21:59 - The Committee divided: - Ayes: 220 / Noes: 329 - Question accordingly negatived.
22:15 - The Committee divided: - Ayes: 239 / Noes: 310 - Question accordingly negatived.
Mr David
I have argued consistently that that was not the case, but the new Committee, drawn from both Houses, would consider all changes that occur inside the European Union and that have a direct impact on the United Kingdom. We can discuss what is significant and what is not, but my point is that the proposed Committee would come to a considered view on what was important and what should warrant a referendum.
I emphasise this point because we are concerned about the extent to which the Government will have discretion to decide what goes to a referendum. We are concerned because we fear that the Government’s rhetoric does not match the reality of their Bill. I am sure that the Minister is absolutely sincere in his intention to give the electorate the maximum ability to vote on a range of European minutiae, but let us just suppose that the Bill is smoke and mirrors. The nature of the proposals before us could turn out to be more apparent than real.
By common agreement, the Bill is one of the most complicated pieces of legislation to come before the House of Commons for many years. As we all know, in legislation the devil is always in the detail, and this Bill contains one heck of a lot of detail. Some Members, including those on the European Scrutiny Committee, have suggested that the Government may be looking for wriggle room. In particular, there has been reference to clause 3(4), the so-called “significance” subsection, which allows the Government to avoid a referendum if they believe that certain EU sanctions or obligations are insignificant. If I were a Government Member, I should consider that very ominous, as little detail is provided.
The Minister for Europe (Mr David Lidington)
Given the concerns that the hon. Gentleman has just expressed, will he please explain why the Opposition amendments, and in particular new clause 9, would extend the significance test so that the Committee that he proposes would consider whether a decision to join the euro, or a decision to scrap British border controls, was significant enough to warrant a referendum at all?
Mr Jenkin
I am grateful to my hon. Friend.
I hear the plea of my hon. Friend the Member for Devizes (Claire Perry), but I believe that there is a constant danger of us succumbing to wishful thinking. The problem is that this is not the “thus far and no further” Bill; it is the “locking the stable door after the horse has bolted” Bill. What is more, whatever other horses there may be in the stable, there are sufficient holes in the door for those horses to squeeze through, if it is convenient for the Executive to allow it to happen. That is what we will see with the treaty coming down the track for EU fiscal union. The Bill will not increase the happiness of the British people about our present terms of EU membership. The Bill fails to address those terms, but they will have to be addressed at some stage in the future.
I refuse to sign a referendum pledge, as I was recently asked to do, saying, “Let’s have an in-or-out referendum”. That is not the way to conduct this debate; the way to conduct it is for the Government to set out their national interests and negotiate robustly for them in the European Union, rather than to continue appeasing the system to avoid a row. I even accept that we may need to do that for a period, while we are in such a difficult fiscal position, but the moment that the EU is asking for treaty changes for which it needs our consent is the moment we should be asking for concessions in return. We certainly should not carry on transferring competencies to the EU without a referendum, as is provided for in the Bill.
Mr Lidington
We have had a robust debate, and I want to start by thanking all right hon. and hon. Members on both sides of the Committee who have taken part, whether through speeches or the numerous interventions.
I want to start with a point on which there was agreement, certainly on the Government Benches. Wherever people stand within the coalition or the spectrum of opinion on Europe in the Conservative party alone, there is agreement that the European Union has developed with too little democratic control and without adequate consent being given by the British people. Indeed, the Lisbon treaty was the first time that the United Kingdom agreed to, and then ratified, a European Union treaty that was not even included in the general election manifesto of the winning party at the previous election.
My hon. Friends the Members for Daventry (Chris Heaton-Harris), for Grantham and Stamford (Nick Boles) and for Camborne and Redruth (George Eustice) said that we needed to change what the history of the British political world’s handling of European business had done, which is to undermine support for our membership of the European Union and the idea that what British Ministers do in European Union institutions on behalf of the United Kingdom carries democratic consent. We need to restore a sense of confidence among the public in how British Ministers take decisions on Europe on their behalf, and that is what the Bill seeks to do. We want to ensure that the British people are never again denied their say over the transfer of new competences and powers from this country to the institutions of the European Union.
I should say in parenthesis to my hon. Friend the Member for Cheltenham (Martin Horwood) that although the word “transfer” in the explanatory notes is a reasonable use of layman’s language, I am sure that he will have noted that in the Bill itself we use the term “confer”. We talk about exclusive, shared, co-ordinating and supplementing competences, which are precisely the terms used in the European treaties.
However, my hon. Friend was right to say that this Bill should not be our only means of addressing the democratic deficit in the way that European decisions are made. He was right to talk about the importance of strengthening our systems of parliamentary scrutiny. I am looking forward to seeing how the scrutiny Committees in the House of Commons and the House of Lords use the opportunities presented by the new yellow and orange-card system. I know that my hon. Friend the Member for Stone (Mr Cash) has been in regular contact with his counterpart committees in a number of other EU capitals. It is important that that network of contacts between the European Union scrutiny committees in each of the 27 member states continues to develop.
I am sure that my hon. Friend the Member for Cheltenham will also have seen the written ministerial statement that I made to the House last Thursday. Although it dealt primarily with issues concerning justice and home affairs measures, it also stated that the Government now wanted to explore—together with Parliament, and therefore with the two scrutiny Committees in particular—ways in which, right across the piece, we can strengthen scrutiny and accountability to the Houses of Parliament for what we as a Government do in Europe on behalf of this country.
Mr Cash
I very much acknowledge the sentiment that my right hon. Friend is expressing, but I am sure that he will understand when I say that listening is not the same as actually agreeing, and that there are circumstances where I would have expected him to be a little more acquiescent in relation to some of the arguments that we have put forward.
Mr Lidington
In those conversations about parliamentary scrutiny, which I intend should begin as soon as possible, I hope that I can find complete agreement with my hon. Friend. However, he will know that if we are talking about arrangements that will govern how both Houses of Parliament deal with European business and the process of scrutiny, we ought to be striving towards a measure that can command broad support in both Houses, and across all the political parties represented therein.
The Bill is a radical piece of legislation to improve how we handle European business. As my hon. Friend the Member for New Forest West (Mr Swayne) pointed out, in a characteristically vigorous intervention, had the legislation been in force at the time, the treaties of Lisbon, Amsterdam, Nice and Maastricht would all have required a referendum before they could have been finally ratified.
The powers in the Bill include a referendum lock on treaty changes or decisions that transfer powers from the United Kingdom to the European Union. That is the case even if the measures used to transfer those competences or powers are the extensive self-amending provisions introduced by the treaty of Lisbon. The powers include requiring that important decisions—even if they do not transfer power or competence—are still in every case approved by an Act of Parliament. I want to put this beyond any doubt: the Bill will mean that any treaty change at all, whether using the ordinary procedure for amending a treaty or the simplified revision procedure, will have to be approved by primary legislation.
This is a vitally needed improvement. Under the European Union (Amendment) Act 2008, Parliament’s control over the simplified revision procedure and other key ratchets is limited to a vote on a Government motion. That is the case even if the simplified treaty changes or ratchet clauses are proposed to abolish something as important as a national veto over foreign policy.
Ms Gisela Stuart
There is something that I genuinely do not understand after reading through the notes. When the Government list all the things that will be covered by the ratchet clauses, is that an exhaustive list? What is the logic behind the list?
Mr Lidington
We shall have a debate on the ratchet clauses later this week when we deal with amendments to those parts of the Bill. I will be happy to go into more detail then, and I hope the hon. Lady will forgive me if I do not answer her question now.
We are giving Parliament and the public the opportunity to hold Ministers to account by spelling out the criteria needed to make a decision on whether the power or competence is transferred, and requiring Ministers to make a statement giving the reasons for their decision. Parliament can challenge this, and, if it so wishes during the legislative process, add further conditions of its own. If the public are dissatisfied with the Minister’s judgment—I stress it will be the Minister’s judgment, not Parliament’s—they will be able to use judicial review to check it further.
Mr Lidington
My hon. Friend is tempting me to go way beyond the scope of the Bill. At the moment, any legal aid application would be subject to the normal rules that apply to legal aid, which are the responsibility of the Ministry of Justice, and not of the Foreign and Commonwealth Office.
The Bill comprehensively goes through the nuts and bolts of the treaties to identify how power and competence could be shifted from this country to the European Union. We have deliberately and determinedly taken steps to limit the wriggle room for any Government or Minister in this regard. We are committed to ensuring, as best we can, that the Bill is watertight, with no omissions or loopholes that would allow a future Government to avoid giving either Parliament or the people the control that they deserve.
Let me spell out in a little more detail how we plan to achieve this. Following the agreement of any future treaty change under the ordinary revision procedure—that is, the process involving an intergovernmental conference and, probably, since the Lisbon treaty, a convention of the European and national Parliaments as well as of national Governments—three conditions must be fulfilled before the United Kingdom could ratify such a treaty change. First, the Minister must lay a statement before Parliament. That statement would give the Minister’s decision as to whether the proposed treaty change would involve one or more of the criteria in clause 4 of the Bill, and therefore whether a referendum would be required or not. A change that would transfer power or competence from this country to the EU would be subject to a referendum of the British people.
If the proposal were considered by the Minister not to involve one or more of the criteria in clause 4, it would be considered to meet the exemption condition—in other words, it would not require a referendum to be held. The important point is this: the Minister cannot simply conjure his decision out of the air. He has to obey the law. He has to follow the criteria set out in the Bill, especially those in clause 4 and schedule 1. His statement will have to demonstrate how he has applied those criteria in coming to his decision. He will simply not have the scope in law to make some arbitrary decision in defiance of what is spelled out in the legislation.
Mr Lidington
The points are not vague. I invite the hon. Gentleman to have another look at clause 4 and schedule 1, both of which define in clear terms the various ways in which competences could, within the terms set out in the treaties, be enlarged, transferred or expanded, while schedule 1 sets out in detail a list of national vetoes, the removal of which would automatically trigger a referendum. I gently suggest that the hon. Gentleman studies the Bill a little bit harder.
Mr Cash
Does the Minister not accept that it would be a monumental change if proposals relating to fiscal union, social union or employment union were to be incorporated in a treaty between the UK and other member states—excluding the UK, but none the less having a juggernaut impact upon us? In those circumstances, is that material not so important that we would expect to get a referendum—as would the British people?
Mr Lidington
My hon. Friend is jumping several bridges in assuming that what might be proposed in those hypothetical circumstances would be an amendment of the European Union treaties rather than a separate intergovernmental treaty involving the member countries of the eurozone—and perhaps some others—who wished to participate in the sort of closer economic union that my hon. Friend described and fears.
I hope to say more about this later, but the Bill is based on a very clear principle agreed within the coalition —that the referendum lock should apply where there is a transfer of competence or of power from the United Kingdom to the institutions of the European Union. That is the defining criterion. The different categories of exemption apply where powers and competences are not being transferred from this country. That is the reason for the distinction set out in the Bill. It is not an arbitrary decision, but one based on a very clear principle.
Ms Stuart
I am still trying to understand what the Minister regards as significant. The monetary union is not a debt union at the moment, but it is about to become a debt union. We have an opt-out for monetary union. If the monetary union becomes a debt union, and thus far more significant, surely that is important to us—even though we have an opt-out.
Mr Lidington
If the measures in respect of greater economic union or perhaps fiscal union or shared responsibility for debts were to take the form of a European Union amendment treaty and involved the transfer of competences or powers from this country to the EU, the referendum lock would be triggered. If the eurozone countries choose to do their own thing and have their own intergovernmental treaty, which they can do quite distinct from any move to amend either the treaty on European Union or the treaty on the functioning of the European Union, we would not have a say—not if they chose to go down that route.
Mr Dorrell
Were my right hon. Friend a Minister in one of those European Union countries that might theoretically be considering a fiscal union, and were he offered the prospect of his decisions on behalf of his country being subject to a referendum in the United Kingdom—a country that would not be part of that union—which of the two routes does he think that he might take?
Mr Lidington
By implication, my right hon. Friend has answered his own question. There is a question about national sovereignty and democratic accountability. We would look askance were another EU member to say that some protocol that dealt with the United Kingdom alone should be subject to a referendum in their country. We should be pretty cautious before we set ourselves up and argue that we will insist that we hold a referendum here on a treaty proposal that does not have an impact on the governance of this country, that does not involve the transfer of new powers away from this country, and that leaves the powers of our Parliament and people completely as they are at present.
Mr Lidington
I will make some progress, because many Members have spoken and made different points, which I want to answer.
As the Committee knows, a new system for treaty change was introduced by Lisbon: the simplified revision procedure in articles 48(6) and (7) of the treaty on European Union. That enables the European Council to amend those sections of the treaty on the functioning of the European Union that concern the single market, justice and home affairs and other internal policies. The Bill ensures that the method of treaty change, governed by the simplified revision procedure, is subject to exactly the same accountability and scrutiny as the ordinary revision procedure. The only difference is the significance test, which I will cover in detail later. In passing, I should say that article 48(7) decisions about moving from unanimity to qualified majority voting are caught by clause 6(4)(b) of the Bill and require both an Act and a referendum in accordance with schedule 1.
My hon. Friend the Member for Hertsmere (Mr Clappison) was right when he said that article 48(6) says that the simplified revision procedure cannot be used to enlarge the competences of the European Union. Although that is indeed written in the treaty, we have drafted the Bill to require British Ministers to examine even an article 48(6) proposal, to see whether, despite that treaty language, we would judge it to involve an extension of competence. If the British Government’s judgment was that it did, the referendum lock would apply in those circumstances.
Let me turn to the numerous amendments, many of which severely weaken the provisions of the Bill, either by watering them down so that they are toothless, or by extending them considerably beyond what the coalition programme for government promised. Amendments 67 and 68 would remove the referendum lock altogether, and require only an Act of Parliament to approve a transfer of power or competence from the United Kingdom to the European Union.
Martin Horwood
That is not an entirely accurate representation of amendments 67 and 68, which refer only to changes under the simplified revision procedure.
Mr Lidington
I was going to make the qualification that the amendment applies to measures within the simplified, not the ordinary, revision procedure. I think that that denies the public the chance to have their say on what are, ultimately, important decisions.
My hon. Friend the Member for Cheltenham asked a couple of detailed questions. He asked, for example, whether a technical change to allow for emergency flood relief, agreed to by means of the simplified revision procedure, would be subject to a referendum. As he will know, the so-called enabling clause, article 352, would be available in the event of a need to take urgent action within the European Union’s existing competences if that action were taken to attain the EU’s objectives and if there were no explicit provision to authorise that in the EU treaties, and emergency relief and international development are indeed competences that the European Union shares with member states. Clause 8 of the Bill provides for enhanced parliamentary controls prior to any agreement on the use of article 352.
I disagree with the hon. Gentleman on some of what he termed technical changes. I firmly believe that a referendum should be held on any change that would transfer competence or substantive power from this country to the EU permanently.
The hon. Gentleman also asked how many article 48(6) changes were currently being considered. Only one is being considered at present, the one that was promoted by the German Government and agreed at the December European Council. It affects only the eurozone, and as it does not transfer power or competence from this country to the European Union, there would be no need for a referendum.
Amendments 1 to 5 and amendment 7 would ensure that every treaty change required the consent of the British people in a referendum, even if it transferred no further competence or power from this country to Brussels. I suspect that this was not the authors’ intention, but even a treaty change that would repatriate power from the European Union to the United Kingdom would require a referendum in this country before it could be accepted. A treaty change to remove the United Kingdom’s veto over decisions to amend the number of advocates-general working in the European Court of Justice would require a referendum, as would a treaty change to allow Denmark to participate in justice and home affairs measures. The addition of 18 new MEPs before 2014—when they take their seats automatically anyway—for which the Bill provides would also require a referendum.
The issue is this: what is a suitable matter for a referendum? I believe that decisions that change who decides—decisions that move control over an area of policy from the United Kingdom to the EU—should require the consent of the British people; but not every treaty does that. Should a technical change such as the temporary alteration in the number of MEPs require a referendum? If Iceland decided to join the EU, should that require a national referendum? I think that that argument is very hard to justify, and might well discredit the principle of referendums from the point of view of voters. I also see no justification for referendums on treaty changes that do not apply to the United Kingdom. As I said earlier, in democratic terms, those are ultimately decisions for the countries to which the treaties apply, and not for us. No transfer of competence or of power from this country to the EU is associated with such changes.
Ms Stuart
The Minister is simply wrong. If Lisbon caps the total number of MEPs, if the number of MEPs is based on the population, if there is a minimum number of MEPs with “bookends”, and if a country such as Turkey makes a change, the number of MEPs in this country will be significantly lower and our voice will be lower. That constitutes a change of power, and it is no good denying it.
Mr Lidington
If we followed the hon. Lady’s logic, a referendum would be required in this country for any change whatsoever in the distribution of seats in either the European Parliament or the Council of Ministers.
By definition, a referendum in this country would also be required on any accession to the European Union, not just that of Turkey, because every time a new member state joined the European Union they would have a certain weighted share of votes in the Council of Ministers and a certain number of MEPs. I do not think that she is seriously arguing that.
Mr Clappison
The Minister is making a persuasive argument in a courteous way, but I must take him up on this point about the accession treaty. I believe that eight members joined at the same time and what took place then was in many respects a shambles, which would have been avoided by better scrutiny and if the question of a referendum had been on the table.
Mr Lidington
I am going to stick to my figure of 10. It does not make much difference to the principle of the argument, but I believe my figure is accurate. My hon. Friend rightly made a point about problems after some of those accessions, but that makes the case for member states to insist on the rigorous application of the accession criteria before accession takes place, rather than allowing countries in before they are fully ready and equipped and then arguing about it afterwards.
Keith Vaz (Leicester East) (Lab)
The Minister is absolutely right on this point and my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) is wrong, because in the case in question the enlargement of the European Union passed through the House unanimously. The only occasion when a matter such as enlargement should go to the British people is when the House decides that it should go to them.
Mr Lidington
I am grateful to the right hon. Gentleman for that.
I wish now to discuss the significance test. New clause 9 would submit all referendum criteria, all treaty changes and all uses of article 48(6) to a significance test, but even the narrow use of the significance test, as set out in the Bill, has been the subject of a great deal of concern, so I wish to be clear about what it means for the Bill as it stands and to explain why it is needed. The significance test can be used only in very specific circumstances. Clause 4 identifies 13 instances when a treaty change transferring competence or power to the EU would attract a referendum. The significance test applies not to 13, but to two of those instances. Moreover, it can be used only when a decision under article 48(6) is being taken. It cannot be used for treaty amendments adopted under the ordinary revision procedure.
Article 48(6) decisions could seek to confer on a European institution a power to require this country to act in a particular way, or to impose sanctions on the UK for our failure to act in a particular way. Although that could be done only within existing areas of competence, and not within new ones, it would enable EU institutions or bodies to use those existing competences in a different way. A future proposal under article 48(6) to do either of these things would, as a matter of general principle, require a referendum to be held.
Let me give the Committee a hypothetical example. There might be a proposal to allow an EU agency to impose sanctions on a national regulator or to act in a way that compelled British businesses to do something that would increase significantly the burdens on British business and harm the competitiveness of this country. That sort of decision would, in my view, be classed as significant and should attract the referendum lock, but there might equally be instances in the future—my hon. Friend the Member for Cheltenham was right—where article 48(6) might be used to give a new power to a body in an area that is not significant to this country. For example, it might require a national regulator or some other British organisation to provide an EU agency with a set of statistics annually.
Let us consider, for example, the European Maritime Safety Agency. It was set up to provide member states of the Commission with technical and scientific assistance in the field of maritime safety and the prevention of pollution by ships. If, in the future, it was decided to change the treaty so that that agency could issue binding directions to national regulators and that that would be a permanent cession of authority and powers, that would be a significant power within the meaning of clause 4(1)(i) or (j). If, however, the proposal was to change the treaty to allow the agency to require national regulators to provide it with an annual digest of statistics, I do not think that that would be a significant power under the Bill. That is why we have provided for the significance test.
Amendments 3 and 5 would remove the significance condition from the Bill, so it would in practice require a national referendum on such things as the provision of statistics. I think that most people in this country would accept that such technical changes should be left to the Government, under the scrutiny of Parliament, who of course would still have to authorise the minor treaty change through primary legislation—a formal Act of Parliament subject to detailed scrutiny and capable of amendment in either House. In all those instances the proposal would need to be thoroughly analysed and we have ensured that any use of the significance test would be subject to strong scrutiny and accountability.
When he spoke about amendment 11, my hon. Friend the Member for Hertsmere took a different approach to parliamentary scrutiny. His amendment would require a Minister to seek parliamentary approval not to hold a referendum on the basis of the significance test, through both Houses agreeing to a motion without amendment. I have a great deal of sympathy for where my hon. Friend is coming from and I do not for one moment challenge his passionate commitment to the duty of Parliament to hold Ministers to account or his wish to see the powers of Parliament over European Union business and ministerial decisions on Europe strengthened and improved. If I felt that his amendment would secure that objective better than the provisions in the Bill, I would be with him on the detail. However, I want to explain why I do not believe that it does that.
First, when a Minister makes the statement required by clause 5 on whether a proposed amendment requires a referendum, they must give reasons why the proposed change does or does not meet the significance test. Those reasons will need to refer to the criteria set out in clause 4, so their reasoning will need to be clearly set out. There is a first measure of protection already in the Bill.
Secondly, the Bill ensures that every proposed treaty change, regardless of whether the significance test applies, would require the approval of Parliament through primary legislation. That would allow sufficient time for Parliament to scrutinise the use of the test to legislate for a referendum if it deemed such a provision necessary.
Thirdly, there is the risk that having a separate debate on significance in the way that amendment 11 proposes could weaken Parliament’s scrutiny of the primary legislation that the Bill requires. That point was made by my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) in an intervention. In view of the dynamic of the House of Commons, it would be tempting for a Government who wanted to rush through a particular treaty change to schedule an early debate on the motion not to require a referendum and then, when the ratification Bill came forward and Members of Parliament had had the opportunity to look at the detail, perhaps consider the evidence of a Select Committee, and listen to what outside experts had to say on the matter, they would find their Whips coming up and saying, “We’ve already voted on this. You personally went through our Lobby to support the proposition that a referendum was not required. How can you change your mind and try to insert the requirement for a referendum at this stage?”
The unintended consequence of amendment 11 could be to strengthen the hand of the business managers and to weaken the independence of judgment that Members would be able to exercise under the requirement for primary legislation laid out in the Bill. Amendment 11 would also weaken any prospect of a successful judicial review. Judicial review is not a panacea, but the House should see it as a significant step to give the citizen the right to challenge a Minister’s decision, where that decision is irrational or unreasonable.
There are two important distinctions between what we are proposing here and what we saw in the Wheeler case, to which a number of Members referred in the debate. First, the Minister has to give reasons, and give reasons by reference to the Bill. That opens up the possibility that a court might wish to consider a challenge to the reasonableness of the Minister’s decision. Secondly, whereas in Mr Wheeler’s case the Court was invited to judge the wording of the constitutional treaty against the wording of the treaty of Lisbon and declined to do so, in this case we are talking about a possible invitation to the Court to judge the actions and decision of a Government Minister in his Executive capacity against the statutory duties on that Minister set out in the language of the Bill. Those are important distinctions.
Mr Lidington
No. I want to do justice to the amendments tabled by the Opposition. They have been presented as increasing the role of Parliament. In fact, they do the reverse. The effect of the Opposition amendments, especially new clause 9, is to subject every referendum criterion to a significance test. If accepted, the Opposition’s amendments would leave it open as to whether a move to join the euro was significant, a move to give new competences to the European Union was significant, a move to give up our border controls and take part entirely in a European immigration system was significant, or a move to join a European public prosecutor system was significant.
The hon. Member for Caerphilly (Mr David) is trying to persuade us that he is offering new powers to Parliament, when it is clear to anybody who studies the wording of his amendments and his new clause that the intentions are the reverse. The Opposition’s amendments would drive a coach and horses through the Bill. They would deny both Parliament and the people the additional powers and controls which I believe Parliament and people in this country want to see. The Bill is designed to be tough. As academic experts have said when giving evidence to the European Scrutiny Committee, it delivers the referendum lock that we have promised. I will not yield by weakening the Bill in the way that the Opposition propose.
Question put, That the amendment be made.