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Subsidiarity Assessment: Food Distribution (EUC Report)

Volume 733: debated on Monday 28 November 2011

Motion to Take Note

Tabled By

That this House takes note of the Report of the European Union Committee on the amended Commission Proposal for a Regulation of the European Parliament and of the Council amending Council Regulation (EC) No.1290/2005 and Council Regulation (EC) No.1234/2007 as regards distribution of food products to the most deprived persons in the Union (COM(2011)634, Council Document 15054/11) (23rd Report, HL Paper 217).

My Lords, in the absence of the noble Lord, Lord Roper, I beg leave to move the first Motion standing in his name on the Order Paper. It fell to the EU Sub-Committee on Agriculture, Fisheries and Environment, which I chair, to carry out detailed scrutiny of the latest proposal in relation to food for the deprived. In doing so, we were conscious of the consideration which we gave a year or so ago to the previous version of the proposal. Both the sub-committee and the EU Committee itself, which the noble Lord, Lord Roper, chairs, took the view that the changes made to the latest proposal did nothing to remedy the failure to comply with the principle of subsidiarity.

It is tempting to use this occasion to talk about the common agricultural policy as the evolving backdrop to the scheme to distribute food to deprived persons but, since time is limited, I will make only two remarks in this respect. First, when the scheme was initiated in 1987, a largely unreformed CAP generated excesses of butter, milk powder, beef, sugar, rice and cereals—the so-called food mountains—which allowed food to be released to charitable organisations in participating member states. Those days are long gone. Surplus stocks are now very low and in recent years the scheme has in fact relied on open-market purchases of food, so the link between the scheme and the CAP, clear enough in the past, has become more and more tenuous in the present.

I hope that your Lordships will take the view, as the committee has done, that the task of tackling deprivation faced by our fellow citizens rightly falls on the member states, not on the EU itself. No one should downplay the scale of the challenge on social protection across Europe. Data on expenditure in that regard in October this year—I am relying on data from Eurostat, the European Commission's own source—showed that, in 2009, the 27 member states spent over €3 million million on this support. That is, greater than the figure 3 followed by 12 zeroes of euros: a colossal amount of money. Compare the scheme for deprived persons that is being proposed here of €500 million or so. Doubtless that can buy a great deal of food, but in respect of the total spend by member states it is not of great significance.

Your Lordships will know that, in their Explanatory Memorandum, the Government have made clear that the UK has not participated in the scheme since the mid-1990s because of dwindling UK intervention stocks, and because of the bureaucratic overhead associated with ensuring compliance with the scheme’s rules to prevent fraud. The Government go on to say that,

“the UK believes that measures of this type are better and more effectively delivered by individual Member States through their own social programmes”.

As our report explains, we share the Government’s view on this matter. We are clear that the proposal does not comply with the principle of subsidiarity, and we hope that the House will accept our recommendations and agree to issue a reasoned opinion on the latest proposal. I beg to move.

My Lords, I support the arguments that have been put forward by the noble Lord, Lord Carter, who chairs the European Sub-Committee of the European Union Committee dealing with agriculture, fisheries and the environment and who prepared the report that we are considering today. This is an important issue and one of the occasions on which this House has the opportunity to argue why subsidiarity matters and why some things ought to be done at a national level, not at a European level.

As the noble Lord said, the food distribution programme made sense when there were significant European surpluses. However, in the 24 years since the programme was introduced, probably at the time when the noble Lord, Lord Williamson, was responsible for these matters, things have changed. There are no longer surpluses that it is perfectly legitimate for the European Union to distribute to member states where there are needy people. The argument has therefore changed. That is why, despite the fact that the European Commission, in preparing its proposals for this document, modified them from the document on which this House gave an opinion about a year ago and suggested that there was a reasoned opinion against subsidiarity over the old proposal, in our view there is no longer a satisfactory situation.

We do not believe that any European value-added is produced by producing €500 million on buying things from the open market to give to needy people. Member states should do that—there are lots of reasons why they should—but that is a decision for the 27 member states of the European Union. That is why this report has been produced and why, although the earlier proposal has been withdrawn as a result of a judgment by the Court of Justice of the European Union, we still believe that this is a serious error.

As we say in our report, neither the proposal nor the Commission’s Explanatory Memorandum produces an explicit subsidiarity justification as required by Article 5 of the protocol on the application of the principles of subsidiarity and proportionality. However, it seems clear from the summary of the impact assessment that accompanied the original proposal of three years ago that the Commission sees three reasons for this. These include the view that the programme addresses problems of hunger, deprivation, poverty and social exclusion in the spirit of the treaty and that it supports the objective of strengthening the Union’s social cohesion.

Our report sets out our consideration of those justifications. I will not repeat them at length. The nub of our assessment, this year as last, is that the spirit of the treaties can be respected without the European Union acting in this respect. Moreover, we consider that member states are capable of acting individually to fulfil those objectives if they so wish, and in any case the failure of European member states to act is not in itself a reason why the EU should act. In conclusion, we again take the view that there is no compelling argument to suggest that the Union is better placed than its member states to ensure a food supply to its most deprived citizens.

We know that the Government share our view on this proposal—indeed, I believe that it is also the view of the opposition Front Bench—and in their Explanatory Memorandum they have stated their belief that,

“measures of this type are better and more effectively delivered by individual Member States through their own social programmes”.

The Scottish Parliament has taken a similar view and the Swedish Parliament, the Riksdag, has also issued a reasoned opinion sharing our view. Other member states such as Denmark and the Netherlands share our concerns, though we are not yet sure whether they have issued reasoned opinions.

The Government have told us that, unfortunately, agreement in principle on this measure has been reached following a decision by Germany to accept a time-limited extension of the scheme to the end of 2013. There appears to have been movement at the political level but certainly not, in our eyes, at the level of the underlying policy.

While the European Commission has made changes to the proposal that we considered a year ago, we think that those changes make no difference to our assessment of whether the proposal is in compliance with the principle of subsidiarity. We consider that it is not compliant with that principle and therefore recommend that the House should issue a reasoned opinion on the latest proposal.

My Lords, it was of course only in November last year that the House took the view that a proposal from the European Commission on the distribution of food products to the most deprived persons in the Union did not comply with the principle of subsidiarity, and we sent a reasoned opinion to that effect to the Presidents of the European Parliament, the Council and the Commission in accordance with the treaty. As the noble Lord, Lord Roper, stated, on 13 April 2011 the European Court of Justice annulled the provisions of the food distribution plan providing for purchases from the market. In consequence, the Commission has now submitted a new proposal, which we have before us, from 2011, document number 634 final, adding a new treaty base, Article 175(3) of the Treaty on the Functioning of the European Union, which relates to social cohesion. As has been stated, the reason for this is that the Commission wants to make market purchases a permanent source of supply for the scheme when there are no longer the intervention stocks that used to exist in the Union. They have gone and the Commission wants to turn to the market.

The European Union Committee of the House has recommended that the objection on the grounds of subsidiarity that applied to the earlier proposal applies equally to the new one, and that we should issue the revised opinion in paragraphs 5 to 11 of the committee’s report. I agree that we should be consistent and follow the advice of our European Committee. Of course there may be good reasons for supplying food to the most deprived citizens, but today we are concerned only to judge whether this might be done at EU level and on the EU budget. The principle of subsidiarity that is in the treaty on the European Union in Article 5(3) states inter alia that,

“the Union shall act only if and insofar as the objectives of the proposed action cannot be sufficiently achieved by the Member States, either at central level or at regional and local level, but can rather, by reason of the scale or effects of the proposed action, be better achieved at Union level”.

We do not agree that this proposal corresponds to that part of the treaty.

Although the principle of subsidiarity may not have much impact, it is none the less an important provision. It is in line with much of British opinion and we should play our role in seeking to ensure that it is respected. As we seldom see the text of a Commission proposal for legislation in this Chamber, I would add three short comments. First, the Commission proposal, which as usual is clearly drafted and easy to understand, is not a law. Bureaucrats in Brussels cannot and do not make laws on a subject such as this. Substantive laws are made jointly by the Ministers of the member states in the Council and the European Parliament. This may seem self-evident, but in view of the widespread public misunderstanding, I emphasise it in this case.

Secondly, it is interesting to note that the European Court of Justice annulled provisions of the earlier proposal because the legal base was not sufficient, showing the value of the oversight by the court. Thirdly, and lastly, as has already been stated, this case shows clearly the transformation of the agricultural policy of the Union—the old CAP—as market intervention has been removed or drastically reduced and intervention stocks are no longer generally available for this scheme. I support the proposal of the European Union Committee of this House.

My Lords, I am delighted to follow and to support everything that has been said by the noble Lord, Lord Carter of Coles; our committee chairman the noble Lord, Lord Roper; and the noble Lord, Lord Williamson, particularly with his experience of dealing with the situation when it was entirely different. I propose to add nothing to what they say, but to ask a few questions of my noble friend. Does he agree with me that this is a serious matter? As far as I understand it, this is only the third reasoned opinion that this House has given, but it is identical to the one we passed on 3 November. Why are reasoned opinions passed by this House taken so lightly by the Commission? What negotiations has the Minister had with the Commission? What was its reaction to our previous reasoned opinion?

It is all very well for the Commission to make a slight tweak to what it presents to us because the European Court of Justice ruled it out of order, but that does not satisfy me. I want to know what the Commission has done to take on board our concerns. I hope my noble friend will update me on that. If the Commission does not take on board member states’ concerns about reasoned opinion, there is no point in us producing reasoned opinion. If it is as dismissive as it has been to date, it will only intensify the disregard and dislike of the Commission that many in this country have.

May I also ask the Minister about the current state of negotiations? I was appalled to read the letter from his fellow Minister, Mr Paice, of 15 November, in which the Germans seem to have decided with the French in, if no longer smoke-filled rooms, the corridors of power to do some dirty deal and produce a draft joint minute telling the rest of the European Union’s members what they can accept from the Germans and the French. That is pretty unacceptable, too. I hope that he has made strong representation to the Germans about this. Surely it is wrong in principle, as has been well said, for some sort of shady deal in which this matter is done at European level rather than at member-state level to the end of 2013. Let us hope that in negotiations about what will happen after that, when the French will be keen to continue this into the next round, the Germans will be in a weaker position than they would be if they remained firm and principled.

I should declare an interest as a member of the EU Sub-Committee D, which has brought forward this opinion. It has now considered this and similar proposals from the Commission on three occasions. On all three, it has taken the view that the proposal has little justification now that intervention stocks have more or less disappeared. Redistribution to deprived groups within society to relieve their poverty is essentially, we maintain, a matter for member states, not for the Union, and it is really ridiculous that CAP funds—€500 million—should be used to buy foodstuffs on the markets for such redistribution. If anything, such purchases would tend to drive prices up and exacerbate food poverty rather than the reverse.

As we have seen, however, the Commission is very persistent. In its explanatory memorandum it justifies its actions on the grounds that in March 2009, the European Parliament strongly advocated the maintenance of the full Union’s funding scheme, which amounts to €500 million, and that this opinion was reinforced in January this year by the European Economic and Social Committee. In addition, it points to the current economic crises and suggests that certain member states that have benefited in the past might not be able to meet the co-financing proposals that were put forward last year and that this justifies dropping them.

As for the European Court of Justice’s opinion that the justification for the scheme under Articles 42 and 43—the agricultural articles—could support the scheme only when it was redistributing surpluses acquired through intervention powers, the Commission now comes back to justify it under Article 157(3) as helping to promote economic, social and territorial cohesion. I join others in thinking that the opinion that this House came to last year still stands: purchasing food from the market and distributing it to deprived people is a matter for local decision. At present, 20 member states, including it would seem both France and Germany and some of the richest countries within the Union, benefit from the scheme. Perhaps that is one reason why the Commission can claim that it is backed by so many member states. Breaches of the subsidiarity rules are justified only where action by the Union would, by reason of its scale or effects, produce clear benefits which would not be available if similar action were taken by member states. In this debate last year, the noble Baroness, Lady Howarth, who is also a member of our committee and was at one time chair of the Food Standards Agency, spoke about various local schemes that had been set up in the UK to relieve food poverty. She said:

“Food networks are local, direct and know their communities. They are not overbureaucratic and, consequently, are flexible in responding to need. Above all, they are transparent. We should leave them uncluttered by intervention by the Commission, however well intended”.

She concluded that there appears,

“to be no compelling argument to suggest that the Union is better placed than member states to ensure a food supply to its most deprived citizens”.—[Official Report, 3/11/10; col. 1684.]

I concur entirely with what she said this time last year. Nothing has changed since then to alter the conclusion. I fully endorse it and, in so doing, support the Motion to issue another reasoned opinion of the same ilk.

My Lords, I should like to reinforce what my noble friend Lady Sharp has just said. I declare that I am also a member of Sub-Committee D. Unfortunately, through illness, I could not be here last year to participate in the discussions. I have one or two basic questions for my noble friend when he comes to reply. Like others, I certainly think it is the responsibility of individual member states to look after those who are in need; that is the best way to supply it.

However, the proposal was to raise the sum of money to €500 million. My question to my noble friend is: which countries have benefited from it and how much have they had? Although the UK takes the very clear stance that it should be done locally, which I hope my noble friend will reflect in his comments, clearly the money will come from Europe, to which we contribute. If the Minister has figures that he can share with us tonight, I would be interested to hear them. If he does not, perhaps he will write to us to let us know. It seems a very unusual situation—to be opposed to something that is being proposed and will be imposed, over which we have no control except to have the debate that we are having here tonight. I should just like to reinforce my concerns about the way in which it is being proposed.

Some 17 member states and some 18 million people benefited back in 2010, but, as other noble Lords have said, when there was a surplus it made sense to use it and distribute it. However, that is not the situation that we face today. I assure noble Lords that buying in from the market is not the cheapest way to do things. Therefore, we look to my noble friend for some steer on the Government’s thinking about how they will deal with what is proposed, and how we can say, “No, we don’t think this is a good idea”. As one of the member states, we are presumably committed to providing that money up front.

I apologise to other noble Lords for not being able to take part in discussions last year through illness, but I am very glad that we have had the debate tonight. I reinforce my support for the Motion moved by the noble Lord, Lord Carter, and for the comments of other noble Lords. Clearly the situation should not continue.

My Lords, it is very good to hear the principle of subsidiarity being upheld and defended. I am also inclined to think that this House should be consistent in maintaining the reasoned opinions that it has previously given.

The Commission, and perhaps some member states, might like to examine how food stamps in the United States have worked out in practice. The United States probably has less comprehensive and less long-term social welfare arrangements, compared to many European countries. On the other hand, I expect those who devised the food stamp scheme took full account of the interests of commercial food producers and of the market generally.

I conclude by asking the Government how many civil servants within the Commission have been employed, or are still employed, in dealing with these matters. If things go ahead in the way that we wish, will some of them no longer be needed? What will happen to them? Having said that, I support the Motion.

Like others, I begin by thanking the noble Lord, Lord Roper, and my noble friend Lord Carter of Coles for the work of European Union Committees that they chair and for their exposition tonight. The House has heard that this is essentially a repeat of the Motion debated on 3 November last year, since the amended Commission proposal does not materially alter the thrust of the original document. All sides of the House concur that the revised food distribution programme is still defective, as the substance and objective of the measure remain basically the same.

We have heard how the proposal has fared since the debate last year. In April this year, the European Court of Justice annulled the provisions of the 2009 distribution plan providing for purchases on the market. As a consequence, the budget for 2012, based entirely on intervention stocks, accounts for only €113 million against a proposed €500 million. This is a success indeed against the mission creep of the original scheme. However, in July, the European Parliament called on the Commission and the Council to develop a solution to avoid a sharp cutback in food aid as a result of the reduction in funding. The memorandum states:

“Numerous representations of the European civil society, ranging from local authorities to NGOs and charities, have expressed their worries for the future of the scheme”.

This suggests that it will not be a simple matter to resolve the situation in the manner this House would wish. The Minister at last year’s debate, the noble Lord, Lord Henley, assured the House that no charitable organisations in this country had asked the Government to participate in the scheme. He also stated that,

“no member state at the moment actually supports the scheme”.—[Official Report, 3/11/10; col. 1691.]

Where does the support for this programme seem to come from? There does not appear to be a member state that looks on this as part of its budget. Is there any similarity or region characteristic to the 18 million people said to have benefited as recently as 2010?

On cofinancing, the memorandum states, in very similar fashion, and again on page 4:

“National authorities of participating member states and very numerous representatives from the civil society have recently expressed their wish for the scheme to remain fully funded out of the EU budget”.

What discussions have taken place between those member states and the Government? While the Minister last November, the noble Lord, Lord Henley, commented that there was some way to go before this proposal would succeed, the intervening period seems to underline that the proposal’s supporters will not easily be deterred. The Economic and Social Committee and the Committee of the Regions of the European Union also came out in favour in January this year.

I support the Motion in the name of the noble Lord, Lord Roper, and commend the committee for its deliberations. I understand that although the question of subsidiarity did not feature in the treaty of Rome, the position is covered under the Lisbon treaty that, in matters of shared competence, the EU can act only and in so far as the objectives of the proposal cannot be sufficiently achieved by member states. Could the Minister clarify the Government’s position? Are the Government content that the reversal to the original intention to distribute only out of intervention stocks could still continue, albeit now on a much reduced budget? Do the Government consider that the Treaty on the Functioning of the European Union can be used as a legal base to the amended proposal? I look forward to the Minister’s update and his proposals to carry forward the determination shown tonight by all sides of the House against the amended proposal.

My Lords, I am grateful to the noble Lord, Lord Roper, and the EU Committee for giving us the opportunity to debate this matter this evening, and indeed to the noble Lord, Lord Carter of Coles, for introducing our debate and for chairing the committee. Its report is welcome. This debate has been opportune and I am able to update noble Lords on meetings as recent as today. Let me make it quite clear at the outset that the Government continue to share the committee’s view that the Commission’s latest proposal is not consistent with the subsidiarity principle. In that position it is supported not only by the committee but by all speakers in our debate this evening, so many of whom, I am pleased to see, are members of the committee.

I know that your Lordships are well aware of the background to this scheme, and the noble Lord, Lord Williamson, pointed out that we had debated this topic as recently as last November. When the scheme was first introduced in 1987, it was used as a mechanism to derive benefit from the growing intervention stocks and to save European embarrassment in running down these stockpiles. I point out to my noble friend Lady Byford that the 18 million people who benefited from these stockpiles came mainly from the following list of countries. In the 2012 allocation, the countries were: Spain, €18 million; France, €15 million; Italy, €22 million; Poland, €17 million; and Romania, €12 million. In fact, all member states participate, other than Denmark, Germany, Cyprus, the Netherlands, Austria, Sweden and the UK.

In the current context, this scheme no longer has a basis in the intervention stocks because they are significantly reduced to the point at which they are more or less insignificant. As a result of an increasing focus on purchasing products on the open market, the Commission has had to provide new proposals to adapt the scheme. I am unable to say how many civil servants have been engaged in this exercise, but I shall do my best to ascertain the number, although it may be difficult to satisfy noble Lords on that point.

Several recent proposals have failed to achieve a qualified majority in favour within the Council. Yet we have before us another proposal. Perhaps I may say to my noble friend Lord Caithness that the noble Lord, Lord Grantchester, is absolutely right to say that under the Lisbon treaty certain criteria must be met. The proposal depends on the number of reasoned opinions received. One-third of votes are required from Parliaments that consider that the proposal is not compliant with the principle of subsidiarity—a so-called yellow card—or more than half the votes in the Council must consider that the proposal is not compliant. Based on the response to the 2010 proposal, neither of those conditions was met. Therefore, our reasoned amendment is not without force or consequence, but the Commission has been unnecessarily determined to push its proposal despite our criticism and reason for it.

What is specific about this latest proposal? One key development earlier this year was a judgment in the Court of Justice of the EU on the provisions of the 2009 distribution scheme that provided for purchases on the open market. In the court’s view, the existing regulation did not provide an adequate legal base for the purchase of food on the market other than on an exceptional basis when intervention stocks are temporarily unavailable. This ruling has had an immediate impact on the operation of the scheme by limiting the budget for 2012 to approximately €113 million. On current projections, there will be no intervention stocks to supply the programme in 2013.

Against this background, the Commission has made a further amended proposal that reflects the Commission’s attempts to justify the provisions for the sourcing of food from the market as a matter of course, rather than on an exceptional basis—as was the case in the past. The Commission has indicated that it intends this proposal to be a transitional measure to ensure the continuation of the existing programme until the end of the current multiannual financial framework in 2013. The Commission is expected to come forward with further proposals for a food distribution scheme for deprived people to be funded solely by the European Social Fund from 2014, under heading 1 of the EU budget.

Nevertheless, the Government’s view has not changed. We remain unconvinced as to the merits or appropriateness of this proposal. The Commission’s attempt to make use of social cohesion as a legal base confirms our view that the scheme is no longer an agricultural measure but one which has a fundamental social principle behind it. My noble friend Lord Caithness will know that the Government share his view of the behaviour of the Commission in this matter. As several noble Lords including the noble Lord, Lord Hylton, pointed out, in accordance with the principle of subsidiarity there is a long-standing general principle of union law, currently enshrined in Article 5 of the Treaty on European Union, that the Government consider the EU should act collectively only where there are clear additional benefits or EU added value compared with action by member states either individually or in co-operation.

We consider that such measures to assist the neediest members of society can be better and more effectively delivered by individual member states through their own social programmes and not at EU level. As noble Lords will know, we have a Healthy Start programme here in this country. It is the member states and their regional and local authorities that are best placed to identify and meet the needs of deprived people in their countries and communities, and to do this in ways that are administratively simple and efficient. The proposal has long been discussed in Council and the UK, along with a number of other member states. We maintained our opposition to the scheme on the grounds that social measures are a matter for individual member states, and therefore the proposal is not in line with the principle of subsidiarity.

However, in the margins of the Agriculture Council’s meeting on 14 November, following French and German bilateral discussions to which my noble friend Lord Caithness has drawn our attention, the German Minister indicated that she could accept a time-limited extension of the scheme until the end of 2013 provided there was a guarantee that funding would not continue into the next financial perspective. During discussions in the special committee on agriculture earlier today, it was clear that Germany had not received the assurances it was looking for from the Commission in not coming forward for new proposals for a similar programme in the future, and as such I can say that the qualified majority in favour does not yet exist.

The Government will consider their position, as they should in light of any proposed compromise, but they will continue to oppose the principle of expenditure on social measures of this kind being funded from the EU budget. Clearly, as my noble friend Lady Sharp pointed out, it is important that all our citizens have enough food to eat and supporting them through these difficult times is no doubt a matter of some priority for each member state.

In the UK, the Healthy Start scheme, for example, provides a nutritional safety net in the form of vouchers for basic healthy foods and free vitamin supplements for pregnant women and children under four in disadvantaged and low-income families. Also, as many noble Lords will know, FareShare and FoodCycle provide good examples of the essential work that charities are doing to support communities to relieve food poverty. In 2010-11, the food distributed by FareShare contributed towards 8.6 million meals, with the number of people being fed daily averaging 35,500. The point remains, that ensuring the availability of adequate food for the most deprived citizens is an activity not best undertaken at EU level, nor in our view an appropriate use of the EU budget, as the noble Lord, Lord Williamson, said.

I hope this helps your Lordships in completing your scrutiny of this proposal. I suspect noble Lords will want to remain on continuous alert where this proposal is concerned but I thank the committee for its report, and the Government support the Motion on the reasoned opinion.

Motion agreed.