control a US airline. In fact, I think the upper limit is 25 per cent. We have to keep negotiating for a full liberalisation of air traffic including cabotage but we need equal reciprocity from our friends across the Atlantic.

  29. Do you think that is best achieved—and I entirely agree with the objective—by having a common European Union position in negotiation with the United States or in bilateral discussions?
  (Mr MacShane) Both are relevant. We are moving, we hope, towards a "single skies" agreement which will take us further forward. The discussions will be in some detail at the Transport Council towards the end of next week and this is technical, it is on-going and I can certainly ask for a report from that Transport Council to be made available to members of the Committee.

Chairman

  30. Minister, would the Government oppose giving the Commission a mandate to negotiate on behalf of the Community as a whole.
  (Mr MacShane) It is one of the options in discussion between the Commission and Member States. We have got to decide what is the best way forward with respect to British interests. Personally, and I think I speak for the Government, I am not saying that it should be ruled out under all conditions or it is automatically the best way forward, but one of the important issues is how much time it would take to reach Community level agreement with the United States. Members of the Committee refer to the slowness of other negotiations and if we have to protect British interests best by bilateral agreements within the scope and range of EU case law following the ECJ decision then obviously we should seek to do so.

Chairman: Minister, I am moving on. As you may know, Lord Jopling chairs the sub-committee dealing with the common foreign and security policy and I know he has a couple of questions for you.

Lord Jopling

  31. Minister, can you tell us first of all where you think the NATO summit at Prague leaves ESDP, particularly with renewed proposals for a NATO rapid reaction corps, which in some way parallels the ESDP proposals and also if you can bring us up-to-date on where you see ESDP now? How far has it developed beyond what was rather cynically described earlier on as having the capability of getting cats out of trees? And to what extent does the Turkish block still slow down the development of ESDP? To what extent do you think we are escaping from the trap which to some of us seemed a likely outcome of the ESDP in the early days that it was to be left to the French and British to fill the body bags whereas the Danes and Belgians would provide the hospitals and cook houses?
  (Mr MacShane) I am not sure I have in my mind a count of serving soldiers of the different European armed forces who have died in combat or peace-keeping operations, whether as a result of action, mistakes or the things that happen to soldiers. I am not entirely sure that we should be that dismissive of the professionalism of other European Union countries. I certainly saw that in the Balkans and I think British soldiers and officers would respect the contribution that they make. On a broader question, I actually thought the Prague NATO summit was very positive from the ESDP point of view in that it came up with a united agreement on the proposals to create a NATO rapid reaction force, including obviously France as a member of NATO, and underlined again the point that ESDP and NATO are complementary, not rivals. That is a point continually stressed by our American partners who, if anything, want Europe to shoulder more of the defence and humanitarian and peace-keeping operations that soldiers have to take part in. You are quite right to draw attention to continuing problems in Turkey before they arrived in Ankara and in Athens on the deployment of NATO assets which we insist are necessary before men can be put in the field and a great deal of discussions and pressure, if I can use that term, I do not know how diplomatic it is, have been put on partners in Ankara, not just in Europe but from across the Atlantic to allow the ESDP to move forward.

  32. Is not the Turkish block on ESDP partly connected to what I asked you about earlier—Turkish accession—and if you were the Turkish Prime Minister you would not lift the block on ESDP until you had got a firm date on Turkish accession, would you?
  (Mr MacShane) I am not the Turkish Prime Minister and in a sense there are always linkages of one sort or another on all aspects of Europe, NATO and accession—political questions. I think that Europe and, as I say, our partners in the United States want the ESDP to be operational as soon as possible. It makes sense. It is not about cats out of trees, it is about very, very serious work which I am sure many members of the Committee have seen on the ground and it is something that Europe needs to take forward.

Chairman: Minister, I think on the theory that sometimes the longest questions are capable of producing the shortest answers, we have got time for a final question to put to you which is on the nuclear industry. A little earlier in our conversation you were recalling the fact that the top-up package, the sweetening package, contains 600 million euros for nuclear safety in the acceding countries. I know that my colleague, Lord Woolmer, has a question he would like to ask about nuclear safety.

Lord Woolmer of Leeds

  33. I hope that you may have had advance notice of the question because it is a rather detailed one. Because the details are so important I hope you do not mind if I repeat it to you now. On 6 November the Commission presented proposals to establish common safety standards for the nuclear industry; to guarantee the availability of funds for dismantling nuclear reactors; and to oblige Member States to decide upon the burial of highly radioactive waste. In a separate proposal linked to nuclear materials with Russia, the Commission also decided to raise the ceiling on Euratom loans to finance safety and dismantling projects in former Eastern bloc countries. The Commission appears to some observers to be using enlargement to promote a proactive nuclear policy in the EU. How does Her Majesty's Government see this?
  (Mr MacShane) Well, my Lord, we accept that some of the measures being proposed by the Commission are needed to deal with issues that arise from EU enlargement, for example the suggestion that Euratom loans be standardised between existing Member States and those seeking to join. We remain to be convinced that enlargement has created a need for EU specific safety standards. All of the accession states are members of the IAEA and parties to the Convention on nuclear safety, whilst their individual safety commitments to the EU will be fully enforceable under the Accession Treaty and the EU's nuclear regulators are very clear that the IAEA non-mandatory standards are sufficient to deliver nuclear safety within the EU. To bring it back to the political question that you asked me, my Lord, it is for each country to consider its own choice of fuel for its national energy needs. Knowing, for example, the difference between France and Germany on nuclear fuels, the incredible demonstrations against the transport of nuclear fuel through Germany on its railways, which are very, very rarely reported in our press but if you read the German press or watch German television they are huge events of mass demonstrations, I think the idea that there is an EU Commission proactive nuclear policy being promoted is not right. The Commission's proposal should reflect the fact that each of our individual nations has got its own difficult choices to make on the balance of fuels to be used to produce national energy needs.

  34. Finally, my Lord Chairman, matters such as the burial of highly radioactive waste as a means of disposal, the potential reprocessing of nuclear waste, are extremely sensitive matters clearly in the former Soviet bloc, but in this country too. How does Her Majesty's Government see that particular aspect of the Commission's proposals?
  (Mr MacShane) As I said, we are of the opinion that the International Atomic Energy Agency safety standards are the ones that can deliver nuclear safety within the EU and we believe strongly that this is not actually a European Union only problem, it is an international problem. My Lord Woolmer referred to Russia and there are other nuclear stations in different parts of the European Union which are facing decommissioning under pressure from the Union as part of the accession procedures. It is an international problem and it is within each nation's competence very much at this stage to decide within the international safety rules on the nature of the fuel sources that they provide to obtain their national energy needs.

Chairman: Minister, I crave your indulgence for one minute longer. I am conscious of the fact that I omitted to invite Lord Jopling to put a question to you about our relations with the United States.

Lord Jopling

  35. I am sorry, my Lord Chairman, I did not realise you wanted me to do it earlier. Minister, it has been suggested in the Convention that we might evolve a fully-fledged European foreign policy. Could you tell us what the Government's attitude is to that proposal and especially how you think it might affect the United Kingdom's relationship with other countries and in particular with the United States?
  (Mr MacShane) I am a strong proponent of the Atlantic partnership and in my speeches as Minister I refer to the Euro-Atlantic community of nations and I think that the anti-European view is as foolish as being anti-American and vice versa, so the United Kingdom has a strong respect for foreign policy players within the EU and I think the EU can only benefit from a more effective common foreign and security policy, but it is one that in my judgment should be based on partnership not just with the United States but with the other countries and democracies we can work with to promote world security and peace. We worked very closely indeed with the US, for example, in the Balkans. In my former post I had very rewarding discussions with our American partners in Washington and our American partners on the ground in the Balkans and of course in the Middle East with the so-called "Quartet"—the US, the EU, the United Nations and Russia. We believe that these complement and strengthen the UK/US relationship. Our ideas on reforming the Council Presidency and strengthening the role of the High Representative will further improve the ability of the European Union and the United States to work together. If I may again make a personal point, some of my friends in Paris say that London is a bit too pro-American for their liking. I say, "Mes che«re"s amis, try Warsaw, Budapest, Prague, Madrid, Netherlands or even Stockholm if you want to see pro-American capitals or people." The majority of Europe is not up for anti-Americanism just as I believe the majority of British people are not up for anti-Europeanism.

Chairman: Minister, you have been very generous with your time and informative in answering our questions. We have been at it for an hour and a half and I should let you go. Thank you and the people appearing with you very much for your time.





 
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