Background

  4.1  In December 1998, the European Parliament (EP) adopted a proposal for a Statute laying down terms and conditions for Members of the European Parliament (MEPs). It was required to do so under the Treaty of Amsterdam, after seeking an opinion from the Commission and with the approval of the Council, acting unanimously. Agreement was not reached on this draft or on the Council draft which we cleared on 21 April 1999.[8] After almost a year of deadlock, a "Group of Eminent Persons" was set up. We considered their report on 25 October 2000, 15 November 2000 and 10 January 2001[9] and recommended it for debate in European Standing Committee B.[10]

  4.2  The deadlock continued and there is still no Statute. Instead MEPs remain eligible for the same salaries, pensions and other benefits as their national counterparts, with the result that they receive vastly differing packages.

The document

  4.3  On 22 January 2003, the Committee on Legal Affairs and the Internal Market of the EP issued the current document, a draft report, as authorised by the President of the EP. The rapporteur, who was appointed in 1999, is Mr Willi Rothley. This is the first serious attempt to make progress since late 2001.

  4.4  The Minister for Europe (Mr Denis MacShane) summarises the key elements of the draft as follows:

"i)    Expenses: the draft Statute does not contain explicit language on expenses. This is to be dealt with, in parallel to the Statute, in a separate Regulation being drafted by the EP bureau. The Bureau does not have to consult the Council. However, we have been advised that the Regulation will place the expenses regime on a 'actual costs incurred' basis.

 ii)    Taxation: the draft Statute proposes that the salaries and pensions of MEPs be subject to Community taxation. Member States have the option of charging additional tax to bring the total tax paid by their MEPs up to the level of their national tax. Member States would be required to declare in advance of each legislative session whether this would apply.

 iii)    Health and Social Security: the draft Statute provisions are intended to be distinct from any national systems that are in place. UK MEPs would therefore remain within the same social security system as their constituents.

 iv)    Salary: the draft Statute links MEP salaries to 50% of an ECJ judge. This would amount to an MEP salary of approximately _8,500 [£6,035] per month. This salary would be paid from the Community budget.

 v)    Pensions: the draft Statute proposes a pension age of 60 and a pension accrual rate of 3.5%. Westminster MPs and UK MEPs currently have a pension age of 65 with a 2.5% accrual rate. The draft also provides for the winding up of the EP's own voluntary pension scheme, which MEPs can currently opt in to (thereby gaining the benefit of EP contributions). Acquired rights and future entitlements would be protected, but there would be no further accrual of benefits.

 vi)    Grandfathering: the draft Statute allows existing MEPs to maintain the current ad hoc arrangements (with the exception of expenses) for the duration of their mandate."

  4.5  The Minister does not refer directly to Articles 5, 6, 7 and 8 of the draft Statute, which seek to confer a number of privileges and immunities on MEPs. Article 5 relates to freedom from arrest and from seizure of documents and records, whilst Article 6 relates to the giving of evidence by MEPs. Article 7 concerns the freedom of movement of MEPs throughout the European Union, and Article 8 provides that the privileges and immunities conferred by these Articles 'may not be restricted by other provisions of the European Community's derived legislation'.

  4.6  By virtue of Article 5(1) 'any restriction of a Member's personal freedom may be permitted only with the consent of Parliament, except where he or she is arrested in the act of committing an offence'. Article 5(2) similarly provides that the seizure of a Member's documents or electronic records or the searching of his/her person, office or place of residence or the interception of mail or telephone calls 'may be ordered only with the consent of Parliament'. Article 5(3) provides that investigations or criminal proceedings against a Member 'shall be suspended at Parliament's request'. A footnote to Article 5 indicates that it is not to enter into force 'until Article 10 of the Protocol on Privileges and Immunities of the European Communities is repealed'. Paragraph 50 of the Preamble to the Report asserts that the 'up-to-date' solution provided by Article 5 'must not remain blocked by the completely outdated provisions of Article 10 of the Protocol'.[11]

  4.7  Article 6(1) provides that a Member 'shall be entitled at all times to refuse to give evidence about persons who have entrusted facts to him/her, or to whom s/he has entrusted facts, and also about such facts themselves. Article 6(2) prohibits, for these purposes, the ordering of measures restricting freedom of movement or the 'exploitation of documents already seized'.

The Government's view

  4.8  In his Explanatory Memorandum of 28 March 2003 the Minister for Europe (Mr Denis MacShane) comments as follows:

"Various attempts have been made to secure agreement on this dossier, but to no avail. MEPs have now taken the initiative once more, spurred on by imminent enlargement and the 2004 European Parliamentary elections. The Treaty of Nice has shifted decision-making in the Council on this dossier from unanimity to QMV (although retaining unanimity for the taxation elements).

"We must secure an open, fair and transparent expenses regime firmly based on the reimbursement of costs actually incurred. We understand that the separate Regulation on expenses being drafted by the EP Bureau will address these concerns. We would prefer for there to be an explicit recognition in the body of the Statute itself that the expenses regime enshrines the principle of reimbursing actual costs incurred. But the key must be to ensure a robust regime is provided for in the Regulation.

"The Government has long argued that MEPs should pay the same tax as their constituents. We therefore see no difficulty with the current terms in the text, which would make MEPs subject to Community taxation, yet allow Member States to charge additional tax to bring the total tax paid by their MEPs up to the level of national taxation. We fully intend to make the necessary declaration before each legislative session to ensure the UK MEPs would pay national taxation top-up rates. Primary legislation would be necessary to amend the UK's domestic tax provisions so as to allow credit for the Community tax against the UK tax due.

"Although the wording of the health and social security provisions of the draft Statute is ambiguous, our understanding is that they are intended to be distinct from any national systems that are in place. The Statute would therefore not affect the current system and UK MEPs would continue to be required to make National Insurance contributions.

"We are relaxed about MEP salaries being linked to a proportion of the salary of an ECJ judge. This would tie MEP salaries to the Methode - the means of calculating European Civil Servants' annual pay increases. The Methode is a transparent process which traditionally delivers low pay rises. However, it would see an initial salary increase for UK MEPs to around _8,500 per month (they currently receive approximately _7,000 depending upon exchange rate fluctuations). This is rather high. Other Member States share this view. We are urging caution and discipline.

"The pensions proposals are also generous. If the retirement age is to be lower than 65 years, we would want a suitable reduced accrual rate to offset that. We are pleased with the proposal to bring an end to the second, publicly-funded pension scheme which some MEPs enjoy. It is right, however, that those who have contributed should have their acquired rights and future entitlement protected.

"Providing grandfathering arrangements (with the exception of the expenses regime) for existing MEPs for the duration of their mandate would do little to improve the public image of the EP and would be difficult to justify. We are pressing for this element of the package to be revisited."

  4.9  The Minister says that the EP's Legal Affairs Committee was due to vote on the text at the end of March and to discuss it at the EP plenary in May. If adopted, it will be forwarded to the Council, which would only be able to accept or reject the EP's proposed text.

Conclusion

  4.10  We welcome this move to resolve this long-standing and contentious issue. As the Minister says, the Government has long argued that MEPs should pay the same tax as their constituents, and we are not surprised, therefore, that it has no difficulty with the formula in this draft on taxation. The salary proposed looks on the high side to us, as it does to the Government, but we agree that it is sensible to tie it to the Methode. We also agree that the "grandfathering" arrangements would be difficult to justify and would not improve the public image of the European Parliament.

  4.11  The Minister comments on the ambiguity of the provisions concerning health and social security. We ask the Minister to explain further the proposed relationship between the distinctive provisions under the Statute and those under UK law which will continue to apply to UK MEPs.

  4.12  We note that the Minister did not comment specifically on the provisions of Articles 5, 6, 7 and 8.  These appear to us to confer more

    extensive immunities from legal proceedings and criminal investigations than are currently enjoyed by MEPs, and we ask the Minister if he believes that the conferring of immunity from prosecution is a matter falling within Article 190(5) EC. We are not persuaded that a rule which has the effect of permitting the European Parliament to order a national prosecuting authority to desist from a prosecution can properly be made under Article 190(5) EC. We are equally unpersuaded that such a wide immunity from legal proceedings in an MEP's own Member State as is foreseen in Articles 5 to 8 can be justified, and we ask the Minister if he shares these misgivings.

  4.13  We shall hold the document under scrutiny pending the Minister's reply.

9   (21432) 9712/00; see HC 23-xxvii (1999-2000), paragraph 3 (25 October 2000); HC 23-xxix, paragraph 2 (15 November 2000); and (21432) 9712/00; see HC 28-ii (2000-01), paragraph 2 (10 January 2001). Back

10   Official Report, European Standing Committee B, 29 January 2001, European Parliament. Back

11  Article 10 of the Protocol on the Privileges and Immunities of the European Communities provides:

"During the sessions of the Parliament, its members shall enjoy:

(a) in the territory of their own State, the immunities accorded to members of their parliament;

(b) in the territory of any other Member State, immunity from any measure of detention and from legal proceedings.

Immunity shall likewise apply to members while they are travelling to and from the place of meeting of the Parliament.

Immunity cannot be claimed when a member is found in the act of committing an offence and shall not prevent the Parliament from exercising its right to waive the immunity of one of its members." Back