Third Standing Committee on Statutory Instruments, &c.



Tuesday 23 January 1990



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The Committee consisted of the following Members:


Allen, Graham (Nottingham, North)

Anderson, Mr. Donald (Swansea, East)

Bell, Mr. Stuart (Middlesbrough)

Carlisle, Mr. Kenneth (Lincoln)

Cousins, Mr. Jim (Newcastle upon Tyne, Central)

Fishburn, Mr. Dudley (Kensington)

Hughes, Mr. Simon (Southwark and Bermondsey)

Knight, Dame Jill (Birmingham, Edgbaston)

Lord, Mr. Michael (Suffolk, Central)

Marshall, Mr. Michael (Arundel)

Mitchell, Sir David (Hampshire, North West)

Neale, Mr. Gerrard (Cornwall, North)

Nelson, Mr. Anthony (Chichester)

Porter, Mr. Barry (Wirral, South)

Rost, Mr. Peter (Erewash)

Sainsbury, Mr. Tim (Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs)

Smith, Mr. John P. (Vale of Glamorgan)

Spearing, Mr. Nigel (Newham, South)

Mr. C. D. Stanton, Committee Clerk

3 Third Standing Committee on Statutory Investments, &c. Tuesday 23 January 1990

[SIR ANTHONY MEYER in the Chair]


10.30 a.m.

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Sainsbury): I beg to move, "That the Committee has considered the draft European Communities (Privileges of the European School) Order 1989."

The Chairman: With the agreement of the Committee, it will be convenient to discuss at the same time the draft European Communities (Definition of Treaties) (European School) Order 1989.

Mr. Sainsbury: May I first draw the Committee's attention to a matter that I am sure hon. Members have all, being eagle-eyed, already noticed? The orders were tabled last year, but those that are tabled will have the date 1990 rather than the date 1989 put upon them. The United Kingdom acceded to the statute of the European school and protocol on 30 August 1972. The European school at Culham in Oxfordshire was set up in 1978 to provide a school for the children of Community staff working at the Joint European Torus, known normally as JET. A substantial number of scientists and officials working at JET are members of the staff of the European Commission and may at any time be required to return to other Community centres or to their own member states. Article 28 of the statute of the European school provides for the conclusion by the board of governors of the school of agreements governing the treatment of the schools. It is in accordance with this provision that the headquarters agreement between the United Kingdom and the board of governors concerning the European school at Culham was concluded. This headquarters agreement is designed to ensure, in accordance with article 28 of the statute, that the school can operate "in a favourable atmosphere under the best possible physical conditions. " The agreement serves the purpose of applying in detail the general provisions on the establishment and government of European schools which are included in the statute and the protocol. It is, therefore, ancillary to the statute and protocol, which are themselves regarded as pre-accession treaties, and therefore comes within the terms of section 1(3) of the European Communities Act 1972. It is, therefore, proposed that the first draft order before the Committee, that relating to the definition of 4 treaties, should be made under section 1(3) of the 1972 Act specifying the headquarters agreement as a Community treaty. That order provides the basis for the second order, that relating to the privileges of the European school provided by the headquarters agreement, which will be made under section 2(2) of the European Communities Act. The headquarters agreement specifies the privileges which the European School is to enjoy in the UK. The principal privileges to be conferred are, first, for the European school itself, legal capacity, exemption from taxes on income and capital gains, relief from VAT, exemption from import duties; secondly, for teachers seconded to the school by member states, exemption from social security legislation, first arrival customs privileges, exemption from income tax on earnings, limited in the case of staff seconded by the United Kingdom to the European supplement paid by the school. Similar privileges have been granted by all other host Governments. The UK is in any event required to provide exemption of the European supplement by judgment of the European Court. The locally recruited staff at the school do not benefit from these privileges, and the Committee will note that no one is given any immunity. The draft Orders in Council will, when made, enable the Government to give effect to the agreement between the United Kingdom and the board of governors of the European school. We are satisfied that the privileges accorded under the draft orders are necessary both to fulfil our obligations and to enable the school at Culham to function effectively. I commend the orders to the Committee.

10.34 a.m.

Mr. Donald Anderson (Swansea, East): I am grateful to the Minister for his explanation of the motion and the draft orders. We were a little puzzled at first by the withdrawal of the original draft of the motion and its amendment by the inclusion of the word "forthwith", but I understand that that is solely a technical device to provide that the essential base is in place before the draft order is taken. It has, however, at least the point of interest that this is the first time that such a procedure has been deemed necessary the first time that the Privy Council has accepted that the vires point must be established in this way as a first step. We consider that in one sense our proceedings today are a formality. The background is contained, I understand, in the ruling of the Court of Justice of the European Community in Luxembourg, which was delivered on 15 January 1986, in the reference for a preliminary ruling by the Inland Revenue Commissioners in the case of Hurd v. Jones (Her Majesty's Inspector of Taxes). I recommend members of the Committee to read that ruling, which is a masterpiece of elegance and learning. It appears, as the Minister said, that the order is an obligation which arises from our accession to the European Community. We accept also that it implements that obligation to the extent necessary and no further, although I confess to having one or two feelings of apprehension about the first arrival 5 customs privileges, for example, in respect of motor vehicles. As the Minister said, the school has existed for some time without these problems arising, and one wishes to put the relevant teachers, essentially those who are non-British nationals, in the same position as they would be in if they were in their own countries. That is of course necessary in respect of social security obligations. I am not wholly convinced that that extends to the privilege of bringing in a motor car on which the relevant duties will not have been paid, but that appears to be part of what is being done by our Community partners. Clearly we in Parliament must be alert to any extensions of privileges in this country. As I said, in one sense we have managed since 1978 without the clarification which has now been given, but it appears that the matter must be put in order as a result of the Hurd ruling. As the Minister said, similar arrangements have been agreed in respect of all the educational institutions of a similar nature on the territory of our European partners, although there appeared to be some doubt about the position in relation to Italy, which is par for the course, I understand, in respect of Italy. In the circumstances, I can be brief and say that we concur in the procedure today.

10.37 a.m.

Mr. Nigel Spearing (Newham, South): I find myself in rather unusual circumstances this morning, and it might be best if I declared a semi-interest as a reluctant member of the Committee. As you know, Sir Anthony, the way in which hon. Members are appointed to Committees is not entirely straightforward. The Committee of Selection, either through card indexes or buttons or through people in other offices, must have looked up "EEC" and then looked up "Education" and happened upon my name because I have an interest in both matters. Therefore, any other function which I discharge in these matters, which is not related to the sitting of this Committee as it happens, is wholly coincidental. As you well know, Sir Anthony, the Committee with which I am associated has exhorted hon. Members on all sorts of occasions to attend such Committees as this one. Such exhortations having been made and having been thus summoned, I hasten to add without volunteering, it would have been difficult for me not to have appeared this morning. But for that, I do not think that I would have, because we all have many other things to do, although, as you will know, Sir Anthony—alas, it is not well known in the House, and I take the opportunity of advertising it, even perhaps to hon. Members present—any Member of the House can attend and vote in proceedings such as these—

The Chairman: Order. Attend, not vote.

Mr. Spearing: I beg your pardon, Sir Anthony. I should have said "attend and not vote"—to speak in such Committees, whether they be Committees considering statutory instruments, European Community documents or, like today's Committee, a mixture of both. May I first thank the Minister for his partial 6 explanation? What I wish to do this morning comes wholly under the term of glasnost—the scrutiny and examination of matters which might be arguable on their merits. I do not wish to go too far down the merits track, although any hon. Members present, is fully entitled to do so. But I think that it would be right for me to ask a number of questions, make a number of observations and draw the Committee's attention to some of the features of these combined orders. The Minister may not be able to answer these questions and may prefer to write to me afterwards. I have a distinct recollection of a similar debate, perhaps in this very Room, about ten or twelve years ago when another Minister was in the Minister's place, on a similar order. The first question that I ask, therefore, is whether the Minister can remind me why it is now necessary to debate these matters again? The matters may have been left in abeyance, although the school at Culham has been going strong for some years. Can he also tell us why we need to have both the treaty and the statutory instrument over again? The second question, which is also procedural, as most of my questions are, is about the delay to which he and my hon. Friend the Member for Swansea, East (Mr. Anderson) referred. I had a card before Christmas summoning me to the Committee, and then its cancellation, and I understood that the Select Committee on Statutory Instruments was looking at it. Its report is on the Table this morning. Can the Minister, or even perhaps you, Sir Anthony, tell us whether this report will appear—an extract from the Second Report of the Joint Committee has already appeared—what status it has in our proceedings, and whether the Minister wishes to make any comments on it? The Committee clearly questioned the matter of vires to which my hon. Friend referred, and whether the Government had capacity. I suspect that the only reason why is it in order is that the governors of the international school are Ministers of member states of the European Community. Therefore it is, as it were, a collective international agreement between our own Government and the other members of the Community. I suspect that that is why, in the careful words that the Minister read out at the beginning of his speech, these treaties are regarded as ancillary to the Treaty of Rome, because the treaty before us would not be part of that obligation. If it were, it would not be before this Committee. The next point to which I draw attention is the relationship between the statutory instrument and the treaty itelf. The statutory instrument, and in particular the explanatory note, does not refer—certainly the explanatory note does not, which is where I should have thought it be—to the treaty, as I read it. The treaty is in the Command series and is available publicly, priced at 1.30, Command 596. It is the treaty to which the statutory instrument regarding the school is consequential, but not the ratification statutory instrument. It refers to the treaty but the ratification statutory instrument does not. I turn now to a more important matter, the articles of the treaty themselves. Article 3 says: 7 "The Government shall place at the disposal of the School suitable premises." That implies that the costs of the building and its maintenance and upkeep are with Her Majesty's Government. I do not object to that. It seems on the face of it a sensible arrangement for the Governments of various member states who have those schools to look after them, through efficiency or efficacy. However, we are short of school premises in this country. I shall not go too far down that road, otherwise I may be accused of making a constituency point. I presume that we shall have a Vote on some fund or other providing costs for buildings. They are substantial, and I make no complaint about that. Schools should have good buildings. But I do not see why they should be more substantial or larger in size or standard than those of my constituents or of any Conservative Member. Will the Minister tell us about that? Article 8 is rather surprising. Article 8(b) includes the following words in relation to staff members: "unless they are United Kingdom nationals or permanently resident in the United Kingdom, shall be accorded the treatment in matters of exchange control which is accorded to a diplomatic agent in the United Kingdom." As I read it, that means that any staff appointed by the governors to the school at Culham, or indeed presumably elsewhere in other member states, are accorded the status of diplomatic agents for exchange control consideration. We all appreciate the need for some easement, which is certainly contained in article 8(d), of the liability to duties for anyone taking up a post, but I do not understand why that privilege should, on the face of it, be extended to all members of staff as though they were diplomatic agents. They are not involved in any diplomatic activity. I think that you could attest to that, Sir Anthony, from your own knowledge. They are professional teachers, albeit in an international school, and no doubt highly skilled in multilingual teaching. But it seems to be an additional privilege which needs some comment or explanation. Article 9 deals with income tax. One can understand that staff members seconded from other states might be given exemption. What I do not understand is article 9(2): "Staff members who are seconded to the School by the United Kingdom Government shall be exempt from United Kingdom income tax on salaries and emoluments paid to them by the School." I do not know whether, under the articles of the school, they are subject to further taxation from the EEC. I did not think its powers extended that far. But unless they are subject to some other form of contribution, they are not, like the rest of us, contributing to the resources of the EEC other than through their payments of value added tax. I shall come to that in a moment. I do not understand why that provision is there. I 8 presume it is because of the base treaties to which the Minister referred in his introduction. I take it to be an obligation ancillary to the Treaty of Rome that some intermediate treaty—and I think that it is named—incorporates those requirements on national Governments. Article 11 relates to the list of staff members eligible. It say that "the School shall from time to time send to the Government a list of all staff members. In each case the School shall indicate whether a staff member is a United Kingdom national or permanently resident in the United Kingdom." Whether one is a United Kingdom national is clear, but the definition of who is or is not permanently resident in the United Kingdom is one that might in the future, in these days of rapid movement, cause problems. I shall not go into the merits of that in this speech. What I am concerned about is that the judicial function of the deciding who is permanently resident in the United Kingdom is apparently, by this international treaty, to be transferred from our courts or from this House to the governors of the school. Is that appropriate? Perhaps the European Court itself might be more appropriate. It is a matter of vesting in the governors a judicial function which, small though it may be, can raise secondary issues of which no hon. Member needs to be reminded. Article 11(2) says: "This card shall be accepted by the appropriate authorities as evidence of identity and appointment." In other words, each member of staff will be provided with some form of identification, which is not doubt very useful. But to what extent does the exemption on tax go further than the initial visit? Does the card bestow other privileges? Otherwise, why is it necessary to have proof of identity of a continuing character? Can members of the staff claim privileges other than those related to the initial allowance or those accorded to a diplomatic agent on a matter of exchange control? I hope that I have not been too pernickety about these matters. I speak as an hon. Member appointed to the Committee to examine statutory instruments, and that is the duty of the Committee. I finish with a question and a warning. As I understand it, the status of the treaty and the schools is related to the status of the European Community. It would be unfortunate if at any stage the question of power and vires became acute. We may have surmounted it on this occasion. There are a number of international schools in this country, and I am sure that we would all applaud that fact in principle, as long as they were run well. It costs more if one has multilingual teaching or more than one examination system such as the Baccalaureat as well as our own Higher Schools, and they need greater resources. But it would be a pity if servants of the European Community were able demonstrably to demand and require and be provided with by international treaty more and greater resources and privileges than, say, the members of our own Civil Service. I know too well, as I am sure the Minister 9 does, the difficulties of peripatetic Foreign Office officials, who have considerable problems educating their children and the Select Committee on Foreign and Commonwealth Affairs showed great sympathy with them. Teachers in international schools—I am not talking about the parents—do not have such peripatetic responsibilities. If they go to Culham or Brussels or elsewhere, they stay there as a teacher would in any international school, and I am not sure whether they should be accorded greater privileges simply by virtue of that fact. If they were, we might be accused of getting into a similar situation to that in eastern Europe, which is now unfortunately rapidly dissolving because its functionaries enjoyed similar privileges. The Minister may wish to reply to some of my questions later, but I hope that he will agree that most of them are pertinent to the procedures of the Committee and the way in which we properly examine public documents before they are agreed to. I hope that some of them will not become controversial in the future, although I think that I have shown why some of them might.

10.54 a.m.

Mr. Sainsbury: The hon. Member for Newham, South (Mr. Spearing) says that he is not a volunteer. I should be interested to know how many more questions he would have asked had he been a volunteer. He asked first about a debate that was held ten years ago, and I do not know the answer. I recall that about ten years ago I found myself sitting for a brief period with the hon. Gentleman on the Committee considering European statutory instruments, and I remember that he was adept then at detailed scrutiny, which is a proper role of the House. If I can find out anything about a debate on this matter ten years ago, I shall write to him. I shall try to answer the remainder of his questions and those of the hon. Member for Swansea, East (Mr. Anderson). The cost of the premises are with the United Kingdom Government. But I want to make clear that this is the only European school in the United Kingdom. There is a difference between a European school, which is a Community activity, and an international school, which may arise under all sorts of stimuli. One of the best known is the French Lycde in London, which one does not have to be French to attend. We are discussing a Community school, a school associated with the people who work at the Community's institutions located here in Britain and, I think, much to the advantage of Britain. To answer several of the questions that the hon. Member for Newham, South raised, the objective is that those working as teachers at this school—which is a Community school, not just an international school—are treated like others working for the Commission. They are like international civil servants and liable, as I said in my opening remarks, to be returned to their own countries or to be sent to work for the Commission elsewhere, perhaps in one of the other Community schools. That is why they are subject to Community tax, which is the way that they 10 contribute to the resources of the Community. The hon. Member for Newham, South asked who decided whether someone was a permanent resident. I can confirm that it is not the governors. The governors need to notify us, the United Kingdom Government, so that the decision can then be made by the Government who is eligible for the privileges that go with being a member of staff of the school. In practice, I do not think that the privileges that we are discussing will make much difference. The school, being a charitable institution anyhow, was not paying much tax, and extra statutory reliefs were being allowed to people working at the school. The hon. Members for Swansea, East and for Newham, South both raised the important question why we were making the order now. The headquarters agreement could not be finalised until the tax treatment to be accorded to the European supplements—the supplement to the pay under the Commission arrangements—had been established, and the European Court did not rule on the case of Hurd v. Jones until 1986. Further time was then needed to decide how precisely that judgment was to be satisfied and to settle the terms of the agreement and the legal route by which it was to be implemented.

Mr. Anderson: The Minister will recognise that three years have now elapsed since the ruling of the European Court.

Mr. Sainsbury: I do not know exactly when in 1986.

Mr. Anderson: January 1986, which means that four years have elapsed.

Mr. Sainsbury: Unless it was very early indeed in 1986, it would not have been the full four years. I agree that it has taken a long time.

Mr. Anderson: It was 15 January 1986.

Mr. Sainsbury: The hon. Gentleman is therefore right in saying a little over four years by the time we come to the Committee, but he will be aware that, when complex legal and tax matters come together, they are liable to multiply the time taken to resolve the way forward. The central point is that it was resolving how the case of Hurd v. Jones was to be implemented that put the school on the proper basis as a Community institution and the teachers as employees of the Community. That is the background against which these orders have been drafted. I think that I am right in saying that the hon. Members for Swansea, East and Newham, South are both saying that they agree to the draft order. If on detailed examination of the records we find that there are other questions that I have not answered—certainly about the debate ten years ago—I shall write to them.

11 a.m.

Mr. Spearing: I thank the Minister for his reply. I think that his last point about the debate ten years ago is probably covered by the finding of the European Court. I suspect that it had to go round that route and 11 has returned ten years later, or thereabouts, making the previous order either void or unnecesary. I suspect that this is, in effect, a regularising measure. The Minister referred to our assent. In the circumstances, I do not think that I shall call "No" to any Question that you put, Sir Anthony, although in other circumstances I might have been inclined to do so. It is perhaps more diplomatic to say that I shall not dissent at this time. The Minister referred to other schools. Yes, there is the Lycde francaise and so on, which is, as it were, one national school, but I suspect that there are a number of international schools. I am thinking of St. Donats, the Atlantic college and possibly others, where multilingual and multi-qualification teaching is provided, and while I understand what the hon. Gentleman said about these teachers being international civil servants in the eyes of the Community, I put down a marker about whether that is a necessity. The head teacher may 12 perhaps have that status, but should it extend to those employed to teach? Their function, as I have said, is very different from that of an international civil servant in a multinational organisation. They are people teaching in a school, who could have been teaching in a secondary school down the road or in an Oxford college the previous week.

Question put and agreed to.

Resolved, "That the Committee has considered the draft European Communities (Privileges of the European School) Order 1989."


Resolved "That the Committee has considered the draft European Communities (Definition of Treaties) (European School) Order 1989."

Committee rose at five minutes past Eleven o'clock.


Meyer, Sir Anthony (Chairman)

Anderson, Mr.

Bell, Mr.

Carlisle, Mr. Kenneth

Fishburn, Mr.

Knight, Dame Jill

Lord, Mr.

Marshall, Mr. Michael

Mitchell, Sir David

Porter, Mr. Barry

Sainsbury, Mr.

Spearing, Mr.