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HC 86-xxxviii

House of Commons

European Scrutiny Committee

Thirty-ninth Report of Session 2012–13 Documents considered by the Committee on 17 April 2013, including the following recommendations for debate:

Youth Employment initiative Financing European political parties

HC 86-xxxviii Published on 1 May 2013

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House of Commons

European Scrutiny Committee

Thirty-ninth Report of Session 2012–13 Documents considered by the Committee on 17 April 2013, including the following recommendations for debate:

Youth Employment initiative Financing European political parties

Report, together with formal minutes

Ordered by The House of Commons to be printed 17 April 2013

Notes

Numbering of documents

Three separate numbering systems are used in this Report for European Union documents:

Numbers in brackets are the Committee’s own reference numbers.

Numbers in the form “5467/05” are Council of Ministers reference numbers. This system is also used by UK

Government Departments, by the House of Commons Vote Office and for proceedings in the House.

Numbers preceded by the letters COM or SEC or JOIN are Commission reference numbers.

Where only a Committee number is given, this usually indicates that no official text is available and the

Government has submitted an “unnumbered Explanatory Memorandum” discussing what is likely to be included

in the document or covering an unofficial text.

Abbreviations used in the headnotes and footnotes

EC (in “Legal base”) Treaty establishing the European Community

EM Explanatory Memorandum (submitted by the Government to the Committee)*

EP European Parliament

EU (in “Legal base”) Treaty on European Union

GAERC General Affairs and External Relations Council

JHA Justice and Home Affairs

OJ Official Journal of the European Communities

QMV Qualified majority voting

RIA Regulatory Impact Assessment

SEM Supplementary Explanatory Memorandum

TEU Treaty on European Union

TFEU Treaty on the Functioning of the European Union

Euros

Where figures in euros have been converted to pounds sterling, this is normally at the market rate for the last

working day of the previous month.

Further information

Documents recommended by the Committee for debate, together with the times of forthcoming debates (where

known), are listed in the European Union Documents list, which is published in the House of Commons Vote

Bundle each Monday, and is also available on the parliamentary website. Documents awaiting consideration by

the Committee are listed in “Remaining Business”: www.parliament.uk/escom. The website also contains the

Committee’s Reports.

*Explanatory Memoranda (EMs) can be downloaded from the Cabinet Office website:

http://europeanmemoranda.cabinetoffice.gov.uk/.

Letters sent by Ministers to the Committee relating to European documents are available for the public to

inspect; anyone wishing to do so should contact the staff of the Committee (“Contacts” below).

Staff

The staff of the Committee are Sarah Davies (Clerk), David Griffiths (Clerk Adviser), Terry Byrne (Clerk Adviser),

Leigh Gibson (Clerk Adviser), Peter Harborne (Clerk Adviser), Paul Hardy (Legal Adviser) (Counsel for European

Legislation), Joanne Dee (Assistant Legal Adviser) (Assistant Counsel for European Legislation), Hannah Finer

(Assistant to the Clerk), Julie Evans (Senior Committee Assistant), Jane Lauder (Committee Assistant), Alex Hunter

(Committee Assistant), Daniel Möller (Committee Assistant), and Paula Saunderson (Office Support Assistant).

Contacts

All correspondence should be addressed to the Clerk of the European Scrutiny Committee, House of Commons, 7

Millbank, London SW1P 3JA. The telephone number for general enquiries is (020) 7219 3292/5465. The

Committee’s email address is [email protected]

European Scrutiny Committee, 39th Report, Session 2012–13 1

Contents

Report Page

Documents for debate

1 DWP/BIS (34677) (34771) (34772) Youth Employment Initiative 3

2 FCO (34688) Financing European political parties 8

Documents not cleared

3 BIS (34737) (34738) Space policy 11

4 DH (34294) (34295) Regulation of medical devices 22

5 DFT (34777) (34782) Civil aviation: passenger protection 25

6 DFID/DEFRA (34747) A decent life for all: ending poverty and providing a sustainable future 32

Annex: The Millennium Development Goals, Targets and Indicators 37

7 HMT (34077) (34657) Financial assistance for non-eurozone Member States 40

8 HMT (34794) (34795) Economic and Monetary Union 43

9 HO (34791) Entry and residence of third country nationals 51

Documents cleared

10 BIS (34053) Strategy for the outermost regions of the EU 57

11 BIS (34435) Rethinking education: investing in skills 59

12 BIS (34765) International protection for audiovisual performances 62

13 DFT (34032) Transport security 67

14 FCO (34812) Croatia: monitoring the accession process 70

15 HMRC (33574) Customs Union 79

16 HMT (34217) (34218) (34558) Banking Union 82

17 HO (34642) (34643) Cooperation with the Russian Federation on the trade in drug precursors 85

Documents not raising questions of sufficient legal or political importance to warrant a substantive report to the House

18 List of documents 88

2 European Scrutiny Committee, 39th Report, Session 2012–13

Formal minutes 91

Standing Order and membership 92


1 Youth Employment Initiative

(a) (34677) 7589/13 COM(13) 144 (b) (34771) 7533/13 COM(13) 145 (c) (34772) 7537/13 COM(13) 146

Commission Communication: Youth Employment Initiative Draft amendment to Commission proposal COM(2011) 607 final/2 — draft Regulation of the European Parliament and of the Council on the European Social Fund and repealing Council Regulation (EC) No 1081/2006 Draft amendment to Commission proposal COM(2012) 496 — draft Regulation of the European Parliament and Council laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund covered by the Common Strategic Framework and laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Council Regulation (EC) No 1083/2006

Legal base (All) — Documents originated 12 March 2013 Deposited in Parliament (a) 19 March 2013

(b) and (c) 18 March 2013 Department (a) and (b) Work and Pensions

(c) Business, Innovation and Skills Basis of consideration EMs of 26 and 27 March 2013 Previous Committee Report None; but see HC 86–xxxi (2012–13), chapter 4 (6

February 2013) Discussion in Council April/May Committee’s assessment Politically important Committee’s decision For debate in European Committee B

Background

1.1 At its meeting on 7/8 February 2013, the European Council agreed to establish a Youth Employment Initiative with a budget of €6 billion for the period 2014–20 to support Member States’ efforts to implement the youth employment package put forward by the Commission last December and, in particular, its proposal for a “Youth Guarantee” to help


young people enter the labour market. Our Thirsty-first Report, agreed on 6 February 2013, describes the content of the youth employment package.1 The most important element is a Council Recommendation which urges Member States to establish Youth Guarantee schemes ensuring that all young people up to the age of 25 receive “a good quality offer of employment, continued education, an apprenticeship or a traineeship within a period of four months of becoming unemployed or leaving formal education” and setting out a number of guidelines to inform the design of each scheme.2 The Recommendation was agreed by the Employment, Social Policy, Health and Consumer Affairs Council on 28 February.

The Commission Communication — document (a)

1.2 The Communication describes the scale of youth unemployment, averaging 23.6% across the EU as a whole, but notes that it is particularly acute in certain regions and Member States and presents a serious threat to social cohesion as well as to the longer-term competitiveness of the European economy. The purpose of the Youth Employment Initiative is to provide a dedicated source of EU funding to tackle youth unemployment in regions with levels of youth unemployment exceeding 25%. Half of EU funding (€3 billion) would take the form of targeted investment from the European Social Fund to support the sustainable integration of young people not in employment, education or training into the labour market, with the remaining sum being drawn from a dedicated youth employment budget line.

1.3 The Commission envisages that implementation of the Youth Employment Initiative should form part of a comprehensive strategy for tackling youth unemployment, reflecting differing national, regional and local circumstances, and that funding will be subject to the usual procedures for developing cohesion policy programmes for the period 2014–20. As a result, changes are needed to two draft Regulations currently under consideration in the Council and European Parliament, the first establishing the overall strategic framework for EU cohesion policy for the period 2014–20 (the draft Common Provisions Regulation), and the second setting out the thematic objectives and investment priorities for the European Social Fund.

Proposed changes to the draft Regulation establishing the European Social Fund for 2014–20 — document (b)

1.4 The European Social Fund (ESF) is one of the EU’s Structural Funds. It provides targeted financial assistance to regions across the EU to help reduce disparities in levels of social and economic development. ESF interventions focus specifically on improving employment opportunities for workers within the EU’s internal market by encouraging geographical and occupational mobility and by helping workers to adapt to change. In October 2011, the Commission proposed a draft Regulation identifying the principal objectives underpinning ESF support and more detailed investment priorities for the

1 See headnote.

2 See para (1) of the final text of the Recommendation agreed by the Council, document 6944/13, at http://register.consilium.europa.eu/pdf/en/13/st06/st06944.en13.pdf.


period 2014–20.3 During the course of negotiations, the Council has agreed a series of “partial general approaches” on the draft Regulation and other EU cohesion policy instruments. The only outstanding issue is the budget, which depends on the Council and European Parliament reaching agreement on the EU’s Multiannual Financial Framework for 2014–20.

1.5 The Commission has proposed a number of changes to the draft Regulation which would recognise the Youth Employment Initiative as a core element of the European Social Fund for 2014–20, focussing specifically on the sustainable integration into the labour market of young people aged between 15 and 24 in eligible regions who are not in employment, education or training. The Commission anticipates that the injection of additional specific funding to tackle youth unemployment should yield tangible results relatively quickly. It therefore proposes more intensive monitoring and evaluation of the Youth Employment Initiative against a set of specific indicators. Whilst Member States would still be required to make a financial contribution to their national programmes implementing the European Social Fund, the additional funding provided by the Youth Employment Initiative would not be subject to the principle of co-financing.

Proposed changes to the draft Common Provisions Regulation for 2014–20 — document (c)

1.6 The draft Common Provisions Regulation establishes common rules governing five EU Funds, including the European Social Fund.4 Most of its provisions, excluding the budget, have been agreed by the Council in a series of partial general approaches. The changes proposed by the Commission to the draft Regulation are intended to take account of the introduction of the Youth Employment Initiative. They establish the resources available for the Youth Employment Initiative (already agreed by the European Council, but subject to a broader agreement between the Council and the European Parliament on the Multiannual Financial Framework for 2014–20 ) and require the Commission, each year, to set out the annual breakdown of funding available to Member States and eligible regions from the Youth Employment Initiative. This funding will not be subject to the “performance reserve” which seeks to reward the most effective and efficient national programmes by setting aside a small proportion (5%) of the total allocation of EU cohesion funding for each Member State (by category of region and by Fund) pending a mid-term performance review. This is because the Commission proposes to “frontload” funding from the Youth Employment Initiative in the expectation of achieving concrete results more quickly.

1.7 The changes would also require Member States, in submitting annual implementation reports on their national programmes, to include specific information on the Youth Employment Initiative. A new Annex to the draft Regulation establishes the methodology for the allocation of funding to eligible regions with a rate of youth unemployment of more than 25%.

3 See (33218) 15247/11: HC 428–xli (2010–12), chapter 7 (9 November 2011).

4 See (33217) 15243/11: HC 428–xli (2010–12), chapter 1 (9 November 2011). The other Funds are the European Regional Development Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund.


The Government’s view

1.8 The Department for Business, Innovation and Skills has overall responsibility for EU cohesion policy, including the draft Common Provisions Regulation, but the European Social Fund is the responsibility of the Department for Work and Pensions.

1.9 The Minister for Employment (Mr Mark Hoban) agrees that the Youth Employment Initiative should be included within the regulatory framework established for the European Social Fund (ESF) in a way that enables its implementation to be assessed separately, but adds that the Government

“will want to ensure that the proposals on monitoring, publicity and financial support do not increase the complexity of the ESF or create unnecessary additional administrative burdens for managing authorities or beneficiaries.”5

1.10 He notes that the changes proposed by the Commission relate to its original proposal, whereas the Council has agreed a partial general approach on a compromise text covering all elements of the draft Regulation, with the exception of the budget. The Government will therefore seek to ensure that any changes are consistent with the Council’s approach. He says that eligibility for support from the Youth Employment Initiative (including any allocation for the UK) will be based on youth unemployment figures for 2012 produced by Eurostat which are not yet available. He expects the Irish Presidency to seek agreement in Council to the changes proposed in April or May so that they may form part of a possible First Reading agreement with the European Parliament on the overall package of EU cohesion policy measures. This should enable the Youth Employment Initiative to become operational from 1 January 2014.

1.11 Turning to the proposed changes to the draft Common Provisions Regulation, the Minister for Business and Enterprise (Michael Fallon) says that the Government will seek to ensure that the resources available for the Youth Employment Initiative, and the criteria for allocating them, continue to reflect the agreement reached by the European Council in February. He explains how the allocation of funding will work:

“The sum of money available will be divided by the number of unemployed between the ages of 15–24 in regions with more than 25% youth unemployment in 2012. Each eligible region will receive an allocation which reflects the percentage of unemployed between the ages of 15–24 in the region proportionally to the overall number of unemployed between the ages of 15–24 in all eligible regions. The allocation for each Member State is the sum of the allocations for each of its eligible regions. This money will be matched with ESF funding.”6

1.12 He notes that funding will only be available to Member States which have put in place a comprehensive strategic policy framework for tackling youth unemployment, including a Youth Guarantee scheme, and adds:

5 See para 21 of the Ministers’ Explanatory Memorandum.

6 See para 7 of the Minister’s Explanatory Memorandum on document (c).


“The Government will seek to ensure that the new conditionality set out in the amendment to the CPR [Common Provisions Regulation] is a direct and necessary precondition for use of the YEI [Youth Employment Initiative] and matched ESF funding, and that it respects the principles of proportionality and subsidiarity.”7

Conclusion

1.13 We accept that changes to the draft Common Provisions Regulation and the draft Regulation on the European Social Fund are necessary to establish the level of resources for the Youth Employment Initiative and how they are to be disbursed. We note that the changes proposed by the Commission appear to reflect what was agreed by the European Council in February and are broadly acceptable to the Government. However, we also note that the proposal to establish a Youth Employment Initiative, with a specific budget line to target investment towards regions where the rate of youth unemployment exceeds 25%, was not subject to any prior scrutiny. We agree with the Government that Member States and regions should have the flexibility to determine which interventions are most effective and how to make best use of available resources to tackle youth unemployment. We would like the Minister to explain what added value he expects the Youth Employment Initiative to bring to existing efforts to tackle youth unemployment, particularly in the UK, and recommend the documents for debate in European Committee B.

7 See para 19 of the Minister’s Explanatory Memorandum on document (c).


2 Financing European political parties

(34688) 6321/13 —

Opinion No 1/2013 concerning draft Commission Regulations on the statute and funding of European political parties and foundations and to amend the Financial Regulation (EU, Euratom No 966/2012) as regards the financing of European political parties

Legal base Opinion provided pursuant to Articles 287 and 322

TFEU Department Foreign and Commonwealth Office Basis of consideration Minister’s letter of 25 March 2013 Previous Committee Reports HC 86–xxxv (2012–13) chapter 10 (13 March 2013);

see also (34226) 13777/12 and (34259) 13842/12: HC 86–xix (2012–13), Chapter 2 (7 November 2012) and (34523) 17469/12: HC 86–xxvii Chapter 1(16 January 2013)

Discussion in Council Not applicable Committee’s assessment Politically important Committee’s decision For debate in European Committee B

Background and previous scrutiny

2.1 The background and detail of this Court of Auditors’ (ECA) Opinion and its relevance to proposed Regulations to change funding arrangements and funding eligibility conditions for European political parties and foundations, including a proposal to amend the Financial Regulation, are set out in our previous Report on this document.8

2.2 In that Report, we voiced concerns about the current proposals to regulate funding arrangements for European political parties and their eligibility for funding, in the light of:

a) the weaknesses in the proposed new funding arrangements for those parties highlighted in the ECA opinion; and

b) recent attempts in the European Parliament to exclude certain European parties from funding, linked to the current proposal to leave such decisions to the European Parliament alone.

2.3 We asked for further information from the Government on these two issues, namely that it should let us know:

i) In relation to (a) above, what action it proposed to take, both independently and collectively with other Member States, to ensure that the ECA’s concerns were pursued at future negotiations of the current proposals. In particular, we said that

8 See headnote


we would like to see the definition of “donations” in the proposed Regulations appropriately broadened to capture a wider range of transactions which are financially advantageous to the donee political parties and minimise the potential for misuse of EU funds.

ii) In relation to (b), its view on the recent European Parliament proposal to withdraw funding from two political parties, the European Alliance for Freedom and the European Alliance for National Movements and whether the Council, if it has been consulted, has come to a view.

2.4 In the meantime, we retained the current document under scrutiny.

Minister’s Letter of 25 March 2013

2.5 In his letter of response, the Minister for Europe (Mr David Lidington) commits to keeping us up-to-date with progress on the proposed Regulations.

2.6 He also informs us in relation to issue (a) that:

“As the Committee is aware, negotiations are ongoing on these proposals. The Court of Auditors’ opinion is, as I stated in my Explanatory Memorandum, a welcome contribution and will prove informative to the ongoing debate. We have already referenced the Court of Auditors’ opinion during the course of negotiations, as have other Member States, and will continue actively to do so where relevant.

“With regard to the specific point you raise about the Court’s opinion on the question of donations, I also have some concerns about the proposal as currently drafted. I agree that European political parties and European political foundations should be encouraged to obtain funding from sources other than the EU budget and that donations have an important role to play in this regard. However, it is important that this is not at the cost of current levels of accountability, financial propriety or transparency. I agree with the Court’s suggestion, that extending the definition of donations in a logical fashion to ensure a wide range of transactions are caught within its remit could be a sensible means by which to serve both of these aims. I will ensure that this is taken account of in our negotiating position.”

2.7 As regards issue (b), the Minister says that:

“We are aware that the European Parliament has initiated the process, as outlined in Rule 210 of its current Rules of Procedure, of verifying whether or not two political parties at European level continue to observe the principles upon which the EU is founded. The outcome of an eventual negative opinion in this regard would be exclusion from funding. The next stage in this process includes consideration by a committee of independent eminent persons, as provided for in Regulation (EC) No 2004/2003; one member of the committee will be appointed by the Council.

“I am conscious of the Scrutiny Committee’s concern about this process. Council is being consulted as part of the wider negotiations on the Commission’s proposals on the statute and funding of European political parties. Current provisions are being revisited as part of this process. The Committee references the envisaged role of the


European Parliament within the Commission’s proposals; I am keen to ensure that administrative and political decisions are clearly divided. The former should be dealt with in a neutral and apolitical way. I also think that the bar for challenging a political party’s status should be high. We will continue to approach negotiations with these principles in mind.”

Conclusion

2.8 We thank the Minister for his prompt and helpful response on the specific issues we raised in our Report in early March. We welcome the Minister’s commitment to keeping us informed of progress in the negotiation of the proposed Regulations.

2.9 We also note the Minister’s assurance that the Government will continue to reference the Court of Auditors’ Opinion in the negotiations on the proposed Regulations. However, we consider that the concerns raised by the Court are of such importance to representative and transparent democracy that they warrant further discussion within the House.

2.10 We therefore recommend the Court’s Opinion be debated in European Committee B.


3 Space policy

(a) (34737) 6950/13 COM(13) 108 (b) (34738) 6952/13 + ADDS 1–2 COM(13) 107

Commission Communication: EU Space Industrial Policy: releasing the potential for economic growth in the space sector Draft Decision establishing a space surveillance and tracking support programme

Legal base (a) —

(b) Article 189(2); co-decision; QMV Documents originated 28 February 2013 Deposited in Parliament 5 March 2013 Department Business, Innovation and Skills Basis of consideration (a) EM of 8 April 2013

(b) EM of 18 March 2013 Previous Committee Report None Discussion in Council (a) 30 May 2013

(b) Not known Committee’s assessment Politically important Committee’s decision Not cleared, further information requested

Background

3.1 In its April 2011 Communication “Towards a space strategy for the European Union that benefits its citizens” the Commission set out proposals for a space policy and said a specific industrial policy was necessary to deliver greater competitiveness on the world stage, independence for specific sub-sectors such as launchers and the development of the market for space products and services. It made a case for establishing an independent space situational awareness (SSA) capability based on new EU infrastructure.9

The documents

3.2 In this present Communication, document (a), which builds on the areas highlighted in the 2011 Communication, the Commission sets out five specific objectives for a space industrial policy:

• to establish a coherent and stable regulatory framework;

9 (32660) 8693/11 + ADDs 1–6: see HC 428–xxvi (2010–12), chapter 1 (11 May 2011) and Gen Co Debs, European

Committee C, 23 May 2011, cols. 3–14.


• to further develop a competitive, solid, efficient and balanced industrial base in the EU and support SME participation;

• to support the global competitiveness of the EU space industry by encouraging the sector to become more cost-efficient along the value chain;

• to develop markets for space applications and services; and

• to ensure technological non-dependence and an independent access to space.

3.3 Underpinning these objectives are 37 specific proposals divided into six work streams, as follows.

Improving framework conditions

3.4 The Commission asserts that with the expansion of space activities it is necessary to ensure that there is an appropriate regulatory framework in place. It believes that national legislation alone will not ensure a coherent coverage of space related legal issues and suggests that it may be necessary to establish an EU space regulatory framework to exploit the potential of an internal market for space.

3.5 The Commission sets out a number of areas where action could be considered to improve so-called framework conditions. These include:

• examining whether there needs to be legislation on the production and dissemination of private satellite data and potentially a Regulation on EU global navigation satellite systems (GNSS) third-party liability;

• action at an EU level in relation to dual-use export control;

• a need to ensure that there is sufficient radio spectrum available for space operations;

• exploring whether commercial sub-orbital space flights need an appropriate EU legal framework (either to better guarantee passenger safety or to establish an innovation friendly environment to facilitate this emerging market);

• pursuing the development of EU standards for the space industry;

• supporting development of skills needed by the space sector; and

• ensuring the EU space industry is taken into account during trade negotiations to foster reciprocity and a level playing field.

Supporting research and innovation

3.6 The Commission says that research, development and innovation are not only key for space industrial competitiveness but are also essential to sustainable economic growth and suggests the need for the EU to develop and maintain its own technologies and production capacities. It also recommends that the joint European non-dependence process that started in 2009, which involved the Commission, the European Space Agency (ESA) and


the European Defence Agency (EDA) creating a joint task force to produce a list of critical technologies for priority development, should be pursued. The Commission notes that list has been agreed and will be used in connection with EU research and development on critical technologies.

3.7 The Commission suggests that there is a need to increase promotion of space based services in order to encourage the exploitation of satellite infrastructures and develop the market for satellite based services and says there should be an increase in space based applications in EU policies as well as stimulation of new applications across a wide range of public and private users. The Commission says that the GNSS Action Plan to foster development and adoption of satellite navigation applications using the EU programmes, EGNOS and Galileo,10 is a first step in the right direction.

Expanding the array and use of available financial instruments

3.8 The Commission says that:

• space infrastructure funding needs significant financial input over long periods of time, continuity is important and postponement will result in additional costs;

• there is a market failure and public funding is required to support the growth potential of these types of projects;

• the next Multiannual Financial Framework (MFF) includes a proposal for a new type of financial instrument — the EU project bond initiative;

• currently, space is not within the scope for the first stage of this initiative but could be considered for the second; and

• this would, however, be subject to any proposed projects fulfilling the project bond criteria, in particular regarding revenue generation.

3.9 The Commission also focuses on the need to support the participation of SMEs, as appropriate, in the supply chain and in the fast growing sectors such as satellite enabled services. It notes that:

• there are a number of financial instruments available to SMEs, for example, the Competitiveness and Innovation Framework Programme and the Risk Sharing Financial Facility; and

• from 2014 SMEs may also be able to benefit from the EU financial instruments under the forthcoming programmes COSME (Programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises, 2014–20) and HORIZON 2020 (Framework Programme for Research and Innovation, 2014–20).

3.10 The Commission highlights the key role played by local authorities and regions in enhancing the competitiveness of the space industry but does not elaborate in what way.

10 (31718) 11137/10 + ADDs 1–2: see HC 428–ii (2010–11), chapter 19 (15 September 2010).


Making a better use of procurement policy

3.11 The Commission:

• notes that several Space Council11 Resolutions have highlighted the need to develop adequate EU instruments and funding schemes that take into account the space sector;

• says that it is necessary to establish whether the current approach to space procurement could be improved;

• proposes, to this end, to analyse the impacts of implementation of Directives on public and defence procurement on the national and EU space markets; and

• proposes that there should early coordination for programmes that involve joint funding with the ESA to ensure that there is a smooth transition between the development and operational phases.

Establish and implement a real EU launcher policy

3.12 The Commission asserts the importance of EU autonomy in strategic sectors such as launch services and sets out its objectives for a launcher policy:

• to ensure a reliable, secure, available and cost effective system; and

• to create the conditions to maintain and strengthen independent EU access to space.

3.13 It notes the importance of the EU having independent access to space when implementing public programmes such as Galileo and Copernicus12 and suggests that Member States should ensure that their launcher purchasing policies are in line with the goal of independent access.

Support the setting up and operation of a EU space surveillance and tracking (SST) service

3.14 The Commission notes that the sustainability of space based systems and services is important, saying that:

• any shutdown would have a significant impact both on the safety of EU citizens and economic activities within the EU;

• there is an increasing threat of collision risks due to the rise in the number of satellites and space debris and it is necessary to identify and monitor this;

• monitoring would include cataloguing satellite positions and tracking movements when a potential risk of collision has been identified so that satellite operators can be alerted; and

11 The Space Council is a ministerial body combining the EU’s Council of Ministers and the ESA’s ministerial council.

12 Copernicus was known formerly as GMES, Global Monitoring for Environment and Security.


• as no EU level SST capability currently exists, it intends to come forward with a proposal outlining the organisational framework for the setting up and operation of such a service, which would be in partnership with Member States and would build on their existing assets and expertise.

3.15 This draft Decision, document (b), would establish a SST support programme for the EU — the proposal is less ambitious than one foreshadowed in the 2011 Communication. The Commission says that:

• spaced-based systems play a fundamental role in everyday life and are critical to the economy and security;

• there is a need to protect EU space infrastructure accordingly; and

• in order to mitigate the growing risk of collisions amongst satellites and orbital debris, it is necessary to identify and monitor space objects in an increasingly congested and contested orbital environment, in order to ensure the safety, security and sustainability of the space operations upon which there is are critical dependency.

3.16 The programme the Commission envisages would aim to establish a SST capability in the EU with emphasis on:

• exploitation of existing sensors (optical and radar) to survey and track space objects;

• establishment and operation of a function to process and analyse SST data to support risk assessment involving collision avoidance in orbit and re-entry of objects into the Earth’s atmosphere; and

• setting up and operation of a SST function to support spacecraft operators and public authorities.


• the level of funding proposed for the SST support programme, €10 million (£8.63 million) per annum, is relatively modest and should be drawn from other programmes provided for in the MFF framework for 2014–20;

• it envisages providing support and oversight for the development of services, but does not intend to invest in new SST sensors, relying upon the coordination of existing sensors, owned and operated by the Member States;

• those Member States wishing to participate in the programme would need to demonstrate ownership of SST sensors or capabilities and services and adequate resources to operate and deliver them and to provide a plan for engagement in the SST programme;

• it anticipates a coordinating role and funding for the EU Satellite Centre (EU SatCen) based in Torrejon, Spain; and


• information generated in the framework of the SST programme would be managed and exchanged in accordance with data security and governance rules, which would likely reflect similar existing measures developed by the EU SatCen for handling sensitive remote sensing data products.


3.18 In his Explanatory Memorandum on the Commission Communication, document (a), the Minister for Universities and Science, Department for Business, Innovation and Skills (Mr David Willetts), says first that:

• the Government notes the Commission’s proposals for a EU space industrial policy;

• the Communication is very wide ranging and extensive in scope with little detail provided in most cases about what exactly is proposed;

• the Government will need to consider carefully the proposals for new EU initiatives as they emerge;

• the thrust of the Communication is on space as a driver for growth and innovation, which is welcome and in line with Government policy; but

• the Communication lacks a clear vision on what the industrial policy is intended to achieve and what the measures of success will be.

3.19 In more detailed comments the Minister continues that:

• the Government is concerned that under the proposals to improve framework conditions, no evidence has been presented to justify potential legislation on the production and dissemination of private satellite data;

• it will seek further information from the Commission on why it believes legislation is required in this area and the evidence base to support it — it is unclear when any proposal would be made by the Commission;

• the Commission suggests an examination of the possibility of a legislative instrument on certain aspects which impact on the emergence of a single market for space products and services, which could include obligations of insurance, registration and authorisation of space activities and service, sanctions and environmental issues;

• these areas are currently regulated in the UK by the Outer Space Act 1986, in accordance with UN Space Treaties;

• the Act is the legal basis for the regulation of activities in outer space carried out by organisations or individuals established in the UK or one of its Crown Dependencies or Overseas Territories;

• the Government is concerned that the Commission’s proposal has the potential to duplicate effort and increase red tape;


• the UK will always remain responsible for its space activities under the UN Treaties — the Government will seek clarification from the Commission on how it envisages this proposal working alongside Member State obligations under the UN Treaties and what additional benefit it sees from EU legislation;

• further information is needed on the substance of the proposal to monitor and improve the export control and intra-EU transfer frameworks;

• in particular more analysis is needed on what might be wrong with the existing frameworks or what improvements are envisaged and the Government will seek further information on the Commission’s rationale for proposing action in this area;

• the Government supports the need to ensure the availability of radio spectrum for space operations but would welcome more details from the Commission on how it proposes to take this forward in the longer term;

• on the proposal to explore whether commercial space flights need to be embedded in a EU legal framework, the Government considers more could be done than just a study and is disappointed that this is all that is being proposed;

• without swift movement in this area the EU will fall behind key international competitors such as the US;

• any regulatory regime that is developed must take proper account of the available scientific and technological evidence and make correct use of the distinction between risk and hazard;

• the Government will challenge any Regulation that justifies an excessively cautious approach, particularly if it is based on a misunderstanding of the “precautionary principle”;

• it sees substantial economic benefits from encouraging the development and operation of space planes to undertake commercial flights in the short term and to further develop space planes so that they can deliver spacecraft into low Earth orbit, geostationary orbit and beyond;

• there is no regulatory framework for space planes in the EU and that is acting as a barrier to the research and development of space planes by UK companies;

• this reduces the EU’s ability to attract inward investment from overseas companies that could plan to operate space plane services;

• the Government has therefore committed to working with international partners to secure a regulatory environment for space planes in its Growth Review;13

• the proposals relating to skills are welcome and the Government would expect that these proposals will build on the work already being undertaken in this area;

13 See “Plan for Growth implementation update”, HM Treasury and BIS, March 2013 at http://www.hm-

treasury.gov.uk/d/growth_implementation_update_mar2013.pdf.


• the Commission proposes establishment of academic space qualifications and the Government will seek clarification from it on what is envisaged by this;

• there are already many engineering, science and business qualifications already available and the Government needs to ensure that what is being proposed does add value — it will seek to ensure that any measures do not infringe on Member State competence;

• the Government will seek clarification from the Commission on what it proposes in respect of ensuring that the EU space industry is taken into account during trade negotiations — it is vital that competition remains open and fair, however, the Government would support the possibility of the opening up of those markets that are currently closed to EU industry;

• the Government agrees that research and development are essential elements of sustainable economic growth — it is, however, essential, if investment is to be directed to best effect, that space related research and development is fully co-ordinated using the detailed harmonisation and planning processes already developed and operated by the ESA;

• the Government recognises the importance of Key Enabling Technologies (KET) to technology-based innovation generally and in the specific domain of space technologies and will ensure that the opportunities for funding from KET elements of Horizon 2020 are promoted to the UK space research and development community;

• the Government welcomes a stronger focus on research and development — the budget Heading 1A, which covers Horizon 2020 and other pro-growth investment, will now account for 13% rather than 9% of the total EU budget and is an increase of 37% compared to the present MFF — however, these figures are subject to the consent of the European Parliament;

• the Government supports the objective of strategic non-compliance in critical technologies but this should not be at any cost — it will work with the Commission to ensure that proposals brought forward in this area are affordable;

• the joint planning around critical planning for non-dependence already undertaken by ESA/EU/EDA using the ESA harmonisation methodology provides a sound basis for future planning of investment in this area;

• further information is required on the proposal to promote the use of space-based technologies and applications in EU policies — the Government would support such use where appropriate, for example, further analysis of where space services derived from Copernicus could assist compliance with Directives concerning environmental monitoring and management;

• in relation to expanding the array and use of available financial instruments the Government notes that these proposals are broader than space and would welcome further details from the Commission on how it envisages these proposals working


in practice — the Government would support efforts to ensure that financial instruments are fully exploited by industry;

• in relation to the Commission’s proposal on restricting third country market access in public procurement, the Government has previously challenged this proposal because of its protectionist nature;

• however, the public procurement section of the Communication is helpful in setting out that the public procurement Directives apply in this area and that EU institutions are required to follow the Financial Regulation and Implementing Rules — the Government would welcome clarification from the Commission on how it intends to take forward this work;

• the Government notes the Commission’s desire to establish and implement a real EU launcher policy and supports the policy of access to space;

• the UK is a signatory to the 2008 Ministerial Declaration on Launchers Exploitation from the Guiana Space Centre, that entrusts Arianespace through the ESA with the execution of the production of Ariane launchers and the exploitation of Ariane, Vega and Soyuz;

• although the UK does not subscribe to the ESA’s launcher programmes, the Government recognises the importance of independent access to space — it will, however, seek clarification from the Commission on the scope and affordability of the proposed policy;

• the Government believes that any launcher policy will need to look carefully at customer requirements and current model for launcher development and production to ensure that the best option is taken forward for the EU’s independent access;

• this could involve a radical change to the current arrangement that is in place — the Government will therefore be seeking clarification from the Commission on what it envisages by a “real European launcher policy” and how it sees the governance structure developing; and

• the Communication does not say anything about the Commission’s strategic view for the future of the EU space industry in the long term, nor does it include any performance indicators against which progress can be assessed — the Government will continue to urge the Commission to address this deficiency.

3.20 Finally the Minister tells us that the Irish Presidency has indicated its wish to secure Council Conclusions on this Communication at the Competitiveness Council on 30 May.

3.21 In his Explanatory Memorandum on the draft Council Decision, document (b), the Minister, telling us that the Government supports the principle of an EU SST capability which draws upon existing sensors owned and operated by Member States (rather than development of new capability owned and operated by the Commission or another EU institution) and says that this would be regarded as best use of existing capabilities in a time of resource constraints.


3.22 In more detailed comments the Minister says that:

• the Government recognises the importance of working with the EU, Member States and the ESA on an integrated approach to security in European space programmes and wider space policy, including in infrastructure and systems resilience;

• it supports a coordinated international effort to improve SSA of which SST is the main, and most important element;

• good SSA is vital in underpinning international efforts in striving towards a safer and more secure space environment;

• this involves the surveillance of space, and the analysis and assessment of potential threats and hazards to space activities;

• SSA/SST provides the ability to anticipate and respond to threats in a timely manner, thus reinforcing resilience, and national and international security;

• SST is one of the means by which UK fulfils its obligations under the Outer Space Act 1986 in monitoring objects licensed for launch by the UK;

• this EU initiative has the potential to enhance the Government’s ability to fulfil these obligations under the Outer Space Treaties;

• the Government recognises that SSA/SST to support a safer and more secure space environment is best achieved collectively;

• the US maintains the strongest national capability through its space surveillance network, to which the UK contributes through RAF Fylingdales, with national coordination through the UK Space Operations Coordination Centre at RAF High Wycombe;

• this arrangement gives the UK access to much better SSA than it could achieve alone, but it still does not meet all of its national needs, or those of UK-based commercial or civil operators;

• as space becomes more congested, there is a growing need in the UK and other countries for a more holistic SSA picture and more predictive capabilities;

• the proposed programme presents an opportunity for the UK to build on its existing civil SSA activities and build capability/capacity to serve its growing civil requirement via EU funding;

• governance and management of the proposed system will require greater consideration and clarification in order to ensure that EU aspirations are practicable and deliverable and the Government will seek to exploit its expertise and experience in existing SST provision to facilitate this process and influence the evolution of the programme;


• the role proposed for the EU SatCen is new and it will be important to seek verification from the Commission that these new functions are entirely compatible with its current competencies and capabilities;

• the draft Decision could result in more staff at the EU SatCen, but it is being funded by a customer (in this case, the Commission), which is the customer-funding direction the Government wants the Centre to take, as opposed to fixed funding from Member States;

• Member States should also retain ownership of the overall EU SatCen product, where security sensitivities may apply;

• data security will be a fundamental prerequisite for the success of this support programme since close analysis of satellites for example can be sensitive; and

• the draft Decision addresses data security but the Government will explore in negotiations whether the proposed arrangements are sufficiently robust to deliver the necessary level of protection.

3.23 On the financial aspects of the draft Decision the Minister says that:

• the Commission’s impact assessment sets out the estimated cost for options for the development of an EU capability on SST support services and concludes that a budget of €70 million (£60.4 million) over the period 2014–20 is needed;

• the draft Decision does not set a cap for the level of expenditure for the programme and the Government will seek to include one in negotiations;

• the EU funding envisaged for the programme would be drawn from other programmes provided for in the MFF for 2014–20, such as the Galileo Programme, Horizon 2020 and the Internal Security fund — therefore the proposal does not constitute a request for funds additional to the budget proposed for the MFF; and

• the Government wishes to understand the Commission’s rationale for proposing the Internal Security Fund as a source of funding since it is not apparent that it is within the scope of that programme.

Conclusion

3.24 Noting the Presidency’s intention to have Council Conclusions on the Commission Communication, document (a), agreed at the Competitiveness Council in May, we presume that the Government will be ensuring that these either confirm the various clarifications it is seeking or do not pre-empt resolution of the caveats it has expressed to us. Accordingly we should like to have an account before that Council of the thrust of the proposed Conclusions. Meanwhile the document remains under scrutiny.

3.25 As for the draft Decision, document (b), before we consider it further we should like to have, in due course, an account of progress in the negotiations on the various issues drawn to our attention, including the financial implications, particularly the


proposed use of the Internal Security Fund. Meanwhile this document also remains under scrutiny.

4 Regulation of medical devices

(a) (34294) 14493/12 + ADDs 1–5 COM(12) 542 (b) (34295) 14499/12 COM(12) 541

Draft Regulation of the European Parliament and of the Council on medical devices, and amending Directive 2001/83/EC, Regulation (EC) No 178/2002 and Regulation (EC) No 1223/2009 Draft Regulation of the European Parliament and of the Council on in vitro diagnostic medical devices

Legal base (Both) Articles 114 and 168(4)(c) TFEU; co-decision;

QMV Department Health Basis of consideration Minister’s letter of 27 March 2013 Previous Committee Reports HC 86–xxxv (2012–13), chapter 8 (13 March 2013);

HC 86–xxxii (2012–13), chapter 2 (13 February 2013);HC 86–xx (2012–13), chapter 10 (21 November 2012)

Discussion in Council No date set Committee’s assessment Politically important Committee’s decision Not cleared; further information requested


4.1 The draft Regulations would repeal and replace three existing Directives which establish the EU regulatory framework for medical devices. The first — document (a) — applies to all types of medical devices, including implants. The second — document (b) — applies to in vitro diagnostic medical devices used to test samples derived from the human body. Both seek to introduce a more rigorous system for Member State supervision of “notified bodies” — bodies responsible for certifying that medical devices are safe for use — and to ensure greater transparency and accountability in relation to devices and their manufacturers.

4.2 The Government broadly welcomes the draft Regulations, subject to two concerns. First, it considers that the Commission’s proposals to introduce additional pre-market scrutiny of higher risk devices by a central Committee of Member State experts would be ineffective and overly bureaucratic. Second, it questions the removal of an existing exemption for “in house” devices manufactured and used within the same health


institution which would substantially increase costs within the NHS. Our Twentieth Report of 21 November 2012 describes the main changes to the EU’s existing regulatory framework. It is supplemented by our Thirty-second and Thirty-fifth Reports, agreed on 13 February and 13 March 2013, which set out the Government’s response to a number of issues we raised in our earlier Report.

The Minister’s letter of 27 March 2013

4.3 The Parliamentary Under-Secretary for Quality (Earl Howe) informs us of the outcome of the public consultation on the Commission proposals carried out by the Medicines and Healthcare products Regulatory Agency (MHRA). He says that more than 100 stakeholders submitted evidence, with the majority endorsing the Government’s aim of strengthening the current regulatory framework for medical devices whilst also removing or amending elements of the proposals which place disproportionate burdens on the private or public sector. He continues:

“In particular, the majority of stakeholders agree with the Government that introducing an additional layer of centralised European bureaucracy to scrutinise the safety of medical devices will delay patient access to new technologies and not strengthen patient safety. Stakeholders did not submit a lot of quantitative evidence on this point. Therefore MHRA officials continue to reach out to stakeholders bilaterally to collect evidence and assess the likely financial impact on the UK.

“There was mixed support for the Government’s preference to exempt high-risk in vitro diagnostic devices, which a single health institution develops and uses (termed ‘in-house tests’), from the full regulatory requirements. Some stakeholders agreed with the Government that this will mean that tests remain available where there are no commercially available alternatives. This includes, for example, tests which need to keep pace with a changing viral genome and which need to be modified to provide a diagnosis.

“Equally, some stakeholders expressed concern that in-house tests will not meet the same patient safety standards as commercial tests but recognised the need for these diagnostic tests where there were no commercial equivalents available. I am of the view that this concern should be addressed through the governance of health institutions’ pathology laboratories, such as accreditation to ISO 15189.”

4.4 The Minister concludes:

“The MHRA is now strengthening the Government’s position by drawing on the detailed stakeholder evidence on:

• the need for transparent stakeholder engagement throughout the regulatory system;

• the safety information which can most usefully be made available to clinicians and the public;

• the most appropriate risk-based classification of certain medical devices;


• a proportionate allocation of responsibilities on economic operators along the supply chain; and

• clear and precise wording in the regulations.”

Conclusion

4.5 We thank the Minister for summarising the outcome of the public consultation on the Commission proposals and are pleased to note that evidence submitted by stakeholders is being used to inform the Government’s negotiating position. We ask the Minister to inform us of any significant developments in the negotiations, particularly with regard to the treatment of “in-house” devices and the introduction of an additional tier of pre-market scrutiny for certain high risk medical devices, as well as the issues highlighted in our earlier Reports. Meanwhile, the draft Regulations remain under scrutiny.


5 Civil aviation: passenger protection

(a) (34777) 7615/13 + ADDs 1–2 COM(13) 130 (b) (34782) 7656/13 COM(13) 129

Draft Regulation amending Regulation (EC) No 261/2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights and Regulation (EC) No 2027/97 on air carrier liability in respect of the carriage of passengers and their baggage by air Commission Communication: Passenger protection in the event of airline insolvency

Legal base (a) Article 100(2) TFEU; co-decision; QMV

(b) ― Documents originated (a) 13 March 2013

(b) 18 March 2013 Deposited in Parliament (a) 19 March 2013

(b) 22 March 2013 Department Transport Basis of consideration (a) EM of 2 April 2013

(b) EM of 9 April 2013 Previous Committee Report None Discussion in Council (a) 7 June 2013

(b) Not known Committee’s assessment Politically important Committee’s decision (a) Not cleared, further information requested

(b) Cleared

Background

5.1 Regulation (EC) No. 261/2004 lays down common rules on compensation and assistance to air passengers in the event of denied boarding and of cancellation or delay of flights. It is enforced in the UK by the Civil Aviation Authority (CAA) as the competent National Enforcement Body (NEB).

5.2 Regulation (EC) No. 2027/97 deals with air carrier liability in the event of claims for compensation in the event of death or injury to passengers and the liability limits for delay and mishandled baggage. The Regulation translates parts of the Montreal Convention into EU law.

5.3 At present passengers who have bought an airline ticket as part of a package have, under the Package Travel Directive, Council Directive 90/314/EEC, compensation rights in the event of the airline’s in solvency. Holders of flight only tickets have no such rights.


The documents

5.4 With this draft Regulation, document (a), to amend Regulation (EC) No. 261/2004 and Regulation (EC) No. 2027/97 the Commission proposes a range of changes to reinforce enforcement policies and procedures, improve passenger rights and re-address the financial obligations, in some circumstances, imposed on airlines.

5.5 The draft Regulation would clarify what constitutes an “extraordinary circumstance”, in line with a decision of the Court of Justice.14 An airline may on occasion have to cancel or delay a flight due to extraordinary circumstances not inherent in the normal exercise of the carrier’s activities and beyond its control (for example due to weather, security risks, strikes and unexpected flight safety shortcomings). Under these circumstances, passengers are entitled to assistance from the airline (for example, provision of meals and refreshments, where there is a delay of at least two hours, or accommodation in stated circumstances), but not to any additional financial compensation. The proposal provides a non-exhaustive list of what would constitute “extraordinary circumstances”. It also proposes a limitation on the use of the provision in so far as it affects the flight concerned or the previous flight by the same aircraft.

5.6 The draft Regulation would also:

• amend the existing provision allowing claims for compensation for delayed flights after three hours to three separate trigger points — five hours for journeys of 3,500 km or less (and for all intra-EU flights), nine hours for journeys between 3,500 and 6,000 km and 12 hours for journeys of 6,000 km or more;

• provide that if a carrier cannot reroute passengers on its own aircraft as a result of a cancelled flight so as to arrive at the final destination within 12 hours of the scheduled arrival time, then passengers have the right to rerouting via another carrier or another mode of transport;

• reduce the time threshold for providing care to passengers (for example refreshments or meals) to two hours for all flights, replacing the current two, three or four hour thresholds (depending on the flight distance);

• confirm that passengers that miss a flight connection because their previous flight was delayed have a right to care and, under certain circumstances, defined compensation (this would only apply when the connecting flights are part of a single through ticket);

• provide that passengers for flights which are re-scheduled two weeks or less in advance of the original flight, will have similar rights to delayed passengers;

• set out rights for passengers when their flight is delayed on the tarmac, including the right to toilet facilities and drinking water after one hour and the right to disembark after five hours (subject to safety or security related issues);

14 C-549/07 (Wallentin-Herman).


• provide that it is not possible for passengers to be denied boarding on a return ticket simply on the grounds that they did not take the outward flight;

• make clear that passengers should have the right to information about any flight disruption as soon as the information is available;

• provide, in relation to complaint handling and general enforcement, that the NEBs should be more proactive in their monitoring of airline compliance to Regulation (EC) No. 261/2004, including coordination and exchange of information between Member States (as well as to the Commission);

• create complaint handling bodies for passenger complaints (which could be alternative dispute resolution (ADR) bodies under the new ADR Directive);15

• extend NEB enforcement activity to the monitoring of compliance with Regulation (EC) No. 2027/97 (and of aspects of the Montreal Convention) — the intention is to limit this to the provisions that relate to the rights of passengers with regard to delayed, lost or damaged baggage;

• provide, in the case of delays and cancellations due to extraordinary circumstances, airlines with the right to limit the provision of accommodation to three nights with a maximum sum of €100 (£86.30) per night (although this limitation will not apply to certain classes of persons such as passengers with reduced mobility, provided the airline has received prior notification of their needs);

• exclude ‘regional’ services (that is routes of less than 250km on aircraft with less than 80 seats) from the scope of the obligation to provide accommodation;

• enable spelling mistakes on tickets to be amended free of charge up to 48 hours prior to departure; and

• include, in relation to Regulation (EC) No. 2027/97, an increase in the liability of air carriers with regard to mobility equipment (up to the value of the equipment) and measures related to the carriage of musical instruments.

5.7 In its Communication, document (b), the Commission:

• assesses the current level of passenger protection in the event of airline insolvency and how to improve the existing framework; and

• says that the current legal framework is sufficient but sets out actions it intends to take to encourage national authorities to monitor airlines’ financial situations and adopt a more coordinated approach between national authorities and with industry.


15 (34689) —: see HC 86–xxxv (2012–13), chapter 1 (13 March 1013).


• between 2000 and 2010, 96 airlines became insolvent in the EU, affecting an estimated 1.4 to 2.2 million passengers — of these, around 12% were stranded abroad;

• the largest number of insolvencies was registered in the UK, which has the largest market in the EU by passenger numbers;

• only 0.07% of flight-only passengers will be affected by airline insolvency between 2011 and 2020;

• while this is a very low proportion, the impact can be significant, especially if repatriation is required;

• its concern is that it can be difficult to sufficiently ensure in advance arrangements to assist passengers — failing carriers can find it difficult to fulfil passengers’ rights and after they have failed there is no further protection;

• Regulation (EC) No 261/2004 already provides an appropriate legal framework for passenger assistance in case of insolvency; and

• in some Member States, the low frequency of financial evaluations means that regulators do not have forewarning.

5.9 The Commission says that it will:

• seek to strengthen the licensing oversight of EU air carriers under Regulation (EC) No 1008/2008, which can require a carrier to plan ahead and put in measures to protect passengers;

• encourage better financial monitoring and cooperation;

• formalise existing voluntary arrangements around rescue fares (other airlines repatriating at nominal cost) through working with EU air transport associations;

• engage with the International Air Transport Association (IATA) on the adoption of a service level agreement to protect passengers’ money when booking through IATA agents;

• encourage the wider availability of Scheduled Airline Failure Insurance (SAFI), a private insurance scheme; and

• encourage greater availability of information about credit card refunds and such schemes in Member States.

5.10 The Commission concludes that it will monitor the application of these measures and consider after two years, on the basis of their effectiveness, whether to proposed legislation to guarantee protection of passengers in the case of airline insolvency.


5.11 In his Explanatory Memorandum on the draft Regulation, document (a), the Minister of State, Department for Transport (Mr Simon Burns), first notes that:


• the present legislation was adopted prior to the 2006 Cordoba Agreement and contains a clause suspending Gibraltar’s Airport, as was normal practice at that time;

• the draft Regulation does not contain an amendment to remove the Gibraltar Airport suspension clause;

• the Commission is aware of the Government’s concerns about the proposal’s treatment of Gibraltar; and

• the Government intends to press for Gibraltar’s inclusion.

5.12 On other aspects of the proposal the Minister says that:

• the Government considers that the introduction of Regulation (EC) No. 261/2004 has proved to be an important step forward for air passengers and has raised airlines’ standards of service;

• case law (primarily the Sturgeon case,16 which indicated that a long delay of at least three hours at arrival entitled passengers to the same compensation as in the case of a flight cancellation) has, however, had a decisive impact on the interpretation of the Regulation and associated costs of compliance;

• the Government therefore welcomes the proposed measures which aim to reduce the more costly aspects of Regulation (EC) No. 261/2004, particularly the proposal to increase the starting point (from three to five hours) at which compensation can be claimed as a result of long delays;

• it also welcomes moves to simplify and improve the interpretation of the Regulation, in particular the single two-hour threshold in providing the right to care to passengers; and

• it is carefully considering the range of the other passenger focussed proposals, recognising that these may provide benefits and protection to the consumer but may also lead to increased costs for UK airlines.

5.13 In relation to consultations the Minister tells us that:

• the Government held an Industry Stakeholder Group meeting in January in anticipation of the release of the draft Regulation, after which airlines and airline associations submitted their views and assessment of the proposal;

• the industry is largely supportive of a revision of the current Regulation, mainly in order to amend the thresholds at which compensation is due during long delays;

• it is, however, less supportive of some of the other changes that may lead to increased costs;

16 C-402/07 Sturgeon.


• during the Commission’s consultation, consumer and passenger representatives mainly focussed on poor compliance and inadequate enforcement, especially in the case of the rights to financial compensation in case of delay; and

• further informal consultation is continuing with each of the major UK airlines, as well as with the CAA and passenger interest groups.

5.14 On the financial implications of the draft Regulation the Minister says that:

• quantification, in the Government’s preliminary assessment of the impacts of the proposal (which the Minister attaches to his Explanatory Memorandum),17 has not been possible for many of the changes, but has been possible for the lifting of the compensation threshold from three hours to a starting point of five hours and for the move to two hours for when refreshments and meals should be provided;

• the change in compensation thresholds shows a significant saving for the industry — a reduction of around two-thirds or €30 million (£25.8 million) per year for a 10% claim rate);

• the move to a two-hour threshold for the provision of care shows an increase in cost of €4 million (£3.45 million); and

• the Commission’s impact assessment indicates that the current cost of the Regulation amounts to around €0.9 billion (£0.77 billion) (around 0.6% of airline revenues) and that the proposal will result in a 10% reduction in these costs for the industry.

5.15 Finally the Minister tells us that the Irish Presidency hopes that it will be possible to reach a General Approach on the draft Regulation at the 10 June Transport Council.

5.16 In his Explanatory Memorandum on the Commission Communication, document (b), the Parliamentary Under-Secretary of State, Department for Transport (Norman Baker), saying that the Government welcomes the Communication, comments that the non-regulatory nature of the Commission’s approach is in line with the Government’s agenda of pursuing alternatives to new legislation.

5.17 The Minister continues that:

• in the UK the CAA already performs many of the suggested functions to mitigate the impact of airline failures, as well as performing similar oversight of tour operators through the Air Travel Organisers’ Licensing (ATOL) scheme;

• without forewarning, it is difficult to put mechanisms in place to fulfil passengers’ rights;

• there are some partial measures — the UK insurance industry offers SAFI as an element of some travel insurance policies and consumers booking with a credit card also have some protection. These, however, do not provide full protection;

17 See http://europeanmemorandum.cabinetoffice.gov.uk/.


• the CAA performs oversight of travel companies operating in the UK as part of the ATOL scheme and of the larger UK registered passenger airlines;

• the level of financial monitoring depends on the size and financial risk of the company;

• this has proven effective in the past by giving forewarning that operators may be about to go bust and allowing mitigation measures to be put in place;

• for ATOL failures, these may reduce calls on the protection arrangements, for airline failures, however, there is no dedicated protection scheme but the CAA uses what powers and influence it has to mitigate the effects;

• typically after a failure the CAA will make available information to affected passengers and influence surviving carriers to offer cheap rescue fares rather than raising prices;

• where UK carriers are identified as at risk, through the CAA’s use of its powers under Regulation (EC) No 1008/2008, it uses its role as licensing authority as a lever to obtain what concessions it can — in a recent case this resulted in substantial customer money being put into escrow for passenger liabilities, as well as obtaining voluntary agreement by other carriers to offer repatriation; and

• a key consideration arising from tour operator insolvency is the need to provide repatriation and this risk of people being stranded abroad is equally applicable to airlines — the same purchase model of selling far in advance is also used, creating financial risk for consumers if the airline goes insolvent before the flight.

5.18 The Minister, noting that the Commission intends to implement a non-regulatory solution that is similar to procedures already in place in the UK and will only consider a legislative initiative if its non-regulatory approach is not effective, concludes that, given the effectiveness of financial monitoring in the holiday industry and the similar risks to consumers in the airline industry, the Government is supportive of this Communication. He adds that in the next few months the Commission is expected to publish proposals for reform of the Package Travel Directive, which requires protection for package holidays and underpins the UK’s ATOL scheme, and the Government’s view is that these should be considered together, as there is some clear overlap between protection of package holidays and flights.

Conclusion

5.19 Whilst we note the potential benefit for airlines arising from the draft Regulation, document (a), we wish to hear from the Government, before considering the matter again, about the outcome of its efforts to resolve the Gibraltar issue and of its consideration of the full ramifications of the proposal, particularly as regards the balance between airline costs and passenger rights. Meanwhile the document remains under scrutiny.

5.20 As for the Commission Communication, document (b), whilst clearing the document we draw it to the attention of the House for its welcome non-legislative


approach to attempting to resolve the problem of passenger protection in the event of airline insolvency.

6 A decent life for all: ending poverty and providing a sustainable future

(34747) 7075/13 COM(13) 92

Commission Communication: “A decent life for all: ending poverty and giving the world a sustainable future”

Legal base — Document originated 27 February 2013 Deposited in Parliament 7 March 2013 Departments International Development and Environment, Food

and Rural Affairs Basis of consideration EM of 19 March 2013 Previous Committee Report None Discussion in Council 27 May 2013 “Development” Foreign Affairs Council

and 18 June 2013 Environment Council Committee’s assessment Politically important Committee’s decision Not cleared; further information requested

Background

6.1 The eight Millennium Development Goals (MDGs) were agreed at the United Nations Millennium Summit in September 2000.18 They are to eradicate extreme poverty and hunger; achieve universal primary education; promote gender equality and empower women; reduce child mortality; improve maternal health; combat HIV and AIDS, malaria and other diseases; ensure environmental sustainability; and develop a global partnership for development.

6.2 The MDGs, with each one’s targets and indicators, are set out in more detail at Annex of this chapter of our Report. The target date for achievement is 2015.

The Rio+20 Conference

6.3 “Rio+20” is the short name for the United Nations Conference on Sustainable Development which took place in Rio de Janeiro in June 2012 — 20 years after the landmark 1992 Rio Earth Summit. The Rio+20 conference was the biggest UN conference

18 The full text of the UN Millennium Development Goals Declaration is at

http://www.un.org/millennium/declaration/ares552e.pdf.


ever: world leaders, along with thousands of participants from the private sector, NGOs and other groups, came together to discuss how to reduce poverty, advance social equity and ensure environmental protection on an ever more crowded planet.

6.4 The official discussions focussed on two main themes: how to build a green economy to achieve sustainable development and lift people out of poverty; and how to improve international coordination for sustainable development.

6.5 More than $513 billion was pledged to build a sustainable future. At its conclusion, UN Secretary-General Ban Ki-moon said:

“Rio+20 has given us a solid platform to build on. And it has given us the tools to build with. The work starts now”.19

The Commission Communication

6.6 This Communication sets out the Commission’s view on the international post-2015 development agenda: ending poverty and ensuring that future prosperity and well-being are sustainable. It brings together the debate about what international framework should succeed the MDGs and the process to establish new Sustainable Development Goals (SDGs) arising from the Rio+20 — where government leaders agreed that the new SDGs should be coherent and integrated with the post-2015 development agenda.

6.7 The Commission notes that in autumn 2013, a UN special event will take stock of the efforts made towards achieving the MDGs, discuss ways to accelerate progress until the MDG target year of 2015 and consider what could follow after 2015. The Commission first identifies the main global challenges and opportunities. It then evaluates the success of the global poverty eradication agenda and the experience of the MDGs thus far, as well as outlining some of the key steps towards sustainable development as agreed in Rio+20, and outlines key actions. It then describes what the Commission sees as the challenges and elements for a future framework that can be drawn from the experience of the MDGs and the work stemming from Rio+20, in particular the elaboration of SDGs, and indicates how these can be brought together within relevant UN processes.

6.8 The Communication argues that the MDGs had a significant and positive impact and outlines where there has been some success in meeting their targets (e.g. on income and access to safe drinking water). However, it also acknowledges that many targets in the MDGs were not met and that there are weaknesses and gaps in the MDGs as a framework for development.

6.9 The Commission also recognises that, alongside the agreement to develop SDGs, there are other Rio+20 outcomes driving international action and governance on sustainable development, including institutional reform to promote stronger coherence and coordination on sustainable development within the UN system.

6.10 The document includes two annexes: a comprehensive table of current and forthcoming actions in the EU and internationally that contribute to the implementation

19 See http://www.un.org/en/sustainablefuture/ for full information on Rio+20.


of Rio+ 20; and a summary of a consultation exercise on the MDG review process and the outcomes of Rio+20 held in summer 2012.

6.11 Building on the “fundamental link between environmental sustainability and poverty eradication” the Commission supports a single overarching framework and integration of the MDG review and SDG process and highlights the future challenges posed by climate change and resource scarcity, and their potential on poverty eradication. That single framework should have five “priority elements”:

— meeting basic living standards;

— promoting drivers for inclusive and sustainable growth;

— ensuring sustainable management of natural resources;

— upholding equality, equity and justice; and

— peace and security.

6.12 The framework should:

— integrate the three dimensions of sustainable development: economic, social and environmental;

— recognise that poverty, prosperity and well-being are multidimensional;

— cover basic human development, drivers for sustainable and inclusive growth and sustainable management of natural resources;

— address justice, equality and equity, capturing issues relating to human rights, democracy, the rule of law, empowerment of women and gender equality;

— have limited goals that are evidence-based, apply universally but respect different national contexts;

— be developed in partnership with civil society and private sector;

— have goals and targets for 2030 and include a vision to 2050.

6.13 The Commission continues that, at the same time, the framework should:

— underline that responsibility for delivery is national but also that resources need to be mobilised from domestic, international, public and private sources; involve a range of national and international actors, public and private in delivery; all countries should contribute their fair share and the goals should induce stronger accountability;

— be accompanied by efforts to enhance coherence at the institutional level; and

— be coherent with existing internationally-agreed goals and targets.

6.14 In the immediate future, the Commission wants the adoption of this Communication to be followed by a debate with the Council and the European Parliament during the spring of 2013. This debate should be around the development of a common EU approach


position on how the SDGs and the MDG review processes should best be converged and integrated into a single process, in order better to deliver a comprehensive, overarching post-2015 framework. Such a debate should:

— ensure a comprehensive follow up to Rio+20 and guide the EU position at the UN Open Working Group (OWG)20 on SDGs, which will report regularly to the UNGA; and

— contribute to the preparation of the UN General Assembly Special Event on the MDGs in autumn 2013, including the report of the Secretary-General and the UN High Level Panel on post-2015, as well as the first meeting of the High-Level Political Forum (HLPF).21


6.15 In their joint Explanatory Memorandum of 19 March 2013, the Parliamentary Under-Secretary of State at the Department for International Development (Lynne Featherstone) and her counterpart at the Department for Environment, Food and Rural Affairs (Richard Benyon), say that the Government strongly supports the key message and policy position in favour of integrating the MDG review and SDG processes towards one single set of goals, focussed on eradicating poverty and embedding the principles of sustainable development: the agendas of ending poverty and sustainable development overlap significantly, and two separate sets of goals could create confusion and competing demands. For these reasons, they also welcome the joint working of the Commissioners for Environment and Development, and the High Representative, in producing this Communication; and say that it will be important that the Commission and the External Action Service continue to work closely together in the months and years to come.

6.16 The Ministers profess themselves broadly content with the “elements” and “principles” set out in the Communication, but also say that it will be “important that the EU and its Member States maintain a high-level and flexible approach while we engage in outreach and consultation with others, and so that we are able to respond to, and engage constructively in, the debate on the post-2015 development agenda over the next 3 years”.

6.17 They note, in particular:

“the importance given to the enablers of poverty eradication, such as absence of conflict, rule of law, transparency, accountability and other elements of open societies and open economies. Gender equality and the empowerment of all girls and women are also fundamental to development. The UK strongly supports the inclusion of sustainable management of natural resources across the development agenda as a critical part of delivering sustainable development.”

20 Rio+20 did not elaborate specific goals but stated that the SDGs should be limited in number, aspirational and easy

to communicate. The goals should address in a balanced way all three dimensions of sustainable development and be coherent with and integrated into the UN development agenda beyond 2015. A 30-member Open Working Group (OWG) of the General Assembly is tasked with preparing a proposal on the SDGs. See http://sustainabledevelopment.un.org/index.php?menu=1549 for full information.

21 The HLPF is co-chaired by the Prime Minister and his counterparts from Indonesia and Liberia.


6.18 The Ministers welcome the references to “the need for a cross sector and international partnership approach to designing and delivering the new framework”, and say:

“The Prime Minister has been clear that the UK is committed to ‘getting our own house in order’ to help unlock increased prosperity in the countries where the world’s poorest live.”

6.19 With regard to the MDGs, the Ministers say:

“The simplicity and focus of the MDGs made them a powerful advocacy tool and created a common vision and strategic language through which the international community could rally. This is why the Government agrees that the post-2015 agenda should retain these qualities in a simple, compelling and ambitious new framework with a limited number of goals.”

6.20 With regard to the proposal in the Communication that the new overarching framework should aspire to provide by 2030 “a decent life for all” and to eradicate poverty wherever it is found, the Ministers say:

“The UK Government argues that the post-2015 framework should be focussed on eradicating extreme poverty achieved through sustainable development — we must retain this focus on the 1 billion people in this situation. Achieving this will involve updating the goals and targets from the MDGs and addressing some elements that were not included in the MDGs. “Finishing the job” will also mean reaching the poorest, most marginalised and most vulnerable people, and the government is supportive of targets and indicators to incentivise and monitor this.

“The UK agrees on the need to set goals and targets for 2030 but does not have a view on the need for a longer-term vision.

“The Government welcomes the references made to the UN Secretary General’s High Level Panel on the post-2015 development agenda, which is co-Chaired by the UK Prime Minister, in his personal capacity, with the Presidents of Liberia and Indonesia. The Panel is actively engaged and consulting widely with relevant constituencies at national, regional and global levels. It will provide bold yet practical recommendations to the Secretary General regarding the vision and shape of a post-2015 development agenda that will help respond to the global challenges of the 21st century, building on the MDGs and with a view to ending poverty.”

6.21 The Ministers then outline what they describe as a cross-departmental approach to the post-2015 development agenda: the Cabinet Office leads in such coordination and involves a wide range of relevant departments, such as FCO, DFID, DEFRA and others, including in the Government’s response to this Communication. They also note that the Government is also in regular dialogue with civil society organisations and businesses about this Communication.

6.22 Finally, they say that the Communication “is likely to be responded to in some form” by both the Foreign Affairs Council (Development Ministers) on 27 May and Environment Council on 18 June.


Conclusion

6.23 The Ministers are somewhat vague about the Commission’s proposed way ahead. Our assumption is that Council Conclusions will be adopted by one or both of the Councils to which they refer, and that the Commission will then produce a further Communication in the run-up to the UN General Assembly Special Event. Given the significance of the topics under discussion, we envisage that a debate might well be appropriate — either before or after this event, depending on the timing of any further Communication and the summer recess.

6.24 In the first instance, however, we would like the Ministers to provide us with details of the Council’s response in due course, and at that time, information about the next steps.

6.25 In the meantime, we shall retain the document under scrutiny.

6.26 We are also drawing this chapter of our Report to the attention of the International Development Committee.

Annex: The Millennium Development Goals, Targets and Indicators

Millennium Development Goals (MDGs)

Goals and Targets (from the Millennium Declaration)

Indicators for monitoring progress

GOAL 1: ERADICATE EXTREME POVERTY AND HUNGER

Target 1: Halve, between 1990 and 2015, the proportion of people whose income is less than less than one dollar a day

1. Proportion of population below $1 (PPP) per day 2. Poverty gap ratio [incidence x depth of poverty] 3. Share of poorest quintile in national consumption

Target 2: Halve, between 1990 and 2015, the proportion of people who suffer from hunger

4. Prevalence of underweight children under-five years of age 5. Proportion of population below minimum level of dietary energy consumption

GOAL 2: ACHIEVE UNIVERSAL PRIMARY EDUCATION

Target 3: Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling

6. Net enrolment ratio in primary education 7. Proportion of pupils starting grade 1 who reach grade 5b 8. Literacy rate of 15–24 year-olds

GOAL 3: PROMOTE GENDER EQUALITY AND EMPOWER WOMEN

Target 4: Eliminate gender disparity in primary and secondary education, preferably by 2005, and in all levels of education no later than 2015

9. Ratios of girls to boys in primary, secondary and tertiary education 10. Ratio of literate women to men, 15–24 years old 11. Share of women in wage employment in the non-agricultural sector


12. Proportion of seats held by women in national parliament

GOAL 4: REDUCE CHILD MORTALITY

Target 5: Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate

13. Under-five mortality rate 14. Infant mortality rate 15. Proportion of 1 year-old children immunised against measles

GOAL 5: IMPROVE MATERNAL HEALTH

Target 6: Reduce by three-quarters, between 1990 and 2015, the maternal mortality ratio

16. Maternal mortality ratio 17. Proportion of births attended by skilled health personnel

GOAL 6: COMBAT HIV/AIDS, MALARIA AND OTHER DISEASES

Target 7: Have halted by 2015 and begun to reverse the spread of HIV/AIDS

18. HIV prevalence among pregnant women aged 15–24 years 19. Condom use rate of the contraceptive prevalence rate 19a. Condom use at last high-risk sex 19b. Percentage of population aged 15–24 years with comprehensive correct knowledge of HIV/AIDS 19c. Contraceptive prevalence rate 20. Ratio of school attendance of orphans to school attendance of non-orphans aged 10–14 years

Target 8: Have halted by 2015 and begun to reverse the incidence of malaria and other major diseases

21. Prevalence and death rates associated with malaria 22. Proportion of population in malaria-risk areas using effective malaria prevention and treatment measures 23. Prevalence and death rates associated with tuberculosis 24. Proportion of tuberculosis cases detected and cured under directly observed treatment short course DOTS (Internationally recommended TB control strategy)

GOAL 7: ENSURE ENVIRONMENTAL SUSTAINABILITY

Target 9: Integrate the principles of sustainable development into country policies and programmes and reverse the loss of environmental resources

25. Proportion of land area covered by forest 26. Ratio of area protected to maintain biological diversity to surface area 27. Energy use (kg oil equivalent) per $1 GDP (PPP) 28. Carbon dioxide emissions per capita and consumption of ozone-depleting CFCs (ODP tons) 29. Proportion of population using solid fuels

Target 10: Halve, by 2015, the proportion of people without sustainable access to safe drinking water and basic sanitation

30. Proportion of population with sustainable access to an improved water source, urban and rural 31. Proportion of population with access to improved sanitation, urban and rural


Target 11: By 2020, to have achieved a significant improvement in the lives of at least 100 million slum dwellers

32. Proportion of households with access to secure tenure

GOAL 8: DEVELOP A GLOBAL PARTNERSHIP FOR DEVELOPMENT

Target 12: Develop further an open, rule-based, predictable, nondiscriminatory trading and financial system Includes a commitment to good governance, development, and poverty reduction – both nationally and internationally Target 13: Address the Special Needs of the Least Developed Countries Includes: tariff and quota free access for LDC exports; enhanced programme of debt relief for HIPC and cancellation of official bilateral debt; and more generous ODA for countries committed to poverty reduction Target 14: Address the Special Needs of landlocked countries and small island developing states (through Barbados Programme and 22nd General Assembly provisions) Target 15: Deal comprehensively with the debt problems of developing countries through national and international measures in order to make debt sustainable in the long term

Some of the indicators listed below will be monitored separately for the Least Developed Countries (LDCs), Africa, landlocked countries and small island developing states.

Official Development Assistance

32. Net ODA as percentage of DAC donors’ GNI [targets of 0.7% in total and 0.15% for LDCs] 33. Proportion of ODA to basic social services (basic education, primary health care, nutrition, safe water and sanitation)

34. Proportion of ODA that is untied 35. Proportion of ODA for environment in small island developing states 36. Proportion of ODA for transport sector in land-locked countries Market Access 37. Proportion of exports (by value and excluding arms) admitted free of duties and quotas 38. Average tariffs and quotas on agricultural products and textiles and clothing 39. Domestic and export agricultural subsidies in OECD countries 40. Proportion of ODA provided to help build trade capacity Debt Sustainability 41. Proportion of official bilateral HIPC debt cancelled 42. Debt service as a percentage of exports of goods and services 43. Proportion of ODA provided as debt relief

44. Number of countries reaching HIPC decision and completion points

Target 16: In co-operation with developing countries, develop and implement strategies for decent and productive work for youth

45. Unemployment rate of 15–24 years old

Target 17: In co-operation with pharmaceutical companies, provide access to affordable essential drugs in developing countries

46. Proportion of population with access to affordable essential drugs on a sustainable basis


Target 18: In co-operation with the private sector, make available the benefits of new technologies, especially information and communication

47. Telephone lines per 1000 people

48. Personal computers per 1000 people Other Indicators TBD

The selection of indicators for Goals 7 and 8 is subject to further refinement

7 Financial assistance for non-eurozone Member States

(a) (34077) 12201/12 COM(12) 336 (b) (34657) 5477/13 —

Draft Regulation establishing a facility for providing financial assistance for Member States whose currency is not the euro ECB Opinion on a draft Council Regulation establishing a facility for providing financial assistance for Member States whose currency is not the euro (CON/2013/2)

Legal base (a) Article 352 TFEU; consent; unanimity

(b) ―Department HM Treasury Basis of consideration Minister’s letter of 27 March 2013 Previous Committee Reports (a) HC 86–xi (2012–13), chapter 15 (5 September

2012) (b) HC 86–xxxv (2012–13), chapter 13 (13 March 2013)

Discussion in Council Not known Committee’s assessment Documents legally and politically important Committee’s decision Not cleared; further information requested

Background

7.1 Council Regulation (EC) 332/2002 established a medium term financial assistance facility for Member States whose currency is not the euro, known as the EU balance of payments facility. Decisions to grant such financial assistance, by way of conditional loans, are made by the Council and the total of loans outstanding may not exceed €50 billion (£40.34 billion).

7.2 In June 2012 the Commission presented this draft Regulation, document (a), seeking to develop the facility, primarily in four ways:


• introducing two new instruments ― enhanced conditions credit lines (ECCL) and precautionary conditioned credit lines (PCCL) to the facility, which can currently provide a “loan or appropriate financing facility”;

• specifying the form of monitoring to apply throughout a programme and potential suspension of programme and other EU funds resulting from non-compliance with programme conditionality ― this includes eliminating duplicate reporting requirements under the European Semester and for countries under the Excessive Deficit and the Macro-economic Imbalances Procedures;

• increasing the involvement of relevant institutions (European Parliament, European Central Bank (ECB), European Supervisory Authorities (ESAs)) in the agreement, surveillance and progress of programmes; and

• simplifying and codifying existing activation procedures, not provided for in the current Regulation.

7.3 The total amount available would remain unchanged, with decision making remaining with the Council.

7.4 In this Opinion, document (b), the ECB shows itself broadly supportive of the draft Regulation and does not highlight any areas of real concern.

7.5 When, in September 2012, we considered the draft Regulation, although acknowledging the Government’s support for the intentions of the proposal, we noted that it was considering the implications for the UK. Most importantly, we assumed that the Government was considering the implication of the use of Article 352 TFEU for the provisions of Section 8 of the European Union Act 2011. So before considering the matter further we asked to hear about the outcome of those considerations. Meanwhile the draft Regulation remained (and remains) under scrutiny.

7.6 When, last month, we considered the ECB Opinion we noted that:

• the Government did not comment directly on the Opinion, instead it merely reminded us that the Government was considering the implications of the proposed Regulation for the UK and would ensure that the national interest was protected; and

• it told us that there was currently no agreed timetable for the draft Regulation and that the Irish Presidency work programme did not include any reference to it.

7.7 We commented that we had noted that the Government was considering the implications of the draft Regulation for the UK ― and, importantly, had assumed that this included the implication of the use of Article 352 TFEU for the provisions of Section 8 of the European Union Act 2011 ― and had asked to hear about the outcome of those considerations. We said that we assumed that the response to that request would be taking


into account any relevant aspects of the ECB Opinion. Meanwhile that document also remains under scrutiny.22

The Minister’s letter

7.8 The Financial Secretary to the Treasury (Greg Clark) writes now to update us on the timetable for discussing the draft Regulation. He says that:

• the timetable has still not been agreed and there is no indication that the dossier is to be taken forward in the near future;

• it is currently not on the Irish Presidency’s Council work programme;

• there is also as yet, no further clarity on the read across to the Banking Union proposals that would influence the draft Regulation; and

• he will write with an assessment of the proposal and the Government’s position on it when the issue is taken forward, taking into account relevant aspects of the ECB Opinion.

7.9 The Minister adds that it is correct that, as with any proposal for legislation with a legal base of Article 352 TFEU, this proposal, as and when it proceeds, would require not only unanimous support from the Member States in the Council but also an Act of Parliament.

Conclusion

7.10 We are grateful to the Minister for these comments and look forward to having in due course an assessment of the proposal and the Government’s position on it, taking into account relevant aspects of the ECB Opinion. Meanwhile both documents remain under scrutiny.

22 See headnote.


8 Economic and Monetary Union

(a) (34794) 6849/13 COM(13) 165 (b) (34795) 7945/13 COM(13) 166

Commission Communication: Towards a deep and genuine Economic and Monetary Union — the introduction of a Convergence and Competitiveness Instrument Commission Communication: Towards a deep and genuine Economic and Monetary Union — ex ante coordination of plans for major economic policy reforms

Legal base — Documents originated 20 March 2013 Deposited in Parliament (a) 26 March 2013

(b) 25 March 2013 Department HM Treasury Basis of consideration Two EMs of 5 April 2013 Previous Committee Report None Discussion in Council (a) 27–28 June 2013 (European Council)

(b) Not known Committee’s assessment Politically important Committee’s decision Not cleared; further information requested

Background

8.1 In recent years various measures have been discussed, and some introduced, to strengthen economic governance in the eurozone and in the wider EU. Much of this activity has been concerned with countering the present eurozone difficulties. Measures introduced or proposed include the “Six Pack” of legislation strengthening the Stability and Growth Pact, the Treaty for Stability Coordination and Governance (TSCG), the “Two Pack” of proposed legislation aimed at strengthening economic governance in the eurozone and proposals for a “Banking Union” concerning supervision of the banking sector, with a Single Supervisory Mechanism.

8.2 The Commission’s Communication A blueprint for a deep and genuine EMU — Launching a European debate and the President of the European Council’s Report Towards a genuine Economic and Monetary Union contained proposals for short-, medium- and long-term measures on how to strengthen cooperation and integration in the financial, fiscal, economic and political fields. Among the issues to be implemented in the short run to complete the governance framework for economic policy coordination in general, and for the single currency in particular, were “contractual arrangements” combined with a solidarity mechanism for national structural reforms for competitiveness and growth, lack of implementation of which would have a spillover effect on other Member States but


implementation of which would need to be carried out by the Member State under particular stress.23

The documents

8.3 In its Communication, document (a), the Commission discusses introduction of a Convergence and Competiveness Instrument (CCI), that would combine a contractual arrangement linked to certain key reforms, with a mechanism for financial support for the implementation of these reforms. It presents options and poses 18 questions to elicit input from stakeholders on what should be the scope of the CCI, which Member States should be eligible, how it should be financed and how it should fit into the overall system of economic governance of the eurozone and the EU. The Commission “aims to address these questions as part of the debate which is now underway between key stakeholders on the next steps towards the completion of the EMU, in particular the European Parliament, the Member States and the national parliaments”.

8.4 The Commission says that the aim is to help Member States facing a difficulty that may affect the entire eurozone to undertake necessary reforms through a CCI sooner than they would be able to do on their own. It comments that the proposal for mutually agreed contracts supported by a solidarity mechanism would provide “solidarity” in the form of financial help to support “increased economic responsibility and fiscal discipline” which would be set out clearly and with conditions through “contractual arrangements”.

8.5 The Commission suggests that:

• as part of the new economic governance of the eurozone and of the EU, there is a need to ensure that the structural reforms which are needed to remove key weaknesses in some economies take place and take place earlier than has recently been the case;

• its proposal is an instrument “designed to meet the specific needs that arise from euro area membership”;

• the existing economic surveillance framework should be expanded to include the use of a dedicated instrument that would assist Member States undertaking certain key reforms;

• while such reforms are first and foremost in the interest of the Member State undertaking them, they are also in the interest of the wider eurozone and EU — more resilient Member States contribute positively to the wellbeing of their partners, while delaying necessary reforms because of short term negative domestic impacts can have negative spill over effects on other partners; and

• safeguards against moral hazard would be needed to ensure that reforms were not delayed with a view to becoming eligible for financial assistance and to guard against financing reforms that should be undertaken anyway.

23 (34452) —; (34453) —: see HC 86–xxiv (2012–13) 12 December 2012 and HC 86–xxviii (2012–13) 16 January 2013.


8.6 Under the arrangements canvassed by the Commission:

• the “contractual arrangement” would build on the existing EU surveillance framework and would link the policy guidance resulting from the Country Specific Recommendations in the European Semester and the national process of structural reform implementation;

• the CCI could cover the eurozone Member States, excluding those with a macroeconomic adjustment programme, and ways should be found to allow non-eurozone Member States to take part, in particular those preparing for adoption of the euro;

• use of the CCI might be available to all participating Member States, available when a participating Member State is under the Macroeconomic Imbalances Procedure or available following an invitation by the Commission to a participating Member State;

• for voluntary participation Member States could present a plan for a set of concrete reforms with clear deadlines, building on relevant Country Specific Recommendations;

• if the CCI applied to eurozone Member States under the preventative arm of the Macroeconomic Imbalances Procedure, the proposed reforms should include the recommendations under procedure, in particular measures addressing competitiveness, promoting financial stability and improving the functioning of labour, product and services market and thus the capacity of the economy;

• for eurozone Member States under the excessive imbalance procedure, in order to avoid overlapping surveillance tools, the mandatory Corrective Action Plan would replace a contractual arrangement — in this case, the CCI would speed up the correction of imbalances;

• Member States’ reform plans would be assessed by the Commission, including for the appropriateness of the proposed measures, the additional reform effort and the extent to which they address the economic weaknesses which are taken up in the relevant Country Specific Recommendations

• on the basis of its assessment, the Commission would negotiate the details of the plan with the proposing Member State before making a formal proposal to the Council to approve the contractual arrangement;

• the Council would then approve (possibly with modifications) the specific actions proposed together with the agreed timetable;

• should the Member State and Commission fail to reach an agreement, or should the Council disagree with the arrangement, there would be no contractual arrangement and consequently no financial support;

• the Commission would monitor implementation of the arrangement on an annual basis as part of the European Semester, with Member States reporting on progress in their National Reform Programmes and, where needed, both the Commission


and the Member State could propose changes to the contractual arrangement, leading to a new negotiating process;

• increased EU involvement in the reform process would necessitate a timely and active involvement of national parliaments and other relevant national stakeholders;

• Member States would need to ensure national commitment to the implementation of the contractual arrangements by involving their national parliamentary assemblies, preferably before submission of their plans for a set of concrete reforms and in all circumstances, national parliaments should be involved before the endorsement of the contractual arrangements by the Council;

• in order to ensure democratic legitimacy and accountability at EU level, the European Parliament should be fully involved;

• one option for funding would be for all participating Member States to contribute, (though the Commission is considering different options);

• irrespective of the option chosen, the mechanism could be based either on dedicated contributions, for example on the basis of a GNI key, or on the proceeds of new specific financial resources dedicated to it;

• the mechanism would be included in the EU budget as external assigned revenues;

• to maximise its potential impact, the Commission is considering proposing that the financial support would be committed up front at the moment of approval of the contractual arrangement and paid in regular instalments or instalments otherwise linked to the agreed timetable for reforms;

• the financial support would be conditional on the full and timely implementation of the reforms set out in the arrangement; and

• the Commission could issue warnings if a Member State does not meet the contract, requesting the Member State to correct the deviation, with a new timeline — were this is not met, the financial support would be withheld.

8.7 As for the next steps the Commission says that “On the basis of further discussion with the European Parliament and the Council, [it] will make a proposal in the course of 2013”.

8.8 The Commission introduces its Communication about ex ante coordination of plans for major economic policy reforms, document (b), by saying that:

“The new economic surveillance architecture in the EU, and in the Euro area in particular, provides for differentiation between Member States depending on their economic conditions. This is reflected in different policy instruments ranging from preventive surveillance through the European Semester [implemented through the Europe 2020 Strategy and the preventive arms of the Stability and Growth Pact and the Macroeconomic Imbalances Procedure] to corrective surveillance [under the corrective arms of the Stability and Growth Pact and the Macroeconomic Imbalances


Procedure] to crisis surveillance of a Member State that seeks recourse to the backstops.

“To complement this governance framework, the Commission considers it important that national plans for any major economic policy reforms are assessed and discussed at EU-level before final decisions are taken at the national level. This would also ensure that Member States internalise the EU-level dimension of key reforms in their national decision-making process. This is what is known as ex ante coordination, which also reflects the spirit of Article 121(1) of the Treaty [‘Member States shall regard their economic policies as a matter of common concern.’]

“The concept of ex ante coordination of plans for major economic policy reforms was introduced by the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (TSCG). Article 11 of the TSCG includes a commitment to discuss ex ante and, where appropriate, coordinate all plans for major economic policy reforms.

“The Commission already set out some reflections on ex ante coordination in its Blueprint for a Deep and Genuine Economic and Monetary Union in November 2012.”

8.9 In its discussion of ex ante coordination the Commission poses 11 questions to elicit input from stakeholders. It says that “This Communication is a contribution to the debate which is now underway between key stakeholders on the next steps towards a deep and genuine EMU, in particular the European Parliament, the Member States, and the national parliaments. It concentrates on ways of implementing ex ante coordination of plans for major economic policy reforms under the existing Treaties”.

8.10 The Commission states that:

• the surveillance of economic, budgetary and structural policies that has been brought together into the European Semester has made the Economic and Monetary Union more robust than it was at the onset of the crisis and better equipped for the future;

• the new economic surveillance architecture in the EU, and in the eurozone in particular, provides scope for differentiation between Member States depending on their economic conditions;

• to complement this existing governance framework, it is important that national plans for any major economic policy reforms are assessed and discussed at EU-level before final decisions are taken at national level;

• this would ensure that Member States internalise the EU-level dimension of these key reforms in their national decision-making process;

• this is what the Commission considers as ex ante coordination;

• although the current EU economic surveillance framework includes a process for economic policy coordination, it does not provide for a structured ex ante discussion and coordination of major economic reform plans, as foreseen in


Article 11 of the TSCG, which initially introduced the concept of ex ante coordination of major economic reform plans.

8.11 The Commission suggests that ex ante coordination should concern only major national economic reform plans, which would be selected based on the following filters:

• trade and competitiveness — the Commission says that these are among the main channels through which spillovers are transmitted and that product, services and labour market reforms, as well as certain tax reforms, may affect employment and growth in the implementing Member State and hence the demand for products and services from other Member States;

• spillovers through financial markets — the Commission says that these may occur when reforms increase the Member State’s ability to withstand external shocks and limit the risk of contagion of risk premiums in case of concerns with regard to debt sustainability; and

• political economy considerations — the Commission says that coordinated reforms across Member States can help communicate the broader welfare effects of structural reform, that Member States can learn from each other’s policies and that benchmarking, mutual learning and the exchange of best practices across the Member States can be helpful.

8.12 The Commission suggests a framework for ex ante coordination as follows:

• as spillover effects are magnified in the eurozone due to stronger interdependence among eurozone Member States, it is the Commission’s intention to establish a binding framework for all eurozone Member States

• ex ante coordination could, however, be extended to the non-zone Member States, which would reflect the spirit of Article 121(1) TFEU;

• coordination would form an integral part of the European Semester;

• Member States would submit to the Commission their major economic reform plans in a timely manner and at any time in the year — National Reform Programmes could be an appropriate method to submit the information and the Commission or Council could invite Member States to submit information;

• the Commission would make an assessment of the plan and adopt an opinion — sufficient time would be needed to allow a proper assessment, while, at the same time, the national decision-making process should be taken into account;

• the assessment would cover the extent to which the reform is likely to meet its declared purpose and contribute to improving competitiveness and the adjustment capacity of the Member State and the social dimension would be taken into account;

• the assessment would pay specific attention to the impact of the reform on the functioning of the eurozone and possible spillover effects on other Member States;


• the Commission assessment would be presented to the Council which could suggest modifications to the reform plan should it be justified by the expected effects on other Member States and the functioning of the Economic and Monetary Union;

• Commission and Council opinions would be taken into account in advice issued to Member States in the context of the European Semester;

• direct legitimacy and accountability of the process must start with national democratic institutions;

• the new process would fully respect national decision-making powers, with the decision on the reform plan remaining with the Member State itself; and

• the relevant committee of the European Parliament could offer the opportunity to the Commission, the President of the Council or the President of the Eurogroup to appear before the committee to discuss the Commission opinion on a Member State’s reform plans and any conclusions of the discussions in the Council.

8.13 In regard to the next steps the Commission says that “Following this consultation and other discussions with the European Parliament and the Council, the Commission will make a formal legislative proposal, in the framework of existing Treaties, in the course of 2013.”


8.14 In his Explanatory Memorandum about the Commission Communication on a Convergence and Competitiveness Instrument, document (a), the Financial Secretary to the Treasury (Greg Clark) says that:

• the Government welcomes the efforts the eurozone is making to resolve the current crisis and to put in place a more stable framework to avoid future crises;

• it considers that introduction of a CCI for the eurozone could be a potentially valuable addition to its surveillance tools, which may help to strengthen the governance and stability of the eurozone by tackling spillovers between eurozone Member States and ensuring that necessary reforms are undertaken;

• the Government welcomes that the Commission is clear that this measure would not automatically cover all Member States, which is right as these challenges stem from the single currency;

• there are still many unresolved issues, including the precise procedure that will be used, the interface with the existing European Semester process and the source of funding for financial support;

• the Government will be involved in negotiations in order to best serve the national interest; and

• following this consultation, the CCI will be discussed at the June European Council.


8.15 In his second Explanatory Memorandum, on the Commission Communication about ex ante coordination, document (b), the Minister says, again, that the Government welcomes the efforts the eurozone is making to resolve the current crisis and put in place a more stable framework to avoid future crises. He continues that:

• the Government considers that ex ante coordination for the eurozone could be another potentially valuable addition to its surveillance tools, which may help to strengthen the governance and stability of the eurozone, again by tackling spillovers between eurozone Member States;

• it welcomes that the Commission is clear that this measure would be binding for eurozone Member States only — the UK will not automatically be covered which is right as these challenges stem from the single currency;

• there are still unresolved issues, including which reforms should be covered and the precise procedure that will be used; and

• the Government will be involved in negotiations in order to best serve the national interest.

Conclusion

8.16 Although the ideas the Commission canvasses in these two Communications appear to have no immediate direct implications for the UK, they may lead to important developments with indirect effects on the UK. Although the Communications are partially framed as consultations, we presume that the matters discussed will be carried forward with the Commission in discussions and negotiations, rather than in formal governmental responses. Nevertheless we should like to hear about developments on the Commission’s proposals in either of the Communications before the June European Council. Meanwhile the documents remain under scrutiny.


9 Entry and residence of third country nationals

(34791) 7869/13 COM(13) 151 + ADDs 1–2

Draft Directive on the conditions of entry and residence of third country nationals for the purposes of research, studies, pupil exchanges, remunerated and unremunerated training, voluntary service and au pairing Commission staff working documents: Impact assessments

Legal base Article 79(2) (a) and (b) TFEU; co-decision; QMV Document originated 25 March 2013 Deposited in Parliament 26 March 2013 Department Home Office Basis of consideration EM of 9 April 2013 Previous Committee Report None Discussion in Council No date set Committee’s assessment Politically important Committee’s decision Not cleared; further information requested

Background

9.1 Two Directives adopted in 2004 and 2005 establish common rules on the entry and residence of third country (non-EU) nationals to purse a full-time course of study at a higher educational establishment or to carry out post-graduate research at an approved research organisation within the European Union.24 Both are intended to promote Europe as a centre of excellence for academic study and research. Prospective students or researchers must be able to demonstrate that they have sickness insurance and sufficient means to cover their living and return travel costs without recourse to social assistance in the host Member State. Once admitted, students and researchers are entitled to work or teach (although the host Member State may limit the maximum number of working or teaching hours), and researchers enjoy a more extensive range of rights intended to secure equal treatment with EU nationals on such matters as the recognition of qualifications, working conditions, and access to goods and services. Both Directives include limited provision for students and researchers to continue their studies or research in a second Member State.

9.2 The Directives are based on provisions of the EC Treaty (now contained in Article 79(2) of the Treaty on the Functioning of the European Union) which give the EU competence to develop a common immigration policy, including determining the conditions of entry and residence for third country nationals and the rights of those legally resident in a Member State. These provisions are subject to the UK’s justice and home

24 See Council Directive 2004/114/EC on the conditions of admission of third country nationals for the purposes of

studies, pupil exchange, unremunerated training or voluntary service, OJ No. L 375, 23.12.2004, p.12 and Council Directive 2005/71/EC on a specific procedure for admitting third country nationals for the purposes of scientific research, OJ No. L 289, 03.11.2005, p.15.


affairs opt-in. The UK did not take part in the adoption of the Directives and is not bound by them.

9.3 The Commission considers that there are significant weaknesses in the operation of the Directives. In particular, it notes that the option given to Member States to extend the application of the 2004 Directive on students to pupil exchange schemes, unremunerated trainees and volunteers has resulted in a fragmented legal framework, as ten Member States have chosen to apply the rules to all three groups, five apply the rules to one or two of the three optional groups, and the remaining Member States have maintained their own national rules. Other concerns highlighted by the Commission include:

• delays in issuing visas or residence permits to students or researchers who meet the conditions for admission set out in the Directives;

• lack of clarity regarding the practical application of the rules, for example, the type of evidence needed to demonstrate that a student has adequate means of subsistence for the duration of his or her course of study;

• difficulties in implementing the provisions on mobility between Member States;

• absence of time limits for deciding applications for admission as a student or researcher;

• excessive limitations on the ability of students to work;

• absence of common rules entitling students or researchers to remain for a temporary period after completion of their studies or research projects in order to seek employment; and

• lack of provision for family members accompanying researchers to seek employment in the host Member State.

9.4 In addition, the Commission considers that the scope of the Directives is too narrow. Neither includes provisions on remunerated trainees or on au pairs even though both are often used to bridge the gap between education and the labour market and may be vulnerable to exploitation.

The draft Directive

9.5 The Commission has proposed a “recast” Directive which would repeal and replace the existing Directives, extend their scope to remunerated trainees and au pairs, and bring together within a single instrument all of the provisions governing entry and residence. It believes that a more comprehensive set of common rules is needed to attract talent to the EU, boost the competitiveness of the European economy through research and innovation, foster the transfer of skills and the development of human capital and cultural exchanges whilst also ensuring fair treatment for those third country nationals admitted to the EU.

9.6 The draft Directive is intended to establish a more coherent legal framework for third country nationals admitted for the purposes of study, research, training, voluntary service or au pair work. The conditions for the admission of students, researchers, school pupils


and volunteers largely reflect existing rules, but there are new provisions on the admission of au pairs which seek to ensure that the host family accepts responsibility for their well-being and that the rights and obligations of the parties concerned are set out in an agreement. In addition, agreements for trainees must include information on working hours, supervision and any remuneration provided.

9.7 Other changes include:

• a clearer statement of the grounds on which an application for admission should be rejected or an authorisation already given should be withdrawn or may not be renewed;

• clarification of the rights enjoyed by the different categories of third country nationals admitted under the draft Directive;

• an extension of the right of students to work from a minimum of 10 to at least 20 hours per week;

• the introduction of a right for students and researchers to remain in the host Member State after completion of their studies or research for up to 12 months in order to look for work or set up a business (subject to intermediate checks to ensure that they are genuinely seeking employment);

• a strengthening of the right of family members to accompany third country national researchers and to access the labour market in the host Member State;

• the inclusion of more favourable provisions on mobility within the EU in order to pursue studies, training or research in a second Member State;

• the introduction of specific time limits for reaching a decision on applications for admission; and

• a requirement for Member States to publicise information on entry and residence conditions for third country nationals seeking admission under the Directive, including an indication of the minimum monthly subsistence resources needed, and to designate contact points to exchange information on researchers, trainees or students moving between Member States.

9.8 The Commission’s Impact Assessment accompanying the draft Directive (ADD 1) acknowledges that immigration authorities in most Member States consider that the existing legal framework works well and are reluctant to make further changes. By contrast, stakeholders in the field of education, research and youth exchanges express strong support for a strengthening of the framework to improve conditions for admission and associated rights. The Commission believes that changes to existing EU immigration rules are needed to improve Member States’ capacity to attract talent from outside the EU:

“Although each Member State could continue to have its own national system of admitting the third country national groups concerned by this proposal, this would not achieve the general objective of increasing the attractiveness of the EU as a destination for talented migrants. Having one set of common admission and


residence requirements rather than a fragmented situation with diverging national rules is clearly more efficient and simpler for potential applicants as well as for organisations involved than having to look into and deal with 27 different systems. In addition, the promotion of intra-EU mobility, one of the key objectives of this proposal, requires an EU-wide instrument.”25

9.9 The Commission also highlights the need to ensure a minimum level of protection, particularly for categories (such as au pairs and trainees) that may be vulnerable to exploitation. It suggests that a transparent legal framework incorporating appropriate safeguards will promote the EU as a centre of excellence for study, research and training and facilitate a genuine transfer of skills.

9.10 The legal base for the draft Directive — Article 79(2) TFEU — forms part of the provisions in Title V of Part Three of the Treaty on the Functioning of the European Union and is subject to the UK’s Title V opt-in.


9.11 The Minister for Immigration (Mr Mark Harper) notes that the UK does not participate in the 2004 and 2005 Directives which the Commission proposal would replace and questions whether there is a need for further EU action, adding:

“The Government’s general view is that arrangements for the entry and stay of third country economic migrants are best determined at national level in order that they can be adjusted flexibly in response to national assessments of economic need. The Government’s freedom to adjust immigration policy in support of its objective of reducing net migration may be undermined by the adoption of measures aimed at delivering a common EU immigration policy.”26

9.12 The Minister suggests that Member States should be free to determine, on the basis of an assessment of prevailing skill shortages, whether third country nationals should be able to access the labour market in their host Member State after completion of their studies or research. He also considers that the risk of exploitation of vulnerable migrants can be adequately addressed at national level. He acknowledges, however, that,

“it is clearly arguable that arrangements aimed at promoting the intra-EU movement of a particular group of third country nationals would require the adoption of common criteria for their admission from outside the EU. To that extent only, the proposal is compliant with the principle of subsidiarity.”27

9.13 Turning to the substance of the draft Directive, the Minister describes how it would affect the admission of third country nationals seeking entry to the UK for the purpose of study, training, research and voluntary work under the UK’s Points Based System. He suggests that the proposed admission conditions for students fall short of the UK’s domestic requirements, which require a third country student to be sponsored by an

25 See p.8 of the Commission’s explanatory memorandum accompanying the draft Directive.

26 See para 13 of the Minister’s Explanatory Memorandum.



educational institution licensed by the Home Office. He adds that there is no explicit provision in the draft Directive for applying a language competence test28 or for refusing an application for admission if the authorities are not satisfied that a third country student genuinely intends to pursue the course of study for which he or she has enrolled.

9.14 Entry requirements for researchers bear some similarity to the sponsorship system in place in the UK, but the Minister suggests that the arrangements would be less flexible and make it difficult to distinguish between third country researchers who are “leaders in their field” (and whose admission may not be tied to a specific sponsoring employer or research organisation) and others who qualify under a sponsored researchers scheme. Moreover, researchers seeking entry to fill a permanent vacancy may be subject to resident labour market test and a wage parity test, neither of which is provided for in the draft Directive. The Minister concludes, therefore, that,

“the Directive does not offer the right balance between flexible arrangements for those researchers who are leaders in their field and labour market protection, where this is needed.”29

9.15 The Minister notes that the draft Directive would entitle all third country students enrolled at a higher education institution to work for a minimum of 20 hours per week, whereas the UK currently restricts working time for those not studying at degree or post-graduate level to 10 hours. He continues:

“The UK’s existing restrictions are an important pillar of the reforms introduced by the Government to address the high levels of abuse previously seen in the student route, where large numbers were using the route to work, not study.”30

9.16 The introduction of a right for students and researchers to remain in their host Member State for up to 12 months after completion of their studies or research in order to seek employment or establish a business would undo recent reforms to UK immigration rules. The Minister explains:

“The Government recently abolished the Tier 1 (Post-Study) category of the Points Based System, under which third country nationals who completed graduate-level studies in the UK could be granted two years’ additional leave with unconditional access to the labour market because significant numbers were using the route to do low-skilled work. Students studying a course of 12 months or more now have 4 months added to their visa beyond their course end date. From April 2013, only those completing PhD studies and selected MBA graduates are able to remain for 12 months beyond their course. There does exist the opportunity for students to remain in the UK where they find skilled employment which meets Tier 2 criteria, or alternatively as a graduate entrepreneur but there is no general provision under which they may remain in order to seek work. This is an important aspect of the reforms that the UK has made to ensure that we continue to attract and retain the

28 Article 10(1)(c) does, however, allow Member States to require evidence that an applicant has sufficient knowledge

of the language of the course which he or she intends to study.




brightest and best whilst reducing the use of the student route as a route to low-level work in the UK.”31

9.17 The Minister says that the equal treatment provisions of the draft Directive might require the UK to extend access to certain social security benefits (such as child benefit and income based Jobseekers’ Allowance) for third country researchers in circumstances in which it does not currently do so, adding that the potential cost implications have not yet been quantified.

9.18 He questions whether the provisions on intra-EU mobility between Member States are necessary to make the EU a more attractive destination for third country students, researchers and trainees and says it is not obvious what existing obstacles to movement they are designed to overcome. He continues:

“The Government is not aware that third country nationals that choose to come to the UK for the purpose of research or higher education experience significant problems in travelling to other Member States for purposes connected to their research or studies in the UK.”32

9.19 Moreover, existing UK immigration arrangements do not distinguish between the admission of third country nationals resident in another EU Member State and those applying from outside the EU. The Minister adds:

“It is, furthermore, the Government’s general view that measures which afford third country nationals some degree of entitlement or preference on the basis of their admission to another Member State, in respect of entry to the UK, may tend to undermine the objective of maintaining an effective immigration control and reducing net migration.”33

9.20 The Minister notes that Member States may charge a proportionate fee for processing applications for admission and questions whether this would allow the UK to set fee levels on a cost-recovery basis or to generate revenue to help fund the UK’s immigration system, as is currently the case. He also suggests that the right of appeal conferred by the draft Directive in the event that an application for admission is rejected may be more extensive than that allowed under the UK’s Points Based System and would require a change to primary legislation.

9.21 Finally, the Minister notes that the draft Directive is subject to the UK’s Title V opt-in and that the Government has until 4 July to decide whether or not to opt in. He continues:

“In deciding whether or not to opt in to this measure, the key considerations are likely to be its implications for the control of immigration, financial affordability, implications for the balance of UK and EU competence and issues of ECJ jurisdiction.”34






Conclusion

9.22 We note that the UK does not participate in the 2004 and 2005 Directives establishing the conditions of entry and residence for third country nationals wishing to study or carry out post-graduate research within the European Union. The draft Directive would go further, extending the scope of existing EU measures to include broader categories of third country nationals, increasing the amount of part-time work that students may undertake, and introducing a new right for students and researchers to remain for a temporary period in the host Member State after completion of their studies or research in order to seek work.

9.23 While some elements of the draft Directive are broadly in line with the UK’s Points Based System, others appear to go against the grain of recent immigration reforms. Although the Minister does not indicate whether the Government will choose to exercise the UK’s opt-in, he sets out concerns regarding the justification for EU action and the possible impact of the draft Directive on the Government’s objective of reducing net immigration to the UK. The Minister indicates that the Government’s consultation on the content of the draft Directive will help to inform its opt-in decision. We therefore ask him to inform us of the outcome of the consultation exercise and of the Government’s opt-in decision. Meanwhile, the draft Directive remains under scrutiny.

10 Strategy for the outermost regions of the EU

(34053) 11825/12 + ADD 1 COM(12) 287

Commission Communication: The outermost regions of the European Union — towards a partnership for smart, sustainable and inclusive growth

Legal base — Department Business, Innovation and Skills Basis of consideration Minister’s letter of 26 March 2013 Previous Committee Report HC 86–xi (2012–13), chapter 6 (5 September 2012) Discussion in Council No date set Committee’s assessment Politically important Committee’s decision Cleared


Background

10.1 Since 1999, the EU has recognised the specific circumstances of its outermost regions35 resulting from their remoteness, small size, and economic dependence on a small number of products, and, since 2004, action to address these problems has been based on improving accessibility and competitiveness, and promoting integration with neighbouring regions. Since 2008, there has also been an additional focus on making the most of such assets as their potential for tourism and as a source of renewable energy, the opportunities they provide for the development of space, astrophysics and satellite activities, their importance to global biodiversity, and their capacity to spread EU influence in neighbouring regions.

10.2 This Commission Communication sets out how it can work with the outermost regions to create growth there, whilst taking into account each region’s special characteristics and allowing it to design its own approach. In particular, it says that there needs to be greater emphasis on creating jobs, as well as a comprehensive approach to climate action, and it suggests that the renewed strategy should involve improved accessibility to the single market; increased competitiveness through modernisation and diversification; strengthening regional integration; reinforcing the social dimension; and main-streaming climate action into all relevant policies. This in turn would involve action in a number of areas, including Cohesion policy; continuing support through the European Social Fund and the European Regional Development Fund (ERDF); the development of traditional sectors, such as agriculture, fisheries and tourism, alongside increased support for emerging sectors; developing entrepreneurship; integration into the single market through the development of trans-European transport, telecommunications and energy networks, the digital single market, the adaptation of EU state aid and public procurement rules, specific taxation and customs regimes, better information, improved education and skills, consumer policy and health; and protecting the environment. The strategy’s external dimension would also play a key part in areas such as trade and fisheries, new and more efficient air and maritime routes, local energy markets, improved electronic communication networks, and increased labour mobility.

10.3 As we noted in our Report of 5 September 2012, the Government supported this renewed strategy in principle, but had noted that the Multi-Annual Financial Framework (MFF) for 2014–20 had not yet been agreed, whereas the Commission’s proposals had included a co-financing rate of 85% for the outermost regions under the Cohesion Fund regardless of economic situation, and an increased allocation under the ERDF, thereby placing additional pressure on the EU budget at a time when there was a need for restraint. Consequently, it would want to ensure that the proposed arrangements were adopted within a framework of budgetary restraint called for in the current economic climate. In view of this, we said that, although the document did not in itself raise any issues which required further consideration, we thought it right to hold the document under scrutiny, pending further information on the actual level of EU expenditure to be devoted to this area.

35 Currently defined in the TFEU as the four French overseas departments and regions (Guadeloupe, French Guiana,

Martinique and Reunion) and one overseas territory (St Martin); the two autonomous Portuguese regions (the Azores and Madeira); and one Spanish autonomous Community (the Canary Islands).


Minister’s letter of 26 March

10.4 We have now received from the Minister of State for Business and Enterprise (Michael Fallon) a letter of 26 March, drawing attention to the agreement reached by the February 2013 European Council on the Multi-Annual Financial Framework for 2014–20, and to its implications for the strategy set out in this Communication. He says that the outermost regions will be subject to the same allocation criteria for the Structural and Cohesion funds as other EU regions, and that there will be a slight reduction from €40 to €30 in the special provisions under which they have received additional funding per inhabitant. He adds that the overall budget for European Territorial cooperation for 2014–20 will be broadly similar to funding levels in 2007–13, and that the Government is content with these arrangements.

Conclusion

10.5 We are grateful to the Minister for this update, and we are now content to clear this document.

11 Rethinking education: investing in skills

(34435) 14871/12 + ADDs 1–8 COM(12) 669

Commission Communication: Rethinking Education: Investing in skills for better socio-economic outcomes

Legal base — Department Business, Innovation and Skills Basis of consideration Minister’s letter of 28 March 2013 Previous Committee Report HC 86–xxix (2012–13), chapter 3 (23 January 2013) Discussion in Council 15 February 2013 Committee’s assessment Politically important Committee’s decision Cleared; further information requested


11.1 The purpose of the Communication is to galvanise a wide range of actors to pursue reform of education and vocational training systems in order to provide the skills needed to increase productivity and boost growth and competitiveness. It covers all levels of education and training, from early years to higher education, and vocational and work-based training. It is accompanied by eight Commission staff working documents (ADDs 1–8) providing detailed information and analysis to underpin the policy recommendations contained in the Communication. These fall into two categories: strategic priorities which


Member States need to address as part of their domestic reform processes; and action to be taken at EU level to support and coordinate Member States’ reform efforts.

11.2 The Government assured us that the areas of activity identified in the Communication were broadly in line with UK domestic policy but highlighted a number of concerns regarding the actions proposed at EU level which are described in our Twenty-ninth Report of 23 January 2013. In particular, the Government questioned whether country-specific recommendations issued as part of the European Semester reporting cycle to monitor Member States’ economic and employment policies were an appropriate tool for monitoring Member States’ education and vocational training policies. The Government also indicated that it would seek further information on the Commission’s proposal to analyse the efficiency of public investment in education and training.

11.3 We noted that the Government expected the Education Council to agree Conclusions based on the Communication in February and asked the Minister for Skills (Matthew Hancock) to report back to us on the outcome, explaining how the Government’s concerns had been addressed. We also noted that one of the Commission’s staff working documents, on language competences (ADD 2), proposed establishing a new EU benchmark on language learning which seeks to ensure that, by 2020, at least 50% of 15 year-olds are able to hold a basic conversation in their first foreign language (the EU average is 42%, but only 9% in the UK), and that at least 75% of pupils in lower secondary school study a minimum of two foreign languages (the EU average is 61%). We asked the Minister whether he welcomed the benchmark and how likely the UK was to achieve it by 2020.

The Minister’s letter of 28 March 2013

11.4 The Minister confirms that the Education Council agreed Conclusions at its meeting on 15 February and says that the UK secured a number of important changes, insisting on the inclusion of an explicit reference to the principle of subsidiarity, “noting” rather than “welcoming” various actions to be undertaken by the Commission, and ensuring that any follow-up action to country specific recommendations addressing education and training policies should be a purely voluntary process.36 He adds:

“In my opinion, in delivering Country-Specific Recommendations (CSRs) on national education policy, the EU is operating at the limits of its competence to ‘support and co-ordinate education policies’ as set out in Treaty Articles 165 and 166. It is true, however, that Article 148 of the Treaty (which governs the Europe 2020 process of guidelines, targets etc) makes provision for CSRs on education and training where there is a clear labour market rationale. Against this background, and mindful of the fact that CSRs are non-binding on Member States, our approach is always to try to limit an over-prescriptive approach to education and training and to take every opportunity to remind the Commission that policy in this area is very much a national issue.”

11.5 Turning to discussions within the Council on the draft Conclusions, he continues:

36 See Council Conclusions on investing in education and training — a response to Rethinking Education at

http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/educ/135467.pdf.


“[a]cting on instructions, our Deputy Permanent Representative stressed our view that, in the context of the Article 148 procedure, CSRs related to education should be agreed only where they relate to an identifiable labour market issue that impacts on employment growth. She also made the more general point that CSRs in this area should be discussed and agreed with Member States in advance, in recognition of the particular nature of education co-operation in the EU and the primacy of the role of Member States. It is important to recall that the UK is not subject to sanctions or binding mechanisms as part of the CSR process or at any other stage of the European Semester, and that the Commission’s Communications on forthcoming economic governance arrangements are aimed primarily at the euro area. We also aim, of course, to minimise the bureaucratic costs associated with the management of the CSR process.”

11.6 The Minister says that the Conclusions note the Commission’s intention to analyse the efficiency of public spending on education and training and to initiate a debate on the benefits of investment in different education and training sectors. He adds:

“Our Representative intervened again on this point, making clear that this sort of spending analysis should be very much a matter for Member States. Notwithstanding that, we have asked the Commission to provide more information on its plans.”

11.7 The Minister explains that the proposed new European benchmark on language competences stems from the Conclusions of the Barcelona European Council in 2002 which urged Member States to improve language learning. Discussions on the benchmark are at an early stage and the Conclusions endorsed by the Education Council simply note the Commission’s intention to carry out further methodological work on data collection. He continues:

“Although I would not welcome a new EU-wide benchmark in this area, I recognise that the idea may command the support of a majority of Member States, given the priority attached to languages learning within EU education cooperation. I believe that the crucial issue here is that we would not be required to report on such a benchmark, and that it would be a benchmark — i.e., some sort of average reference point against which countries could compare themselves — and not a target.

“In terms of our own policymaking, there could even be some advantages to publicising comparative information of this sort, even though it is clearly very unlikely that the UK would be able to reach the suggested level. We have participated, for example, in the European Survey of Language Competences, which shines a useful spotlight on our poor performance relative to several other EU countries. That said, I am well aware that there is a track record in the EU education domain of attempts by the Commission to turn benchmarks into more prescriptive targets (two of the existing Europe 2020 targets started off this way). I can assure the Committee that we will oppose any such development.”

11.8 Finally, the Minister notes that the Communication on Rethinking Education contains various other proposals for EU activity in the education field, including new initiatives on apprenticeships, open learning and entrepreneurship. He adds:


“I am far from convinced that these ideas represent real added value, particularly at a time when we are trying to bear down on administrative costs in the EU. For this reason, we also secured some new wording in the Council Conclusions requiring a detailed cost/benefit analysis to be included in the Commission’s plans. I hope to enlist the support of other Member States in ensuring that this is followed up, enabling Education Ministers to exercise better control over what is, I fear, an expansionist Commission agenda.”

Conclusion

11.9 We note the Minister’s concerns regarding the potential for “competence creep” as the EU expands its activities within the field of education, as well as his reservations about the use of country-specific reservations to address Member States’ education and training policies, and draw his reply to the attention of the Education Committee. We would welcome a further update from the Minister on the development of the benchmark on language competences and on how the Commission proposes to conduct its analysis of the efficiency of public investment in education and training once more information becomes available. Meanwhile, we are content to clear the Communication from scrutiny.

12 International protection for audiovisual performances

(34765) 7489/13 + ADD 1 COM(13) 109

Draft Council Decision on the signing, on behalf of the European Union, of the WIPO Treaty on Audiovisual Performances

Legal base Date originated Date deposited in Parliament

Articles 114 and 218(5) TFEU;QMV 4 March 2013 15 March 2013

Department Business, Innovation and Skills Basis of consideration EM of 28 March 2013 and Minister’s letter of 10 April

2013 Previous Committee Report None Discussion in Council Not known Committee’s assessment Legally important Committee’s decision Cleared


Background

12.1 The WIPO (World Intellectual Property Organisation) Treaty on audiovisual performances (the AVP Treaty) seeks to complement the 1996 WIPO Performances and Phonograms Treaty (WPP Treaty or WPPT)37 in providing the same level of international intellectual property protection to performers for audiovisual performances as currently provided by WPP Treaty for sound performances.

12.2 Negotiations on the AVP Treaty at an international level started in the 1990s, with negotiations on behalf of the EU being conducted from 2000 onwards by the Commission by way of negotiating mandates authorised by the Council. It took until June 2012, after intensive negotiations, for agreement to be reached on the text of the new treaty by the Diplomatic Conference convened in Beijing by the General Assemblies of WIPO.

12.3 The AVP Treaty is now open for signing by the Member States of WIPO (including the UK) and by the EU. From the point of view of EU law, the Treaty constitutes a “mixed” or “shared” international agreement as some of the matters covered by the Treaty fall within the competence of the EU and others fall within the competence of Member States. Although nearly all of the issues covered by the Treaty are already harmonised at EU level, one issue in particular falls within the competence of Member States and has not been harmonised: moral rights.

12.4 The draft Council Decision authorising the Commission to sign the Treaty on behalf of the EU has been deposited, and is accompanied by an Explanatory Memorandum by the Parliamentary Under Secretary of State at the Department for Business, Innovation and Skills (The Viscount Younger of Leckie) of 28 March. Appended to the draft Decision is the text of the agreed Treaty (Addendum 1). Prior to this, helpfully, the Government had been keeping us informed of recent progress in the negotiations of the Treaty by way of letters dated 6 September 2011, 28 May and 25 September 2012.

The current document and the AVP Treaty

12.5 The AVP Treaty updates and clarifies the international legal framework in respect of audiovisual performers (for example, actors, dancers, singers and musicians) by establishing a new set of minimum standards for their protection and remuneration in respect of performances incorporated in an audiovisual fixation (for example, in a film, television programme or a DVD) and ensuring those new rights work within the digital environment. In particular, performers are protected against unauthorised use of their performances in audiovisual media.

12.6 In its explanatory memorandum to the current document, the Commission explains the EU’s involvement in the Treaty (beyond being permitted to sign the Treaty pursuant to its Article 23). The EU actively shaped the provisions of the AVP Treaty with the aim of ensuring that EU audiovisual performers enjoy at an international level the same level of protection, consistent with EU acquis that is already afforded by EU legislation. As a result, the majority of issues covered by the AVP Treaty are already harmonised at EU level.

37 http://www.wipo.int/treaties/en/ip/wppt/trtdocs_wo034.html


12.7 As already mentioned, the Treaty also provides actors and other performers (who, under Article 3, are nationals of or habitually resident in the Treaty signatories) with equivalent rights to the WPP Treaty rights already available to musicians and recording artists. As a result, the provisions of the AVP Treaty are similar to those of the WPP Treaty (which both the EU and the UK signed and ratified) and can be summarised as follows:

Article 4 — National Treatment

12.8 Signatory countries (referred to as Contracting Parties) are required to accord protection to audiovisual performers on a national treatment only basis as regards the rights specifically covered by the Treaty (exclusive rights and the right to equitable remuneration under Article 11), and not in respect of any additional rights granted in national law or where other Contracting Parties have made reservations in relation to the rights covered by the Treaty (see Articles 11 and 13).

Article 5 — Moral Rights

12.9 The Treaty requires performers to be granted moral rights as regards live performances or performances fixed in audiovisual fixations. These include the right to be identified as the performer and the right to object to any distortion, mutilation or other modification of the performance that would be prejudicial to the performer’s reputation. Moral rights are intended to protect the personality of the performer rather than his or her economic interests.

Articles 6, 7, 8, 9, 10 and 11 — Exclusive rights

12.10 The Treaty also grants performers exclusive rights with respect to their live performances and performances fixed in audiovisual fixations. It requires performers to have exclusive rights to authorise the:

• broadcasting and communication to the public of their live performances, and to authorise their recording (Article 6):

• direct or indirect reproduction of their performances fixed in audiovisual fixations (Article 7) (“fixed performances”, their distribution (Article 8) and the commercial rental to the public of the original and copies of the performances (even after authorising their distribution (Article 9),

• making available to the public of recordings of their fixed performances electronically (e.g. the on-line downloading of a film incorporating their performance) in such a way that members of the public may access them from a place and at a time individually chosen by them (Article 10); and

• broadcasting and communication to the public of their fixed performances (Article 11). Contracting Parties can replace the right provided by Article 11 by a right to equitable remuneration or may derogate from this right entirely.


Article 12 — Transfer of performers’ rights to producers

12.11 The provision relating to the transfer of performers’ rights to producers of audiovisual works (Article 12) does not impose any obligations on Contracting Parties. As the Commission explains in the explanatory memorandum:

“As regards the transfer or rights, Contracting Parties are given full flexibility to organise it. They may decide for instance that, once a performer has consented to the fixation of a performance, his exclusive rights are transferred to the producers, unless a contract between a performer and a producer states differently. In any event, the provision does not impose on Contracting Parties any obligation to provide for an automatic transfer.”

Article 13 — Limitations and exceptions

12.12 Contracting Parties may provide for the same kinds of limitations or exceptions in their national legislation as they provide in respect to the protection of copyright in literary and artistic works.

Article 14 — Duration of protection

12.13 The Treaty provides that the term of protection granted to performers shall last until at least 50 years after the fixation of the audiovisual performance.

Articles 15, 16, 20 — Remedies and enforcement

12.14 The Treaty requires that Contracting Parties ensure that appropriate remedies are provided against the circumvention of technological protection measures used by performers in connection with the exercise of their rights (Article 15) and against the removal or alteration of electronic rights management information attached to a performance fixed in an audiovisual fixation (Article 16). Contracting parties are also required to ensure that appropriate provisions are available in national laws for the effective enforcement of the rights covered by the Treaty (Article 20).


12.15 In the Explanatory Memorandum of 28 March, the Minister comments that the AVP Treaty represents “a significant step forward in the international protection of performers’ rights” in clarifying the international framework, strengthening of the economic and moral rights of audiovisual performers (bringing them in line with rights relating to sound performances) and providing for flexibility in terms of the transfer of rights from performers to producers.

12.16 He notes that the UK has “a significant interest in the audiovisual industry”, due to its worldwide exports of films and television programmes and welcomes the Treaty’s strengthening of the protection of UK audiovisual performers in overseas markets, particularly by extending that protection to “new technological methods of exploiting audiovisual performances”. Equally, the business certainty provided, for example through the preservation of the current “standard clause” arrangements for the transfer of rights in


the UK under the Treaty (which represents, in the Minister’s words “a good compromise” in allowing Contracting Parties to retain their current systems), would be welcomed by broadcasters and film-makers.

12.17 Additionally, the Minister tells us that informal Government consultation with key stakeholders (representatives of both producers and performers) on the Treaty from as early as 2000 with the emergence of the first basic proposals, then again in 2009 (when there was renewed interest in agreeing the Treaty) and as part of an 2012 Intellectual Property Office Open Meeting has revealed steady, positive industry support for the proposals. He notes that “should the UK ratify the Treaty, the dependent territories will be consulted as to whether they wish the Treaty to also apply to them”.

12.18 Finally, in terms of a future timetable for the signing and ratification of the Treaty, the Minister comments that although the Treaty is currently open for signing, no timetable has been agreed for the introduction of any legislative changes.

Legal implications for UK

12.19 The Minister states that although most of the rights provided in the Treaty are already granted by UK law, should the UK sign the Treaty some changes to UK law would be required prior to ratification, in particular concerning the moral rights protected by the Treaty (the right to be identified as the performer and the right to object to derogatory treatment). This is because these rights, not being economic rights, fall within national, as opposed to EU, competence.

12.20 The Copyright, Designs and Patents Act 1988 as amended (CDPA) provides for moral rights for performers in their live performances and in their sound performances — but not in respect of performances incorporated into audiovisual fixations. The Minister welcomes extending these existing rights because “providing audiovisual performers with similar rights to those currently enjoyed by performers in their sound performances is both logical and desirable and would ensure that the law is consistent in respect to performers’ rights”.

12.21 Apart from the issue of moral rights, the Minister notes that the CDPA does not currently provide performers with the exclusive right of authorising the broadcasting and communication to the public of their performances in audiovisual fixations as provided in Article 11(1) of the Treaty. However, he notes that:

“instead of these exclusive rights, the Treaty provides that contracting parties may establish a right to equitable remuneration for the direct or indirect use of performances fixed in audiovisual fixations for broadcasting or for communication to the public (Article 11(2)). Contracting parties may reserve partially or completely from the provisions in Article 11. The CDPA currently provides a right to equitable remuneration but only in relation to sound recordings.”

12.22 The Minister explains that the legislative procedure to implement any changes required in the UK is still to be determined by the Government. However, should the Treaty be designated a Community Treaty as defined in section 1(2) of the European


Communities Act 1972, measures could be implemented under section 2(2) of the Act by way of secondary legislation.

Minister’s Letter of 10 April 2013

12.23 Subsequently the Minister has written informing us that the Commission is intending to refer the current document to COREPER at the end of April, with a view to signing the AVP Treaty towards the end of May. The Treaty itself is open for signing until June. In view of these timings, he requested that we consider the current document at the earliest opportunity.

Conclusion

12.24 We recognise the potential benefits to the UK film and TV industry of the AVP Treaty in facilitating in future the worldwide export of fixed audiovisual performances. We note the Government’s support for this current proposal authorising the EU to sign the AVP Treaty and also its own intention to sign the Treaty on the UK’s behalf, and further note that such support is consistent with the approach taken to the previous and complementary Treaty on sound performances (WPPT), which both the EU and UK signed (and ratified).

12.25 The arrangements for the implementation of changes required to UK national law have yet to be finalised and we report the Minister’s comments to the House. However, we do not consider that there are any significant policy or financial implications for the UK flowing from the AVP Treaty.

12.26 Mindful of that and of the timings for the approval and signing of the Treaty, we clear the current document from scrutiny.

13 Transport security

(34032) 11037/12 SWD(12) 143

Commission Staff Working Document on transport security

Legal base — Department Transport Basis of consideration Transport Committee’s Opinion of 11 March 2013 Previous Committee Report HC 86–viii (2012–13), chapter 6 (11 July 2012) Discussion in Council None planned Committee’s assessment Politically important Committee’s decision Cleared


Background

13.1 There are EU legislative requirements in the aviation and maritime security sectors, where risks routinely cross borders.

13.2 The Commission’s March 2011 White Paper, “Roadmap to a Single European Transport Area — towards a competitive and resource efficient transport system”, announced its intention to establish a permanent advisory group on land transport security.38 A Commission Decision of 31 May (2012/286/EU) established this as the Advisory Group on Land Transport Security. This forum of government and industry policy makers and experts on land transport and security will meet at least twice a year.

13.3 In May 2012 the Commission published this Staff Working Document to consider what the focus of EU activity on transport security should be. The Commission did not bring forward any legislative proposals, but it did suggest areas for consideration, some of which could lead to recommendations for legislation at a later stage. The document was largely concerned with the land transport sector, which, with the exception of the movement of dangerous goods, is the least regulated mode of transport at the EU level and where the Commission feels that there is a need to do more to improve security.

13.4 Land transport security as considered by the Commission, covers, due to its broad and complex nature, not only public transport, but also supply chain movements across several modes including inland waterways. The Commission set out a number of matters on which work might be taken forward across the transport modes.

13.5 When, in July 2012, we considered this document we noted the Government’s reservations about the need for the sorts of EU activity on land transport security the Commission proposed and noted particularly its concerns, which we shared, about possible subsidiarity issues. However, before considering the matter further, we asked the Transport Committee, using our powers under Standing Order No. 143(11), for an Opinion on the document. We asked this as the possibility of legislation, which might be unnecessarily onerous for the land transport sector, was at a formative stage and we suggested that, in preparing this Opinion, the views of both the Government and industry as to what might be acceptable at EU level be sought. Meanwhile the document remained under scrutiny.39

The Transport Committee’s Opinion

13.6 Having taken written and oral evidence from a range of witnesses the Transport Committee has now published its Report Land transport security — scope for further EU involvement, which is the Opinion we requested.40 The Report sets out the existing arrangements for land transport security in the UK and then examines the reactions it

38 (32639) 8333/11: see HC 428–xxvi (2010–12), chapter 3 (11 May 2011) and Gen Co Debs, European Committee A, 4

July 2011, cols. 3–28.

39 See headnote.

40 Eleventh Report from the Transport Committee, 2012–13, Land transport security — scope for further EU involvement, HC 875.


received to the Commission’s document and comes to some important conclusions, particularly for the Government.41

13.7 In a paragraph addressed directly to us the Transport Committee says:

“Overall, the tone of both industry’s and the Government’s response to the Commission’s proposals can be summarised as a distinct lack of enthusiasm for further EU involvement in relation to land transport security. The majority of organisations that responded to our call for evidence called for better sharing of information and good practice across the EU, rather than use of the “blunt tool” of EU legislation. The issues raised in the Commission’s document are significant and deserve proper consideration in the House of Commons if, and when, more detailed proposals come forward. We do not consider that a debate in a European Committee would be appropriate at this stage because of the lack of detail in the proposals as they stand. However, given the industry’s strong disinclination towards EU legislation in this area, we recommend that the European Scrutiny Committee keep abreast of, and alert the House to, any further proposals as they arise from the Commission, with a view to recommending them for debate.42

Conclusion

13.8 We are grateful to the Transport Committee for its response to our request for an Opinion on the Commission’s Staff Working Document. In the light of the Opinion we now clear the document from scrutiny, but will, of course, be ready to consider recommending any legislative proposals on land transport security, that may emerge from the Commission, for debate.

41 Ibid, paras 35–36.

42 Ibid, para 34.


14 Croatia: monitoring the accession process

(34812) 7999/13 COM(13) 171

Commission Communication: “Monitoring Report on Croatia’s accession preparations”

Legal base — Document published 26 March 2013 Document deposited 5 April 2013 Department Foreign and Commonwealth Office Basis of consideration EM 9 April 2013 Previous Committee Report None; but see (34320)14854/12: HC 86–xxi (2012–

13), chapter 12 (28 November 2012) and HC 86–xvii (2012–13), chapter 1 (24 October 2012); also see (33848) 9170/12: HC 86–ii (2012–13), chapter 19 (16 May 2012); also see (33669) 6228/12: HC 86–ii (2012–13), chapter 21 (16 May 2012) and HC 428–lviii (2010–12), chapter 2 (25 April 2012); also see (33387) —: HC 428–xlvi (2010–12), chapter 16 (11 January 2012) and HC 428–xliii (2010–12), chapter 22 (7 December 2011)

Discussion in Council 22 April 2013 Foreign Affairs Council Committee’s assessment Politically important Committee’s decision Cleared

The Committee’s Report of 24 October 2012

14.1 The Committee reported on the previous Commission report on monitoring the pre-accession process for Croatia in October. We took the view that, logically, the House should not have been asked to ratify the accession treaty until this pre-accession monitoring process had been completed, and it had been demonstrated that Croatia was indeed fully prepared.

14.2 In the meantime, we would have recommended that that previous monitoring report be debated on the Floor of the House, in order to help with that final judgement. That option, however, had been taken out of our hands, since the Government had already begun the ratification process.

14.3 We therefore asked for our Report to be “tagged” to the Second Reading debate, so that it could provide relevant background.

14.4 We also drew it to the attention of the Foreign Affairs Committee.


14.5 Finally, we cleared the Commission Communication.43

The Minister’s letter of 16 November 2012

14.6 The Minister for Europe (Mr David Lidington), wrote in connection with the undertaking that he gave during the 6 November 2012 House of Commons debate on the EU (Croatian Accession and Irish Protocol) Bill, to respond formally to the points raised in the Committee’s Report.

14.7 He set out the Government’s position on what he acknowledged were important concerns relating to Croatia’s readiness to join the EU on 1 July 2013 — “confident that the Government and the Committee have a shared objective of ensuring that Croatia is ready in full before accession, that the pre-accession monitoring process is working to deliver this, and that the credibility of the enlargement process remains intact”.

14.8 The Minister’s response is set out in detail in our most recent Report. The main points were as follows.

Cooperation with the International Criminal Tribunal for the former Yugoslavia (ICTY), domestic war crimes and the issue of impunity

14.9 He agreed with the Committee that full cooperation with the ICTY had been, and remained, vital to Croatia’s accession. The Minister noted that the Chief Prosecutor, Serge Brammertz, had confirmed publicly that there were “no outstanding issues that might burden relations between Croatia and ICTY”. The failure to locate important missing military documents was unfortunate but did not prove that the Croatian authorities had been uncooperative. Looking ahead, he expected Croatia to continue to cooperate with the ICTY and to respect any further judgments.

14.10 The slow progress on processing domestic war crimes and the issue of impunity remained a key challenge for Croatia. But domestic war crimes were a separate issue from Croatia’s ICTY commitments, covered instead by Croatia’s obligations under the Accession Treaty and the European Commission’s pre-accession monitoring.

14.11 The Minister listed some of the progress noted in the Commission’s report and Monitoring Tables.44 However, the Minister agreed with the Committee that addressing impunity remained a major challenge; that the majority of war crimes were yet to be successfully prosecuted; and on the importance of ensuring that witness attendance was facilitated and protection provided.

Croatia’s ability to manage its borders and the threats posed to UK and EU security from organised crime networks

14.12 The Committee raised these concerns because Croatia will have the longest external border of any EU country upon accession. The Minister said Croatia did not present a high

43 See headnote: HC 86–xvii (2012–13), chapter 1 (24 October 2012).

44 See the Annex to our most recent Report for the text of a separate joint letter of 15 November 2012 from the Secretary of State for Justice and the Minister for Europe on these matters.


risk to the UK either as a source or transit country for illegal migration. Border controls between Croatia and neighbouring EU countries would continue until Croatia became a member of the Schengen area. The UK retained its border controls. Third country nationals would therefore continue to be subject to the same level of controls after accession; he therefore did not expect any increase in illegal immigration or asylum applications to the UK as a result of Croatia’s accession. Accession would ensure that the UK could work together with Croatia to tackle illegal migration.

Corruption

14.13 Croatia continued to tackle this issue and remained on track to meet its commitment in this area. Croatia has taken several high profile steps in tackling corruption. The focus was now on the amendment and immediate and efficient implementation of the Police Act, to ensure transparency of recruitment procedures, professionalism and depoliticisation. The Conflict of Interest Commission should be established before the end of 2012.

Comparisons with Romania and Bulgaria

14.14 Croatia had faced the toughest accession negotiations to date, and had gone through a much more demanding process than that demanded of Romania and Bulgaria or earlier accession States. If issues of concern were identified, then the Council, acting by qualified majority on a proposal from the Commission, could take “all appropriate measures”. On the basis of their track record, the Government took the view that Croatia would be ready in full to join by 1 July 2013. In response to the Commission’s October report, the Croatian government had produced a new Action Plan, detailing the steps that Croatia planned to take to meet the Commission’s recommendations. However, as this was not a public document, the Minister could not place a copy in the Parliamentary Libraries.

Our assessment

14.15 We reproduced the Ministers’ letters verbatim, since we judged it important for the House to be aware of their contents, now that the ratification process was under way.

14.16 On the question of ICTY cooperation, given the recent acquittal of Messrs Gotovina and Markac, the question was now somewhat academic; it would never be known if the missing artillery documents would have been material to the issue upon which the acquittal turned (failure to prove a criminal conspiracy). However, we remained unconvinced that, as defined by the Minister — committed and sustained activity demonstrating one hundred per cent effort and political will — full cooperation had ever been truly forthcoming.

14.17 The Minister was not just sanguine about the border issue, but also confident that all would be well on the day, and thereafter, despite all the work that remained to be done between last autumn and this July on this and other key issues — plus, presumably, that which he did not mention revolving around public procurement and local government, and a demonstrable ability to handle EU funds without prior scrutiny.


14.18 In so doing, he placed a high premium on the conviction of a previous prime minister and the determination of a reform-minded Minister: but such convictions elsewhere in the EU’s Neighbourhood had taken place without being seen as in any way reassuring; and the endeavours of reform-minded Ministers elsewhere had, despite an equal measure of governmental determination and backing at the time, foundered in the face of a political class who did not fully share those “European values” — the lack of which being the main reason why Bulgaria and Romania remained subject to (ineffective) post-accession monitoring.

14.19 The Minister made much of Croatia’s accession process having been much more demanding: but it would have been a dereliction of duty by the Member States had it not been. Even now, that this re-vamped process was to be changed again so that future candidates “address the important rule of law chapters, Chapters 23 and 24, earlier in the process, ensuring that reforms can be enacted early and a consistent track record developed”, illustrated the extent to which this point had yet to be reached in the case of Croatia. This made it all the more disturbing that the Government chose to foreclose on the possibility of further evidence-based consideration by bringing the ratification process to a head last November. Since the Action Plan that the Minister enclosed with his letter was a private document, the House could not even see what it was that the Croatian government had set itself to do between then and this Spring’s final monitoring Commission report.

14.20 Though we indeed shared the Government’s objective of ensuring that “Croatia is ready in full before accession, that the pre-accession monitoring process is working to deliver this, and that the credibility of the enlargement process remains intact”, we continued not to share the Minister’s sense of ease about either the process thus far or prospects over the remaining seven months before Croatia’s accession.45

The Commission Monitoring Report

14.21 The Commission published its final monitoring report on Croatia’s accession preparations on 26 March. It provides an assessment of Croatia’s progress during the period 1 September 2012 to 28 February 2013 and its readiness for membership. It follows the October 2012 Comprehensive Monitoring Report.

14.22 The latest report focuses in particular on the chapters covering Competition Policy (Chapter 8), Judiciary and Fundamental Rights (Chapter 23), and Justice, Freedom and Security (Chapter 24) and provides an assessment of delivery against the ten priority areas that the Commission identified in the October Comprehensive Monitoring Report as requiring the most attention in order to ensure that Croatia was ready in full.

14.23 In his Explanatory Memorandum of 9 April 2013, the Minister for Europe (Mr David Lidington) notes that, overall, the report concludes that Croatia is “generally meeting” its commitments and requirements in all chapters and has completed the ten priority actions listed in the October 2012 Comprehensive Monitoring Report (with one caveat: construction of border crossing points at the Neum corridor “is expected to be

45 See headnote: see (34320)14854/12: HC 86–xxi (2012–13), chapter 12 (28 November 2012).


completed imminently”). Clear work plans that set out the actions necessary to address final outstanding areas, and the fact that actions in some areas are about to be finalised, has given the Commission confidence that Croatia will be able to fulfil all of its commitments in time for accession. The Commission notes that Croatia’s accession follows ten years of rigorous accession preparations following its application for membership in 2003 (the negotiations themselves lasted six years) and that Croatia is expected to continue developing its track record in the field of the rule of law after it joins the EU. The Commission calls on Croatia to ensure that it uses the many opportunities afforded by EU membership to the fullest extent, so as to ensure that Croatia’s accession is a success, for Croatia, the EU and for the Western Balkans region.

14.24 The Minister then summarises the Commission’s findings in helpful detail. The main points are:

— Chapter 8 (Competition Policy): the Commission expect Croatia to meet fully the key action of completing the restructuring and privatisation of its shipbuilding industry in time for accession. The Commission notes that Croatia has also met the other remaining commitments and requirements in the fields of anti-trust, mergers and State aid on which legislation has been aligned to the acquis and has developed a satisfactory enforcement record based on achieving a sufficient level of administrative capacity to meet its obligations and commitments.

— Chapter 23 (Judiciary and Fundamental Rights): Croatia is generally meeting the requirements of this chapter and has continued to demonstrate progress against the ten specific commitments under this chapter. Croatia has completed the priority actions that were assigned in the October 2012 monitoring report, although work to ensure these actions are fully embedded and effective will need to continue up to and beyond accession. Further work is still required, particularly to ensure the effective implementation of the recent reforms: this is recognised as an ongoing process that will continue beyond accession, as demonstrated, for example, by the Judicial Reform Strategy and the strategy for the development of the judiciary which will run until 2015 and 2018 respectively.

— Court backlogs: the report notes that Croatia resolved more cases overall in 2012 than were incoming. While the backlog remains above the EU average, a number of efforts have been made to tackle the issue in a sustainable manner. However, a single comprehensive system for case handling remains essential. Overall, the Commission assesses that the measures adopted will contribute to increased efficiency if implemented properly.

— Domestic war crimes: continued progress is noted. However, further efforts are still required to tackle impunity, as is further enhancement of the administrative capacity of the specialised courts.

— Organised crime and corruption: the Commission notes that the legal and institutional framework is adequate, law enforcement bodies remain proactive (with evidence of both high- and low-level corruption cases) and that a track record in implementation continues to be developed, with the introduction of the new Criminal Code on 1 January 2013 resulting in a higher number of penalties for offences.


However, the report notes that the overall level of sentences and of confiscated assets remains low and Croatia needs to ensure effective sentencing and implementation of the legal framework to be able to develop a sustained track record in these areas and to avoid creating a climate of impunity. In addition, further improvements are needed in tackling low-level corruption, particularly in public procurement. While the legislative framework for preventing conflict of interest has been strengthened and the Conflict of Interest Commission has become operational, Croatia now needs to increase its efforts to develop a track record of substantial results in this area: specific attention is required to ensure strong mechanisms for preventing, detecting and sanctioning conflict of interest cases — in particular, to address the Constitutional Court’s November 2012 annulment of several provisions of the Conflict of Interest Act which weaken its verification and sanctioning powers. In public procurement, new legislation is increasing transparency though solid management and control systems need further attention as does the need to ensure that strong mechanisms are in place to prevent corruption in state-owned companies; ensure merit-based promotion in the civil service; and protect whistle-blowers.

— Protection of minorities: a more proactive government approach has led to attainment of the minorities target for recruiting 400 border police. A new Act on Misdemeanours against Public Order and Peace will include violations based on discriminatory grounds; training of police officers on hate crimes has been stepped up; and draft amendments to the Free Legal Aid Act have been prepared and consulted on (with adoption planned during 2013). Croatia has continued to engage on the Sarajevo Declaration Process to ensure an end to the issue of refugee returns; the remaining unsolicited investment cases are expected to be solved in 2013; but although the implementation of Housing Care programmes continues, it does so at a slow pace, as does the implementation of the new purchase options for housing care beneficiaries.

— Human rights continue to be well-respected with an active role by the Ombudsman though continued attention is necessary to ensure the Ombudsman’s recommendations are followed up and that the Ombudsman’s financing is strengthened.

— ICTY cooperation: the report notes that Croatia’s cooperation with the ICTY has continued and that, following the acquittal of the Croatian Generals Markać and Gotovina, the State Attorney’s Office has requested the ICTY’s documentation to help efforts in prosecuting perpetrators of domestic war crimes during Operation Storm.46

46 According to a Human Rights Watch publication of 1 August 1996:

“On August 4, 1995, the Croatian Army launched “Operation Storm”, an offensive to retake the Krajina region, which had been controlled by separatist ethnic Serbs since early 1991. The offensive, which lasted a mere 36 hours, resulted in the death of an estimated 526 Serbs, 116 of whom were reportedly civilians, and in the displacement of an estimated 200,000 who fled in the immediate aftermath. However, while the Croatian military committed violations of humanitarian law during the course of the offensive such as the bombardment of a column of retreating Serbian civilians and soldiers which caused deaths among the civilians, the vast majority of the abuses committed by Croatian forces occurred after the area had been captured. These abuses by Croatian government forces, which continued on a large scale even months after the area had been secured by Croatian authorities, included summary executions of elderly and infirm Serbs who remained behind and the wholesale burning and destruction of Serbian villages and property. In the months following the August offensive, at least 150 Serb civilians were summarily executed and another 110 persons forcibly disappeared.”

See http://www.unhcr.org/refworld/country,,HRW,COUNTRYREP,HRV,,3ae6a7d70,0.html.


— Chapter 24 (Freedom, Security and Justice): Croatia’s preparations in the fields of migration, asylum, visa policy, external borders, judicial cooperation and the fight against organised crime are almost complete. There is positive evidence of continued reform in each area, including increased temporary solutions for accommodating asylum seekers, specialised training for border police, cooperation with Serbia, Montenegro and Bosnia and Herzegovina on border issues, further alignment of visa requirements legislation and continued alignment with the Schengen acquis. The report also delivers some clear recommendations in the fields of asylum and EU external border management.

— Migration: Croatia has completed a priority action arising from the last report by adopting its migration strategy in February 2013. Detections of illegal migrants have increased. A temporary solution has been found to house any overflow of migrants in the short term and funding secured for a permanent solution. There has also been an increase in asylum applications; the asylum and appeals system is in place with protection granted to 16 applicants between 1 September 2012 and 9 January 2013; 63 applications were rejected and in 300 proceedings were suspended in the same period.

— EU external border: preparations are almost complete. Croatia has now met recruitment target for border police for 2012 and continues to recruit. The National Border Management Information System (NBMIS) at the border crossing points (BCPs) located at the future external border were operational at 76 BCPs as at January 2013; 17 more BCPs therefore require implementation of the computer system to deliver on Croatia’s Integrated Border Management (IBM) programme. BCPs in the Neum corridor remain the priority and construction work has intensified to ensure crossing points are fully operational by the time of accession. In the fight against corruption in border management, 2,681 unannounced inspections were conducted in the period from 1 September 2012 to 31 January 2013.

— Police: adoption of related by-laws has been completed to ensure the implementation of the Police Law from 1 January 2013.

— Human trafficking: further efforts remain necessary, including the need to raise awareness and intensify outreach, as well as to ensure the level of sentencing for cases is appropriate to act as a deterrent. Criminal assets continued to be seized but not in sufficient amounts to disrupt organised crime. The legal provisions on seizure and confiscation of assets need to be implemented more consistently and forcefully to address the low number of asset seizures and money laundering prosecutions.

— Other negotiating chapters: In a limited number of chapters, further efforts are still required to ensure full compliance by 1 July 2013; in some areas, for example, fisheries and regional policy and the coordination of structural instruments, the Commission recommends that efforts need to be stepped up. The priority action of completing the translation of the acquis is now on track to be completed before accession.


14.25 The Minister welcomes the Commission’s report and comments as follows:


“Robust monitoring of Croatia’s progress has provided Croatia with the impetus to maintain the momentum of their reform agenda, ensuring continued progress against their commitments as required of them following the closure of accession negotiations in 2011, building on the significant amount of work that has already been completed throughout the accession negotiations.

“However, there remain a number of recommendations throughout the report calling on Croatia to continue to implement and in some cases to step up efforts in areas where, despite meeting (or being expected to meet) their commitments for accession, effective implementation of reforms require further work. While we agree with the Commission that in general Croatia is likely to be ready in full before accession it remains important that Croatia uses the report’s recommendations to ensure continued targeted progress in all areas.

“While many actions form part of existing action plans and therefore can be expected to be completed on time if Croatia sustains its current level of progress, there remains an imperative for Croatia further to step up its proactive and vigorous approach to issues such as corruption and tackling organised crime, in particular to address the Commission’s concerns on human trafficking. Big challenges remain: ensuring judicial efficiency across the board, reducing the backlog of cases, and tackling impunity and the backlog of cases in handling domestic war crimes. All will require a sustained effort post-accession, where implementation and enforcement are key, not just meeting the requirements for legislative alignment. It is therefore welcome that Croatia already has in place plans in key areas for taking forward these reforms, for example the Judicial Reform Strategy (2011–15) and the forthcoming National Strategy for Roma Inclusion for 2013–20.

“There remain some limited areas within these action plans that need strengthening, as set out in the Commission’s report. As Croatian Ministers frequently state, these reforms are in Croatia’s interests: if Croatia does not continue the reform progress the already tough job of making a success of EU membership will become even harder. Without the required improvement in economic competiveness inward investment will not be forthcoming, it will be harder for Croatia to compete in the Single Market, and there will be significant impact on Croatia’s ability to use post-Accession EU funds effectively. Similarly, tackling war crimes will enable Croatia to put the legacy of the past behind them and to focus on their future as an EU member state where they are keen to play an increasing role on the international stage, using their experience of EU accession in the region to help their neighbours, and further afield their experience of conflict resolution in conflict zones.

“The UK as a strong supporter of Croatia will continue through our bilateral relationship, including both high-level dialogue and bilateral programme assistance work, to encourage Croatia to complete the necessary reforms before accession, and to continue its efforts beyond accession. We remain actively engaged: in 2012–13 Financial Year our bilateral programme allocated a total of £365,000, with the majority of that support targeted towards rule of law assistance projects. This is reflected in our continued support for EU Twinning (expert-to-expert) projects, where the Ministry of Justice has just commenced its latest project in Croatia with


assistance targeted at helping to strengthen the efficiency of the judiciary. We look forward to welcoming Croatia to the EU and to working together to encourage all the countries of the Western Balkans to meet the strict but fair conditions for EU membership.”

14.26 The Minister expects the report to be discussed at the 22 April 2013 Foreign Affairs Council and for brief Conclusions to be adopted.

Conclusion

14.27 For both the Committee and its predecessors, the focus has always been on maintaining the integrity of the enlargement process and avoiding the ongoing negative consequences of allowing the accession of Bulgaria and Romania before they were able to demonstrate full and comprehensive, practical commitment to the EU’s core values — particularly those embraced by “good governance”.

14.28 We therefore find it less reassuring than either the Commission or the Government that, as the Minister puts it, it remains “an imperative for Croatia further to step up its proactive and vigorous approach to issues such as corruption and tackling organised crime, in particular to address the Commission’s concerns on human trafficking.” Or that, at this very late stage, ensuring judicial efficiency across the board, reducing the backlog of cases, and tackling impunity and the backlog of cases in handling domestic war crimes are still described as “big challenges”. We have long argued that implementation and enforcement are key, not just meeting the requirements for legislative alignment; and that the five unsuccessful years of post-accession monitoring and support in Bulgaria and Romania have demonstrated that this must be carried out prior to accession. Instead, though likewise stressing the importance of implementation and enforcement over legislative alignment, the Minister notes that a sustained post-accession effort is still required, stretching as far ahead as 2020. No doubt Croatian Ministers frequently state that these reforms are in Croatia’s interests: so, no doubt, have several of their counterparts in Bulgaria and Romania over the years. We can but hope that the Commission’s and the Government’s faith in Croatia’s ability to hold to the right course after accession bears fruit. Time alone will tell.

14.29 However, in the first instance we would like the Minister to explain in greater detail — in an evidence session prior to Croatia’s accession — why the Government believes it right for accession to have proceeded despite there being so many continuing challenges and why it believes post-accession monitoring is likely to be effective when it has failed hitherto .

14.30 In the meantime, we now clear the document.


15 Customs Union

(33574) 18932/11 COM(11) 922

Commission Report: Report on progress on the strategy for the evolution of Customs Union

Legal base — Department Revenue and Customs Basis of consideration Minister’s letter of 8 April 2013 Previous Committee Reports HC 428–lii (2010–12), chapter 10 (29 February 2012

and HC 86–xxxv (2012–13), chapter 11 (13 March 2013)

Discussion in Council 10–11 December 2012 Committee’s assessment Politically important Committee’s decision Cleared

Background

15.1 A current EU customs reform programme has three elements:

• modernising EU customs legislation — the Modernised Customs Code;47

• the basis for a paperless customs environment — the e-Customs Decision;48 and

• a strategy for evolution of the Customs Union.

15.2 The latter originated from the review of the role and work of EU customs carried out by the Commission and Member States which was adopted by the directors general of customs of the 27 Member States in 2007. This provided the basis for the subsequent 2008 Commission Communication: Strategy for the evolution of the Customs Union,49 which was endorsed by the ECOFIN Council and the European Parliament in May and June 2008 respectively, the former asking the Commission for a progress report during 2011. The Commission subsequently undertook a number of studies to evaluate the efficiency and effectiveness of the Customs Union, which included gathering data from a variety of sources, including Member States and the trade.

15.3 In December 2011 with this Report the Commission responded to the Council’s May 2008 request for a progress report. It set out the Commission’s view of progress on the strategy for the evolution of the Customs Union, provided the background to the strategy, highlighted developments since 2008, reported on key areas and concluded with ideas on the way forward.

47 (27107) 15380/05 + ADDS 1–2: see HC 34–xvii (2005–06), chapter 5 (1 February 2006), HC 34–xxxi (2005–06), chapter 7

(14 June 2006), HC 41–x (2006–07) chapter 6 (21 February 2007) and HC 41–xxv (2006–07) chapter 14 (13 June 2007).

48 (27108) 15381/05 + ADDs 1–2: see HC 34–xvii (2005–06), chapter 5 (1 February 2006), HC 34–xxxi (2005–06), chapter 7 (14 June 2006), HC 41–x (2006–07) chapter 6 (21 February 2007) and HC 41–xv (2006–07), chapter 8 (21 March 2007).

49 (29590) 8027/08: see HC 16–xx (2007–08), chapter 15 (30 April 2008).


15.4 In February 2012, when we considered the Report, we noted, although the document was not a legislative proposal, the Government’s concerns about competence creep and implications for some existing or future legislative proposals. We said that we would, therefore, not consider this document further until we had an account from the Government about progress with its attempts to mitigate the problems in proposed Council Conclusions. When we next considered the document, this March, we heard that Conclusions had been endorsed at the Competitiveness Council in December 2012. We said that it was deeply regrettable that we had heard nothing from the Government about development of Council Conclusions since our Report on the matter in February 2012 and had heard about their adoption only after the event. We asked to have very quickly a full explanation of the reasons for this failure. Additionally, we asked to have an account of how the Conclusions met the Government’s objective of mitigating the problems in the draft text, that is, in relation to concerns on competence and scope and the possibility of pre-emption of decisions yet to be taken on related matters such as FISCUS and the Eastern Border Action Plan. Meanwhile, the document remained under scrutiny.50


15.5 The Economic Secretary to the Treasury (Sajid Javid) opens his response by saying:

“Firstly I would like to apologise for not having kept you fully informed of the progress of discussions on the Council Conclusions in this case. This was a regrettable administrative oversight in failing to bring forward this file to ensure that your Committee was updated in a timely manner as part of the scrutiny process.”

15.6 The Minister then reminds us of the discussions on this document between February and December 2012 and tells us in what ways the initial draft Council Conclusions were not acceptable to the Government:

• inclusion of references to FISCUS (a proposal since withdrawn and replaced with the Customs 2020 and Fiscalis 2020 proposals — the EU customs and tax administrative cooperation programmes) and the Eastern Border Action Plan which pre-empted the outcome of Council negotiations; and

• failure to clarify that the Commission’s Report should only focus on the Customs Union and matters of exclusive EU competence.

15.7 The Minister continues that:

• the Government proposed a number of amendments to the Council Conclusions to address its concerns;

• it was successful in removing the references to FISCUS and the Eastern Border Action Plan;

• its suggested new wording to clarify the need to respect the division of competence between the EU and Member States on cooperation with other agencies and

50 See headnote.


international partners in areas of security, health and safety and the environment was also accepted; and

• on the basis of these amendments the Council Conclusions met the Government’s objectives and were adopted unanimously in December 2012.

Conclusion

15.8 We note the Minister’s comment about his scrutiny failure and trust that such failures will be avoided for the future.

15.9 We are grateful for the information about the satisfactory outcome on the Council Conclusions and now clear the document.


16 Banking Union

(a) (34217) 13682/12 COM(12) 512 (b) (34218) 13683/12 COM(12) 511 (c) (34558) 17787/12 —

Draft Regulation amending Regulation (EC) No 1093/2010 establishing a European Supervisory Authority (European Banking Authority) as regards its interaction with Council Regulation (EU) No. .../... conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions Draft Regulation conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions European Central Bank Opinion on a Draft Council Regulation conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions and a draft Regulation amending Regulation (EC) No 1093/2010 establishing a European Supervisory Authority (European Banking Authority) (CON/2012/96)

Legal base (a) Article 114 TFEU; co-decision; QMV

(b) Article 127(6) TFEU; consultation; unanimity (c) —

Department HM Treasury Basis of consideration Minister’s letter of 6 February 2013 Previous Committee Reports (a) and (b) HC 86–xxix (2012–13), chapter 17 (23

January 2013); HC 86–xiv (2012–13), chapter 1 (17 October 2012) (c) HC 86–xxix (2012–13), chapter 17 (23 January 2013)

Discussion in Council Not applicable Committee’s assessment Politically important Committee’s decision (a) and (b) Cleared after debate on the Floor of the

House51 (c) Cleared (decision reported on 23 January 2013)

Background

16.1 In recent years various measures have been discussed, and some introduced, to strengthen economic governance in the eurozone and in the wider EU. Much of this activity has been concerned with countering the present eurozone difficulties. Measures

51 HC Debs, 6 November 2012, cols. 805–833.


advocated have included a “banking union”. In this context in September 2012 the Commission proposed the first stage of a Banking Union, involving two draft Regulations. One, document (b), would confer specific tasks on the European Central Bank (ECB) concerning policies relating to the prudential supervision of credit institutions — a Single Supervisory Mechanism (SSM). The other, document (a), would amend consequentially the Regulation establishing the European Banking Authority (EBA). These documents were cleared from scrutiny following debate on the Floor of the House in November 2012.52

16.2 Before the debate took place it came to light that the Council Legal Service had concerns about the legality of elements of the proposal, some of which were raised in the debate. The concerns centred on the following issues:

i) In establishing the SSM, the Council had to respect the legal framework for decision-making within the ECB set by primary law, the Treaties. This framework did not allow the ECB’s Governing Council to delegate decision-making functions on banking supervision to a subsidiary body, such as the SSM. There was nothing in the legal base of the SSM proposal, Article 127(6) TFEU, which would permit secondary law, this draft Regulation, amending the rules laid down in primary law.

ii) Non-eurozone Member States were not entitled to participate in the ECB’s decision-making, so they could have no formal decision-making role in the SSM as conceived. A suggested compromise was to take the decision-making powers away from the SSM so that all participating Member States could be represented within it.

iii) In terms of the ECB’s dispute resolution powers, there was no justification in treating the ECB differently from banking authorities in non-eurozone Member States by exempting it from those powers. To do so would be a clear breach of the principle of non-discrimination.


16.3 The Financial Secretary to the Treasury (Greg Clark) writes in response to the Committee’s Report of 23 January in which it asked him to address how the concerns of the Council Legal Service had been met.

16.4 The Minister confirms that the arrangements are now “legally sound”:

“First, for completeness, I can confirm that Article 127(6) of the Treaty on the Functioning of the European Union (TFEU) is the correct legal base for the proposed ECB Regulation, as it expressly contemplates the conferral of specific tasks on the ECB concerning policies relating to the prudential supervision of credit institutions. The proposed EBA Amending Regulation has Article 114 TFEU as its Treaty base, which is appropriate given that the original EBA Regulation was also brought forward under Article 114 TFEU.

52 Ibid.


“Second, the Council approach is consistent with ECB governance provisions in the Treaties and the Statute of the European System of Central Banks and of the European Central Bank (ESCB Statute). The TFEU and ESCB Statute establish that the ECB’s Governing Council can only include Euro Area Member States and must have ultimate decision-making responsibilities for the performance of the ECB’s tasks, including financial supervision. Under Article 19 of the proposed ECB Regulation, the ECB will be required to establish a Supervisory Board responsible for the planning and execution of the ECB’s supervisory tasks and non-Euro Area Member States will be fully represented on the Board. However, the ECB’s Governing Council will be the ultimate decision-making body.

“Third, the ECB will be required to apply Union law, including binding technical standards and Directives transposed into the national laws of individual participating Member States.

“Finally, the tasks and powers of the European Banking Authority will apply in the same way to the ECB in its capacity as a supervisory authority as they apply to national competent authorities. For example, should the ECB be party to binding mediation by the EBA under Article 19 of the EBA Regulation, decisions of the EBA will be binding on the ECB. This arrangement secures equality in the treatment of the ECB and other competent authorities.”

Conclusion

16.5 On document (a) we note the powers of the EBA will apply to national competent authorities and the ECB alike so removing the discrimination in the earlier draft.

16.6 On document (b) we note how the proposals have been modified to meet the concerns which the Council’s Legal Service had raised. In short, the creation of a Supervisory Board means that all Member States will be represented within it and leaves the role of the ECB’s Governing Council formally unchanged by secondary legislation. In our view, however, there is nonetheless the risk that the new Supervisory Board could in practice become the de facto decision-maker on supervisory matters — circumventing the need for EU Treaty change to authorise another ECB decision-making body besides the Governing Council.

16.7 We thank the Minister for his letter and are now content to draw a line under this correspondence.


17 Cooperation with the Russian Federation on the trade in drug precursors

(a) (34642) 5654/13 COM(13) 4 (b) (34643) 5656/13 COM(13) 3

Draft Council Decision on the conclusion of the Agreement between the European Union and the Russian Federation on drug precursors Draft Council Decision on the signing, on behalf of the European Union, of the Agreement between the European Union and the Russian Federation on drug precursors

Legal base (a) Articles 207(4) and 218(6)(a) TFEU; QMV; EP

consent (b) Articles 207(4) and 218(5) TFEU; QMV

Department Home Office Basis of consideration Minister’s letter of 11 April 2013 Previous Committee Report HC 86–xxxii (2012–13), chapter 5 (13 February 2013)Discussion in Council No date set Committee’s assessment Legally important Committee’s decision Cleared


17.1 The United Nations Convention against the Illicit Traffic in Narcotic Drugs and Psychotropic Substances, agreed in 1988, establishes a framework for international cooperation to prevent certain chemical substances, commonly used in a variety of industrial processes to manufacture pharmaceuticals and household goods, being “diverted” into illicit drug production. These substances are often referred to as “drug precursors”. The Convention requires Contracting Parties (which include the EU and all Member States as well as Russia) to implement a series of measures to control the manufacture and distribution of drug precursors, monitor international trade, report suspicious orders and transactions, and ensure appropriate labelling and documentation.

17.2 The purpose of the draft Council Decisions is to authorise the signature and conclusion of an Agreement between the EU and the Russian Federation to strengthen cooperation in preventing the diversion of drug precursors into illicit drug production. Both draft Decisions cite Article 207(4) of the Treaty on the Functioning of the European Union (TFEU) as their legal base — a provision empowering the Council to conclude international agreements in areas covered by the EU’s common commercial policy. Our Thirty-second Report of 13 February 2013 summarises the content of the proposed Agreement and the Government’s position.

17.3 The Minister of State for Crime Prevention (Mr Jeremy Browne), told us that there was little direct trade in drug precursors between the UK and the Russian Federation and


so the provisions of the Agreement requiring Member States to exchange information would not entail extensive obligations for the UK. He indicated, however, that the Government intended to clarify with the Commission what personal data might be exchanged under the agreement and expressed a more general concern about the potential impact of the EU concluding agreements with third countries which involve an element of data or information exchange. He added that the Government was considering whether, notwithstanding the absence of a Title V legal base, the draft Decisions were subject to the UK’s Title V opt-in.

17.4 We questioned the basis on which the Minister considered that the UK’s Title V opt-in might apply in this case, since the Government had already accepted that changes proposed recently to a 2005 Regulation establishing harmonised internal rules on the trade in drug precursors between the EU and third countries do fall entirely within the scope of the EU’s common commercial policy and, as a result, are not subject to the UK’s opt-in.53 We asked him to identify those provisions of the Agreement which the Government believes impose obligations derived from Title V of Part Three of the TFEU (on Justice and Home Affairs matters) and to indicate which legal base or bases should be cited. We also asked the Minister to elaborate on the Government’s concerns regarding the data or information exchange provisions contained in the Agreement.

The Minister’s letter of 11 April 2013

17.5 The Minister informs us that the Government has concluded that the draft Council Decisions cite the correct legal bases and are not subject to the UK’s Title V opt-in for the following reasons:

“The scope of the Agreement between the Parties is to strengthen co-operation between them to prevent diversion from the legitimate trade in precursors, and Article 1(2) mentions, in particular, monitoring of trade and providing mutual assistance. There are no express references for law enforcement agencies to use information collected for law enforcement or other JHA purposes. If we were to say that the opt-in applied to the type of information exchange contemplated in this Agreement, on the basis that it could potentially be used for law enforcement purposes, the same could be said in respect of any information exchange which is generally subject to criminal law measures in the Member States.”

17.6 The Minister refers specifically to Article 3(1) of the Agreement, which requires Member States’ competent authorities to exchange information where there are reasonable grounds for believing that drugs precursors traded legitimately may be diverted into illicit drug production, and says,

“[...] it is far from established from the text of the provisions that the police would be caught within the types of competent authorities to which Article 3 relates. This provision concerns the competent authorities of the Parties (i.e. EU and the Russian Federation) and passing on information about trade monitoring, so it is not clear

53 See (34288) 14394/12: HC 86–xviii (2012–13), chapter 5 (31 October 2012) and HC 86–xx (2012–13), chapter 25 (21

November 2012).


why the police forces of individual Member States would be considered to be covered by this.”

17.7 The Minister also alludes to Article 4 of the Agreement which requires the Parties to provide mutual assistance through the exchange of information referred to in Article 12(1)(a) of the 1988 UN Convention concerning the exportation of drug precursors in order to prevent their diversion into illicit drug production. He continues:

“It is also relevant that data sharing in this Agreement is constrained by the EU’s level of participation in the 1988 UN Convention. Currently there is a strong argument that the reporting and monitoring obligations undertaken by the EU in respect of its obligations under the 1988 Convention are limited to Article 12 of the Convention: there is no suggestion that the monitoring and reporting extends to law enforcement purposes. This also points away from any binding legal content that may trigger the opt-in.”

17.8 The Minister adds that the Government’s broader concerns regarding the inclusion in the Agreement of provisions on the exchange of information have been allayed. The Commission has confirmed that the only time personal data might be exchanged is when the name or business address of a company trading in drug precursor chemicals is also that of a natural person. He says that the Irish Presidency will wish to establish a date for signature of the Agreement once the UK has lifted its scrutiny reserve.

Conclusion

17.9 We thank the Minister for his letter and note his conclusion that the draft Council Decisions fall within the scope of the EU’s common commercial policy and are not subject to the UK’s Title V opt-in. We are content to clear them from scrutiny.


18 Documents not raising questions of sufficient legal or political importance to warrant a substantive report to the House

Department for Business, Innovation and Skills

Anti-Dumping Measures

(34766) 6533/13 COM(13) 82

Draft Council Implementing Regulation imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain organic coated steel products originating in the People’s Republic of China.

(34767) 6555/13 COM(13) 84

Draft Council Implementing Regulation imposing a countervailing duty on imports of certain organic coated steel products originating in the People’s Republic of China.

(34786) 17727/12 COM(12) 745

Draft Council Implementing Regulation extending the definitive anti-dumping duty imposed by Council Implementing Regulation (EU) No 791/2011 on imports of certain open mesh fabrics of glass fibres originating in the People’s Republic of China to imports of certain open mesh fabrics of glass fibres consigned from Taiwan and Thailand, whether declared as originating in Taiwan and Thailand or not.

(34787) 17972/12 COM(12) 770

Draft Council Regulation imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain tube and pipe fittings of iron or steel originating in Russia and Turkey.

(34788) 5611/13 COM(13) 14

Draft Council Implementing Regulation imposing a definitive anti-dumping duty on imports of bioethanol originating in the United States of America.

(34796) 6758/13 COM(13) 94

Draft Council Implementing Regulation extending the definitive anti-dumping duty imposed by Council Regulation (EC) No 1458/2007 on imports of gas-fuelled, non-refillable pocket flint lighters originating in the People’s Republic of China to imports of gas-fuelled, non-refillable pocket flint lighters consigned from the Socialist Republic of Vietnam, whether declared as originating in the Socialist Republic of Vietnam or not.


(34818) 6409/13 COM(13) 72

Draft Council Implementing Regulation extending the definitive anti-dumping duty imposed by Council Implementing Regulation (EU) No 2/2012 on imports of certain stainless steel fasteners and parts thereof originating in the People’s Republic of China to imports of certain stainless steel fasteners consigned from the Philippines, whether declared as originating in the Philippines or not and terminating the investigation concerning possible circumvention of anti-dumping measures imposed by that regulation by imports of certain stainless steel fasteners and parts thereof consigned from Malaysia and Thailand, whether declared as originating in Malaysia and Thailand or not.

(34819) 6419/13 COM(13) 70

Draft Council Implementing Regulation imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain aluminium foils in rolls originating in the People’s Republic of China.

Other

(34752) 7172/13 —

European Parliament Resolution of 7 February 2013 — Governance of the Single Market with recommendations.

(34800) 7939/13 COM(13) 152

Draft Council Decision authorising member States to ratify, in the interests of the European union, the Convention concerning decent work for domestic workers, 2011, of the International Labour Organisation (Convention No 189).

Department of Energy and Climate Change

(34764) 7438/13 + ADD 1 COM(13) 121

Commission Communication on the use of financial resources earmarked for the decommissioning of nuclear installations, spent fuel and radioactive waste.

Department for Environment, Food and Rural Affairs

(34762) 7428/13 COM(13) 131

Draft Council Decision on the submission, of a proposal for the listing of additional chemicals in Annex A to the Stockholm Convention on Persistent Organic Pollutants.

(34763) 7429/13 COM(13) 134

Draft Council Decision on the position to be adopted, at the Sixth Conference of the Parties to the Stockholm Convention on Persistent Organic Pollutants with regard to the proposal for an amendment of Annexes A and B.


(34768) 7296/13 COM(13) 137

Draft Council Regulation amending Regulations (EU) No 44/2012, (EU) No 39/2013 and (EU) No 40/2013 as regards certain fishing opportunities.

HM Treasury

(34754) 7261/13 COM(13) 98

Commission Communication to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions Second Simplification Scoreboard for the MFF 2014–20.

(34759) 7289/13 COM(13) 119

Draft Council Decision on the mobilisation of the European Globalisation Adjustment Fund in accordance with Point 28 of the Interinstitutional Agreement of 17 May 2006 on budgetary discipline and sound financial management (application EGF/2011/010 AT/Austria Tabak from Austria).

(34760) 7291/13 COM(13) 119

Draft Council Decision on the mobilisation of the European Globalisation Adjustment Fund in accordance with Point 28 of the Interinstitutional Agreement of 17 May 2006 on budgetary discipline and sound financial management (application EGF/2011/016 IT/Agile from Italy).

(34801) — —

Transfers of appropriations — General Budget 2012: Fourth Quarterly Report.

Home Office

(34789) 7495/13 COM(13) 115

Commission Report on implementation of the Schengen Facility (2004–06).


Formal minutes

Wednesday 17 April 2013

Members present:

Mr William Cash, in the Chair

Mr James Clappison Michael Connarty Nia Griffith Chris Heaton-Harris Kelvin Hopkins

Chris KellyLinda Riordan Jacob Rees-Mogg Henry Smith

The Committee deliberated.

Draft Report, proposed by the Chair, brought up and read.

Ordered, That the draft Report be read a second time, paragraph by paragraph.

Paragraphs 1.1 to 1.12 read and agreed to.

Paragraph 1.13 read, amended and agreed to.

Paragraphs 2.1 to 2.8 read and agreed to.

Paragraphs 2.9 to 2.10 read, amended and agreed to.

Paragraphs 3.1 to 18 read and agreed to.

Resolved, That the Report be the Thirty-ninth Report of the Committee to the House.

Ordered, That the Chair make the Report to the House.

****

[Adjourned till Wednesday 24 April at 2.00 p.m.


Standing Order and membership

The European Scrutiny Committee is appointed under Standing Order No.143 to examine European Union

documents and—

a) to report its opinion on the legal and political importance of each such document and, where it considers

appropriate, to report also on the reasons for its opinion and on any matters of principle, policy or law which

may be affected;

b) to make recommendations for the further consideration of any such document pursuant to Standing Order

No. 119 (European Committees); and

c) to consider any issue arising upon any such document or group of documents, or related matters.

The expression “European Union document” covers —

i) any proposal under the Community Treaties for legislation by the Council or the Council acting jointly with

the European Parliament;

ii) any document which is published for submission to the European Council, the Council or the European

Central Bank;

iii) any proposal for a common strategy, a joint action or a common position under Title V of the Treaty on

European Union which is prepared for submission to the Council or to the European Council;

iv) any proposal for a common position, framework decision, decision or a convention under Title VI of the

Treaty on European Union which is prepared for submission to the Council;

v) any document (not falling within (ii), (iii) or (iv) above) which is published by one Union institution for or

with a view to submission to another Union institution and which does not relate exclusively to consideration

of any proposal for legislation;

vi) any other document relating to European Union matters deposited in the House by a Minister of the Crown.

The Committee’s powers are set out in Standing Order No. 143.

The scrutiny reserve resolution, passed by the House, provides that Ministers should not give agreement to EU

proposals which have not been cleared by the European Scrutiny Committee, or on which, when they have been

recommended by the Committee for debate, the House has not yet agreed a resolution. The scrutiny reserve

resolution is printed with the House’s Standing Orders, which are available at www.parliament.uk.

Current membership

Mr William Cash MP (Conservative, Stone) (Chair)

Mr James Clappison MP (Conservative, Hertsmere)

Michael Connarty MP (Labour, Linlithgow and East Falkirk)

Jim Dobbin MP (Labour/Co-op, Heywood and Middleton)

Julie Elliott MP (Labour, Sunderland Central)

Tim Farron MP (Liberal Democrat, Westmorland and Lonsdale)

Nia Griffith MP (Labour, Llanelli)

Chris Heaton-Harris MP (Conservative, Daventry)

Kelvin Hopkins MP (Labour, Luton North)

Chris Kelly MP (Conservative, Dudley South)

Penny Mordaunt MP (Conservative, Portsmouth North)

Stephen Phillips MP (Conservative, Sleaford and North Hykeham)

Jacob Rees-Mogg MP (Conservative, North East Somerset)

Mrs Linda Riordan MP (Labour/Cooperative, Halifax)

Henry Smith MP (Conservative, Crawley)

Ian Swales MP (Liberal Democrat, Redcar) The following member was also a member of the committee during the parliament: Sandra Osborne MP (Labour, Ayr, Carrick and Cumnock)