EU: Recent Developments

Lord Kerr of Kinlochard Excerpts

Thursday 16th February 2012 Lords Chamber

[Lord Kerr of Kinlochard]

The Minister ranged widely in his elegant opening remarks but the debate has tended to concentrate on the eurozone crisis. It benefits from the report of the Select Committee under the noble Lord, Lord Roper, to which the noble Lord, Lord Hamilton, paid a sort of tribute. Like the noble Lord, Lord Hamilton, I sit on Sub-Committee A and, like him, I also wish to pay a tribute to the noble Lord, Lord Harrison, for his chairmanship. The noble Lord, Lord Hamilton, spoke of the markets as the elephant in the room. As I said, I serve on Sub-Committee A with the noble Lord: I can recognise an elephant in the room.

I want to talk about the new treaty to be signed on 1 March and to consider it in a totally deadpan, analytical style from four aspects: constitutional, legal, economic and political. I start with the economic aspect. I find myself in the awkward position of agreeing with the noble Lords, Lord Flight and Lord Hamilton, and the noble Lord, Lord Lamont, who has fled to avoid hearing me saying this. They are entirely correct: the economic significance of the new treaty is virtually nil. I think that it is irrelevant, or nearly irrelevant, to the crisis we face. It is a new version of the stability and growth pact—this time we have the stability and no-growth pact, which is even more Germanic. The eurozone needs: greater growth and competitiveness, born of supply-side reform and the deepening of the single market of 27; the correction of current account imbalances; the further strengthening of the banking system; the resolution of the Greek crisis one way or the other; and more fire-power for the EFSF and the ESM to fight the contagion risk, though I would rate that risk much lower than do the noble Lords, Lord Hamilton and Lord Flight.

The treaty is narrowly drawn and addresses none of these issues. Moreover, the new mechanisms in the treaty add relatively little to those that already exist at 27, or are being considered at 27 under Article 136, which permit us to take part in the negotiation of measures applicable to the eurozone and would have been—but for the line we took—for us precisely the ideal vehicle for the new formulations that now find their place in the separate treaty. However, the principal economic significance—perhaps the only economic significance—of these formulations is indirect: promises of future southern virtue, written in treaty form, in blood, and into national constitutions, may make it easier for northern electorates to contemplate greater generosity. That, presumably, is Chancellor Merkel’s calculation. I do not think this treaty matters much in straightforward economic terms. It probably does more harm than good. However, in institutional terms it matters a very great deal.

The key innovation, which is noted en passant at paragraph 77 of the Select Committee report, is that the treaty will come into force before all its signatories have ratified it. Once the 12th of the 25 signatories ratifies it, the treaty applies among those 12 and, when others ratify, it applies also to them. There is no EU precedent for that. Up to now the rule has been that the convoy moves at the speed of the slowest ship and a single failure to ratify sinks a treaty for all signatories. One could now envisage a member state—in this case hypothetically an Ireland unable to win a referendum, or a Hollande-led France talking of a renegotiation—stuck in a limbo, unwilling or unable to ratify but equally unable to prevent the convoy sailing on. I note that access to support from the ESM will depend on ratification. I think that tells us the answer to the question asked by the noble Lord, Lord King: how many will actually ratify? I would not bet on there being a referendum in Ireland.

The serious point, though, is that in the European convention in 2002-03, some argued that the constitutional treaty we were then drafting should have similar entry-into-force provisions, as the noble Lord, Lord Maclennan, will remember. However, I cannot recall that any single member-state Government supported them—now 25 have. An important precedent has been set and we in this House, with our EU referendum Bill debates fresh in our memories, would do will to reflect on it. As the noble Lord, Lord Howell, said of a different outcome, this really could profoundly change the nature of the EU. I am not sure that those who share his views on European integration have been firing at quite the right targets. I do not believe that this would have happened—that this would have been the entry-into-force provision—if this had been an EU treaty. In other words, this provision is here as a consequence of the position we took. Careful reflection is needed on whether that is a good or a bad thing.

I have a further point about the legal issues. None is as significant as the constitutional point that I have been addressing, but the treaty is a bit of a mess in legal terms, and that too is largely of our making. It is good that the Commission and the ECJ are allowed to do their job, not least because they are the best defence for us against eurozone countries infringing the prerogatives of the Union of 27. However, the various divergences and overlaps of existing provisions would have been better avoided. So I agree with the Select Committee’s comments at paragraph 112 and 129 of its report that in the interests of all member states, including the United Kingdom, the folding of the new provisions into the main EU treaty framework would be desirable. I agree, and when that desirable outcome is achieved, all the legal issues that will worry the lawyers for the next couple of years will automatically fall away.

For the life of me, having read all six draft versions of the treaty, I really do not understand at all why we could not sign up to it. It contains no provisions that could damage UK interests. The provisions apply only to eurozone countries and to any others among the 25 signatories that choose to apply them. For us, there is no transfer of sovereignty involved, and there would therefore be no question of a referendum requirement. The UK negotiators who were involved in the negotiations did very well. I can see improvements, text to text. I see no sign that they were ever obliged to seek any of the mysterious “safeguards” that were sprung on the European Council in the middle of the night on 9 December and have been kept under wraps ever since, including today. That seems wise. I cannot for the life of me see any objective reason why we should not sign the treaty, but I am being entirely analytical and will not therefore press the point.

My final point is political. Does our self-exclusion matter? I fear so. I have argued previously in this House that leaving an empty chair is always unwise. The noble Lord, Lord Radice, must be right to say that it is easier to defend your interests if you are there. When the treaty becomes operational, our officials who helped in the drafting have to leave the room. Most of their colleagues from non-eurozone member states will be able to stick around. Are we sure that the Poles, the Danes and the Swedes have got this wrong and we have got this right? Why are we sure that they have got it wrong? When this group meets at European Council—Heads of Government—level, 25 Governments will be represented. The others will be able to influence the thinking of the eurozone and what it decides to do. Why do we not want to do that? For all this talk of a veto, all we vetoed was our own attendance. I cannot explain that. I shall have to ask our Czech friends—Kafka was a Czech, after all, so they may know.

I conclude with a personal reflection. I think I know what went wrong on the night of 9 December. We suddenly found ourselves without allies. This should never happen. There are alliances to be had all the time on every issue, bar one, in Brussels. Alliances overlap, they wax, they wane, they need continual cultivation, friends need to have the perception that they are being consulted—perhaps they really are being consulted—surprises need to be avoided, advice needs to be sought and taken, and other people’s priorities need to be understood. That is what usually happens. In this negotiation, Mrs Merkel was our natural ally, until we contrived to drive her into the arms of the French. When we got into a hole, the Dutch and the Swedes rode to our rescue and tried to help us out, until we spurned their help. There are natural alliances all the time—the free trade alliance; the northern liberal alliance; the blue water alliance with us, the French and the Spanish; and the budget disciplinarian alliance with the Germans, the Dutch and us in the lead. To find oneself isolated in Brussels is extraordinary. There is a huge alliance over there of those who believe that the EU needs to retain one great big global financial centre on a par with Tokyo and New York. These people will fight for the interests of London, because it is the only plausible candidate to play that part.

We do best in Brussels for the City when we advance the EU arguments for the City. That is what we do, usually, and I agree with the noble Lord, Lord Mandelson: the Chancellor of the Exchequer is clearly good at this. But it is not what we do back home. Fleet Street wants to hear about a Manichaean struggle, a gallant, lonely, Churchillian defiance of overwhelming odds. Everyone else is a monolithic bloc opposed to us. We stand alone. We triumph, or we veto.

It is not really like that over there. It would help us now to rebuild the alliances that we need if we could refrain from pleasing Fleet Street by shouting from the sidelines. I repeat the points made by the noble Lords, Lord Newby and Lord Monks. The raucous shouting from the stand to those who are engaged in a big fight to save their currency does not readily make friends and influence people. He who refuses to pay the piper should be cautious about calling the tune. Now I will follow President Sarkozy's sensible advice to the Prime Minister.

Iran

Lord Kerr of Kinlochard Excerpts

Tuesday 24th January 2012 Lords Chamber

[Lord Howell of Guildford]

We cannot yet to talk in terms of undertakings, but there have been indications. Obviously it is up to Saudi Arabia and other major oil producers in the region, such as Kuwait and the United Arab Emirates, to undertake to make up the shortfall. The indications are that this will be possible but we are not yet at the stage where I can say that undertakings have been officially agreed; they have not.

There is also a problem of matching the quality of oil concerned. As the noble Baroness knows, although the Iranian oil that Greece, for instance, has been heavily reliant on is slightly sour, the make-up oil from Saudi Arabia would be considerably sourer and would carry a much heavier sulphur content as well, so there would be difficulties for refiners. The usual complexities that arise when one moves oil flows around inside the oil market would occur, of the kind that I have just described. Therefore, I cannot say that there is a neat package of additional oil supplies ready to come into place. One has to realise that the Iranian oil does not necessarily disappear; it will not stop being produced and will probably continue to enter the market, although one imagines at a certain discount in relation to the major customers such as China.

[Lord Kerr of Kinlochard]

My Lords, the effect of sanctions may be to cause opinion in Iran to coalesce behind the Government, the risk to which noble Lords’ attention has been drawn by an expert. Will the Government do everything they can as imaginatively as possible to make clear that we have no quarrel with the Iranian people and that the quarrel is purely with the regime? Will the Government also urge their European partners to avoid unnecessary irritants in relations with Turkey, a country which has enormous experience of peaceful coexistence with Iran and a country whose expertise and experience is extremely important to us at this difficult time?

[Lord Howell of Guildford]

I give a most emphatic yes to both those propositions. Indeed, in relation to the second one, it is very important that we work very closely with Turkey, which has indicated very clearly that the idea of Iran becoming a fully weaponised nuclear power is extremely unwelcome to it and that it will combine with the necessary actions and strategies to prevent that. At present, the main strategy is pressure through sanctions, but there are other tracks of diplomacy to develop as well. One can pursue more than one track in these matters, but this is the one that we are now engaged on, which we hope will bring results.

European Union Bill

Lord Kerr of Kinlochard Excerpts

Monday 13th June 2011 Lords Chamber

[Lord Davies of Stamford]

My Lords, the second point to which I wanted to draw attention is a theme that has come through in all these debates. All I shall say in a few sentences is to try to make explicit in Hansard what should be implicit for anyone who reads our proceedings with any degree of attention. A clear difference is emerging between those of us who are in favour of the Bill and those of us who are against it as regards the role of Parliament and our view of Parliament’s constitutional importance, functioning, efficacy and efficiency. It is clear that the coalition Government and those who support them in this Bill do not really believe in Parliament in the same way that those of us on the other side of the argument do. That is a sobering thought, because until now, for hundreds of years, there has been no distinction between the parties about Parliament and the fact that it is the best way of taking complex decisions on behalf of the country. That is why most of us came into politics and public life in the first place. It was because we wanted to be part of that process and to influence it in one way or another. All parties in this country and all of us who have stood for public elected office have always believed that Parliament was the best possible mechanism for achieving good governance and for making sure that complex arguments had been viewed from their different perspectives and debated, and that we came to a mature and considered conclusion on difficult issues. I am very proud of being here in the mother of Parliaments.

Now half our Members in this House this afternoon—perhaps more than half; I do not know, but we will see what happens in the vote—are sceptical about Parliament. They pay lip service to it and, no doubt, see some role for it, but they are clearly very sceptical indeed about Parliament. They do not think that Parliament is mature enough or sufficient for the purpose of deciding complex questions in the future. They want to go back to this Napoleonic concept of the plebiscite or referendum as a mechanism that is superior to that of parliamentary government. That is a sobering thought. I will not go further into the constitutional implications or the historical significance of that because it would take me well outside the amendment we are debating. However, it has been a theme which, unambiguously, has emerged from the debates we have been having on this Bill. It is something that we should all reflect on carefully because the long-term consequences of such a split in what has always been a constitutional consensus in this country are to my mind very sobering indeed.

[Lord Kerr of Kinlochard]

I support the final point made the noble Lord, Lord Davies, and the final point made by the noble Lord, Lord Goodhart. My point is a Burke point. I hope that the noble Lord, Lord Waddington, is listening: I am addressing it to the rising hope of the stern, unbending Tories. It seems to me really important that we should try not to undercut Parliament. As the noble Lord, Lord Goodhart, said at Second Reading, as he has said again today, what we are doing with these referenda, the ones talked about in this clause and in this Bill, is asking the simple question: do you wish to overrule Parliament; do you wish to disallow an Act of Parliament? In every case, the Act will be on the statute book and the question for the electorate will be: do you want overrule Parliament? What, I ask the noble Lord, Lord Waddington, would Burke have said?

[Lord Waddington]

As the noble Lord has been kind enough to bring me into this debate, is there not a difference between this situation and the situation which has normally appertained in the past? Is it not right to say that in the eyes of the public people are elected to Parliament to exercise the powers which are going to be bestowed upon them? The difference which has taken place over the past years is that people who have been elected to Parliament to exercise specific powers have thought that they are entitled to give away those powers in perpetuity to others. That is the great change which has come about and must be acknowledged when we are talking about Burke. Burke never envisaged that representatives in Parliament would give away the powers which they have been given—quite the contrary.

[Lord Kerr of Kinlochard]

I could repeat my Burke quotation with which I thought I had skewered the noble Lord, Lord Waddington, in an earlier debate but I will not. It is of the essence of Burke’s theory of parliamentary democracy, in which the Conservative Party used to believe strongly, that the people were consulted about who should sit in Parliament. The decisions of Parliament reflected the judgment of the people whom they had chosen. That seems to me to be quite a good rule and the point made by the noble Lord, Lord Goodhart, is a strong one. I support these amendments with the exception of the wording of the amendment on the euro, on which I have a separate amendment to which we will come later.

[Lord Flight]

I thank the noble Lord for giving way. I spent eight or nine years as a Member of the House of Commons when one particular side had a large majority. I felt that I was simply going through the motions and that there was no prospect of the Opposition members being able to stop that which the Government of the day wished to do. It was an elected tyranny by a large majority.

[Lord Kerr of Kinlochard]

I look forward to hearing the noble Lord express that view in the debate on the reform of the House of Lords.

[Lord Faulks]

My Lords, the amendment seeks to remove the referendum lock from all potential transfers of powers and competences, with the exception of the euro, Schengen and defence, in the sense that it is defined in the proposed amendment. Noble Lords might have thought, after the amendment proposed by the noble Lord, Lord Williamson, and its 40 per cent threshold, that the principle of a referendum lock had received acceptance, albeit without much enthusiasm except for those who are constitutionally opposed to referenda as a whole. This amendment goes much further. It takes outside the lock all potential transfers included in the big five, as they have been identified by my noble friend Lord Howell, with the exceptions that I have already described. I shall mention just one, referred to by my noble friend Lord Goodhart, the European Public Prosecutor's Office.

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Moved by

[Lord Kerr of Kinlochard]

22: After Clause 6, insert the following new Clause—
“Decision to join the euro
(1) No notification shall be given to the Council of the European Communities that the United Kingdom intends to move to the third stage of economic and monetary union (in accordance with the Protocol on certain provisions relating to the United Kingdom adopted at Maastricht on 7th February 1992) unless—
(a) the notification is approved by Act of Parliament, and(b) the referendum condition is met.(2) The referendum condition is that set out in section 3(2), with references to a decision being read for the purposes of subsection (1) as references to a notification.”

[Lord Kerr of Kinlochard]

This is a slightly different order of amendment from those that we have just considered. I fear that it is Osric or Malvolio, but it is not much ado. It does not address any of the great questions that we have been debating. I promise your Lordships that I shall not mention Burke versus Rousseau. I promise you that it has nothing to do with the underlying debate about flexibility versus dealing with the disconnect; it has nothing to do with whether there should be a referendum should the Government wish us to join the euro—that is agreed—it is merely about the timing of the referendum in relation to the process of our joining the euro.

The Bill ties the referendum to a decision under Article 140(3) of the TFEU, which irrevocably fixes the rate at which the euro shall be substituted for sterling and takes the other measures necessary for the introduction of the euro as the single currency of the United Kingdom. It explains that this will be a proposal from the Commission which will be the subject of consultation with the European Central Bank and then decided by a unanimous decision of the existing eurozone member states and, of course, the UK.

The Government say that the referendum on our joining the union should be taken on that draft decision about the modalities and the rate. My contention has been—I spoke on this matter at Second Reading and on our fifth day in Committee—that to wait until there is a negotiated draft decision on the modalities of joining the euro and the rate at which we join would be a mistake. I argue that the decision that is appropriate to a referendum is on whether the pound is to be replaced by the euro, not the decision, as in the EU text drafted by the Commission, on the detailed arrangements for the transition, the timetable or the rate. My contention is that the referendum should be earlier in the process and not the last stage.

I was grateful to the Minister for a letter which he sent me and copied to a number of other noble Lords this morning dealing with my arguments at Second Reading. His contention is—and I hope that I in no way misinterpret his letter—that it would be possible for the Government of the day to prepare a draft decision on the modalities before making the initial notification to the Council and Commission in Brussels and make that text available during the referendum campaign. He states in the letter that the “detail of the decisions” could be prepared,

“prior to the UK’s initial notification to the EU of its intention to adopt the euro. The question of the UK’s notification would then be subject to a referendum, by the time of which a draft decision … would be available for public discussion”,

and,

“form part of the public’s consideration”.

I do not want to exaggerate the difference between us; my point is rather small. I accept that the sequence that the Minister has set out might work; I am not saying that it is unworkable. What I am saying is that it is a little unwise.

The process in Brussels starts with a notification by the member state that wishes to suppress its currency and join the euro. When that is received, it is the task of the Commission to make the proposal, the ECB in Frankfurt to express a view on it and the Council to reach a decision. On the Minister’s scenario, we would draft it here. I confess that I can think of several precedents where it has been possible to get the Commission to put forward a text precisely in the language which the British Government wanted it to do—I happened to glance at the noble Lord, Lord Lamont of Lerwick, as I said that. I can think of no precedent for us publicising such a text in advance, passing it by Act of Parliament, as we would do, making it subject to a referendum and still hoping to persuade the Commission to present it as its own. Nor can I think of anything more likely to risk some discussion among the existing eurozone member states than our announcing the rate at which our currency was going to join theirs and giving it to them to buy—giving them the text, the decision, the modalities, the transition, the timetable. One would expect to go through some process of negotiation. It would be easier for everyone to save face if the text had not been published in advance from the start.

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[Lord Garel-Jones]

As the noble Lord, Lord Kerr, has already said—he has more experience than me—there are three very distinguished ex-Chancellors sitting below me. Would not the rate at which we enter—such a delicate matter as far as markets are concerned—normally be decided after markets had closed, say on a Friday, and revealed before markets opened on Monday? The risk of doing it any other way would be substantial. Perhaps former Chancellors have something to say on the matter.

[Lord Kerr of Kinlochard]

I agree with the noble Lord, Lord Garel-Jones. I was Private Secretary to the noble and learned Lord, Lord Howe of Aberavon, when he used to chair EMS realignment conferences as Chancellor of the Exchequer when we were not a member of the EMS. The standard form is exactly as the noble Lord, Lord Garel-Jones, lays down. One tries to avoid a market rumour on a Friday—that would be quite difficult if we had held a referendum on the Thursday—ECOFIN would meet on the Saturday, and one would have a decision on the rate very early on Monday morning or late Sunday night as the Japanese markets open. In this case it would be highly desirable to move fast after our referendum because there would be a lot of movement in the market. However, if you have decided that the rate is to be a matter for an Act of Parliament and a referendum, you are stuck with several months of volatile movement.

[Lord Lea of Crondall]

I wonder if there is a special case in this. Some of us approach this question from the hypothetical case that in a few years we might join the euro when it has parity with the pound. It might be relevant to the referendum that people might think, “If you can’t beat them, join them. It’s been around a long time—you might as well join”. Frankly, that is the way referendum decisions are probably made—in the pub. We are talking about making something quite technical into a demotic sort of fact.

Might the discussion in the press get a debate going? Something like the new clause proposed by the noble Lord, Lord Kerr, might be relevant, maybe with some adjustment, to the idea that we need to have the proposition about parity with the euro as part of the question. Could somebody enlighten me as to how that scenario—it is probable rather than possible; it has some common sense about it—would fit with this Bill and with the amendment?

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[Lord Wallace of Saltaire]

That, of course, is partly why, in all three British applications to join the European Economic Community there were informal conversations before Britain made a formal application—we needed to know what potential terms were available before we formally declared our hand. For the reasons I have outlined, we conclude that Clause 6(5)(c) is not legally deficient and that there is no risk of the Bill requiring more than one referendum on the issue, the second referendum being on the rate at which the UK would join the single currency. I therefore urge the noble Lords to withdraw their amendment.

[Lord Kerr of Kinlochard]

I always listen very carefully to what my former bosses say and I take very seriously the advice of the noble Lord, Lord Lawson, but I did not hear from the Minister any suggestion of thinking further or looking again. I agree with the noble Lord, Lord Lamont, that there is not a great deal between the Minister and me. My language, which is the language of the existing Act plus the referendum requirement, would permit the Government to do everything that the noble Lord, Lord Wallace, has said they would wish to do. It is perfectly permissive; they could do that because the notification could be done informally and the formalisation of the notification could be saved up till the end. They could do absolutely as the noble Lord, Lord Wallace, says.

[Lord Wallace of Saltaire]

I was using the language of the consolidated treaty. The noble Lord was using the language of the Maastricht treaty, and I suggest that the current consolidated treaty might provide the more appropriate language.

[Lord Kerr of Kinlochard]

I was using the language of our Act, the Act in force in this country now. I am talking the 1993 Act language, which is replicated precisely in my amendment. I am very glad to hear the Minister agree that we must avoid a second referendum and that we must avoid the crisis weekend drama, but in a plain reading the Bill says that what should be put to Parliament and the people is the draft of the decision under Article 140(3), which sets out the rate. That is the decision that we are going to take over a weekend, and it is going to be a busy weekend if ECOFIN starts on Friday, Parliament sits on Saturday and the referendum is on Sunday. It is not going to be fun.

I agree that under my language the Government could do exactly as they want. Under their language, I believe that the country would think it very odd if they did not see the draft decision including the rate, because that is what Article 140(3) of the consolidated treaty says. It uses the rate; the rate is there in the treaty. So although I regret that I have taxed your Lordships’ patience long enough, I think that I really have to test the views of the House.

European Union Bill

Lord Kerr of Kinlochard Excerpts

Monday 13th June 2011 Lords Chamber

[Lord Howell of Guildford]

My Lords, this amendment seeks to remove Article 346(2) of the Treaty on the Functioning of the European Union from Schedule 1 to the Bill. The article has appeared verbatim in every European treaty since 1957, so it is not new on the scene. At present, unanimity is required for changes made to the list of military products for which single market provisions do not apply. Under the Bill, a proposal to move to QMV would require approval by Act and by referendum. The noble Lord, Lord Hannay, and others are correct that it does not immediately mean that the veto is removed. It merely means that the move would require approval by Act and by referendum. The amendment of the noble Lord, Lord Davies, would remove that requirement.

The noble Lord, Lord Davies, spoke at length on this issue during day six in Committee, and he has spoken again now. Of course, he has considerable experience as Minister for Defence Equipment and Support, and in my view he has made the case extremely well that there could be some benefits to the UK from a move to QMV in this area. Having conceded that point, I hope that he and other noble Lords will excuse me if I now at least set out the other side of the argument, particularly as the noble Lord, Lord Davies, has just said that there is no guarantee that his proposal would work. Why is that so? It is because a move to QMV would also come at considerable cost to the UK, which a responsible Government have to consider. We must remember that this article is sensitive, as it applies to national security and defence. It is one of the wires that feeds directly into the red lines that all parties in the United Kingdom and other member states have always maintained during treaty change negotiations. Obviously that applies to previous Governments as well as this one.

The noble Lord, Lord Davies, said with some passion that Article 346 of the TFEU is a protectionist measure and he portrayed the Government as,

“using a referendum to block the removal of a derogation from the single market legislation”.—[Official Report, 17/5/11; col. 1364.]

The noble Lord, Lord Triesman, has spoken in the same vein just now. I have to point out that the UK’s veto could be used also to block any proposals to extend the protectionist measures with which the noble Lord understandably takes issue. A qualified majority could push through decisions which would favour greater national discretion and protection. The list, which has been unchanged—

[Lord Kerr of Kinlochard]

I thank the Minister for letting me intervene. The point that he is making is absolutely right—it could work either way—but the trouble is that the list is very long now. The UK interest is to have the list reduced. The list is very long because particular countries have particular little defence industries which they are keen to protect. The chances of it being possible to reduce the list are therefore low but would be enhanced if there were qualified majority voting on the composition of the list. We are starting from a bad place. It is unlikely to get worse; it is difficult to get it better; but you cannot get it better without qualified majority voting.

[Lord Howell of Guildford]

It is unlikely to be shortened, but I do not think that any of us can be sure. Protectionist pressures operate all the time, particularly in the defence industries. as the noble Lord, Lord Davies, knows better than all of us, and will continue to do so. The noble Lord said that the position is unlikely to get worse, but I think that we have to guard against that. A qualified majority could push through decisions which favoured greater national discretion and those pressures exist. The list has been unchanged since 1958 and can be expanded as well as contracted. I have before me the list as it is at present; it is a long list. It could certainly be expanded, so keeping the veto is as much, if not more than, a guard against protectionism as a barrier to liberalism, much as one believes, as I believe very strongly, in liberal free markets. The noble Lord’s zest for liberalism, which is certainly equalled by mine, could end up the opposite way round.

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[Lord Kerr of Kinlochard]

The Minister is now making a general argument against the Single European Act and against having qualified majority voting on any area of the single market because it might go the wrong way and in a protectionist direction. All history suggests that the Single European Act was a good bargain. On the whole, it got us a more open market. It was a good, Conservative, market-driven measure which worked pretty well. The exception of defence goods is there because it was there before we joined the European Union. We have to my knowledge always argued against applying single market disciplines, which we believe in, to all sectors of the economy. That is the argument for the amendment.

[Lord Howell of Guildford]

I am not a Latin scholar, but I have a feeling that there is a Latin phrase to describe what the noble Lord is doing, which is projecting from a particular area which has its particular features and qualities, with which we are all quite familiar, on to the general case for free markets and expansion of trade, which we all seek, as we have done throughout the history of our membership of the European Union and will continue to do. I suppose that the noble Lord’s proposition is that the interweaving of political pressures and the defence and security industries operates just the same as everything else. I do not believe that it does; I just have to disagree with him. In this case, we are dealing with different pressures which are evident to those who examine these patterns. There are dangers as well as gains.

Retaining unanimity does not prevent product list changes, but it ensures that we can oppose any decisions that seek to install greater, inappropriate levels of protectionism for products—weapons, equipment, trucks, APVs and all the rest—that we feel should not be exempt from single market provisions. This allows us to take decisions on the basis of what would be best for the effectiveness of the single market and our own defence industry. Unanimity enables us to oppose removal of any products in the list where that would have unwelcome consequences for the UK and might prevent us from acting quickly to secure the right equipment for our troops in times of urgent need. I reassure noble Lords that, despite the doubts that have been expressed, the Government fully support the goal of better value for money through collective arrangements for identifying gaps and procuring equipment, pooling our multinational capabilities and forces wherever we can.

European Union Bill

Lord Kerr of Kinlochard Excerpts

Wednesday 8th June 2011 Lords Chamber

[Lord Kerr of Kinlochard]

My Lords, I rise to support the amendment in the name of the noble Lord, Lord Williamson, which is a Tory amendment. I am surprised to find myself sounding more Tory than the noble Lord, Lord Waddington, which is a feat I had not expected to attempt. The noble Lord, Lord Williamson, comes from the West Country, and I suspect him of being a Burkean. At Second Reading, the noble Lord, Lord Taverne, took us through John Locke. The Taverne view against referenda was derived from Locke, and he contrasted that with the evil Rousseau, who led the French in the direction of referenda. I would have preferred to have dinner with Fox, but Burke impresses me on the role of Parliament. The reasons I support the amendment of the noble Lord, Lord Williamson, have nothing to do with the European Union; they have to do with the position of Parliament.

Burke’s speech in 1774 was to the Bristol electors who had just elected him. He had the guts to say:

“The wishes of the people should have great weight with their Representative, their opinion his high respect, their business his unremitted attention. It is his duty…to prefer their interest to his own. But his unbiassed opinion, his mature judgment, his enlightened conscience, he ought not to sacrifice to them…Your representative [in Parliament] owes you, not only his industry, but also his judgment; and he betrays you, instead of serving you, if he sacrifices it to your opinion”.

That seems to me to be the core of Tory philosophy on parliamentary democracy. I agree with all that; it seems to me to be 100 per cent correct.

This Bill is a constitutional innovation. It says that once an Act of Parliament has been passed, it will be struck down by the people if they say no in a referendum. This is not the alternative vote referendum scenario. As Conservative noble Lords may remember, we did not vote for the alternative vote; we voted for a referendum on the alternative vote. In the case of this Bill, the treaty amendments that would have been considered by Parliament, and the 57 varieties of decisions—the baked beans can of decisions—that would have been considered by Parliament would have been subject to Acts of Parliament. They would have received parliamentary approval and then they would go to referenda. That is the first time, I think, that has happened in our constitutional history.

[Lord Tebbit]

I am grateful to the noble Lord for lecturing me on conservative principles. Does he think that when Locke was making that speech—

--- Later in debate ---

[Lord Kerr of Kinlochard]

I am sure that Burke was not thinking of the situation of the EU Bill which is before us. The noble Lord is absolutely right. He may have been thinking of a situation in Ireland which developed in ways that bore some resemblance to that during his lifetime, but I am sure that when he was addressing the Bristol electorate his concern was simply with explaining to them how he saw the role of Parliament and the sovereignty of Parliament. It is because I think that he was right about that that I think that we should vote for the amendment of the noble Lord, Lord Williamson, which I hope he will press to a vote. It does not restore full parliamentary sovereignty, but in a situation where—in his words—a derisory turnout had voted, the question of whether Parliament’s will should be overruled would be raised. That is a little bit of Burke that would be rescued from the mess of Rousseau that we are in.

[Lord Dykes]

I rise briefly to speak enthusiastically in support of this amendment and to thank the noble Lord, Lord Williamson, for his remarks—I agree with them all. I was, like others may be, a little startled when the noble Lord, Lord Tomlinson, began to say that he rather agreed with the first part of the speech of the noble Lord, Lord Waddington. But I understand what he was getting at. The beauty of the amendment is that it can appeal to a whole range of Members of this House in deciding, irrespective of their own particular views on the virtue of referendums, or referendumitis, or the danger of referendums, or whatever, that this would be a good way of making more respectable a given referendum result with a turnout requirement—following the wisdom of the noble Lord, Lord Rooker, in a totally different context—and would make sure that we were not trivialising the exercise in a way that would disconcert the public in a big way. The beauty then is that, if the threshold is not reached, the power goes back to Parliament and the Government as the noble Lord, Lord Waddington, would always wish.

On 5 April, in the early stages of the Committee of the whole House, the noble Lord, Lord Davies of Stamford, in referring to Schedule 1, said:

“if we present to the electorate the sort of issues in Schedule 1 and ask them … to turn out at the polls”—

in referendums—

“we are being not only completely unrealistic but deeply insulting to them”.—[Official Report, 5/4/11; col. 1694.]

I have left out a few of the smaller words, but essentially that is what he said.

The electorate would say that that is what they elect parliamentarians to decide. We could easily have participation rates of less than 20 per cent, and we would return, therefore, to the Vernon Bogdanor example. I believe that this matter is important for parliamentarians in both Houses, but particularly here, as this House has an opportunity to improve the Bill in a way that government Ministers have already started to do with their generous amendment. We must work hard to restore public faith in the public’s ownership of first-rate parliamentary standards of tradition, work and devotion to the public good. My personal view is that I am very fearful of referendumitis and this Bill would deliver a lot of it in the future if the situation were allowed to get out of hand.

Most sensible citizens are highly intelligent and quite rightly regard subjects other than mere politics as far more important and crucial. I often do. I would cite family and children, the local community, jobs and job prospects, football and—even better—rugby, holidays, the kids’ results at school and music. Very many of those things are more important than politics. The public want to enhance political quality by leaving the political decisions to their elected representatives, even if some of them in the other place are sometimes rather nerdy people, like Bill Cash or John Redwood. We have to remember the warning words of my noble friend Lady Williams when she spoke of the disastrous example of California, which had become a bankrupt state as a result of excessive referendumitis and foolish populism. This amendment provides a pragmatic way of making the results of referendum—if there has to be one—more respectable. I hope that this House will support it.

--- Later in debate ---

[Lord Kerr of Kinlochard]

My Lords, I need to recant. In Committee, I was against the amendment on the grounds that it complicated things. However, now it seems that it may be the only hope for dealing with a problem that I had hoped would be dealt with by another route. I was young, innocent and idealistic; I did not realise that we would end up cheering a government concession that means that, in the Bill, “support” is a term of art defined at the beginning, and the various prohibitions on Ministers of the Crown in any way supporting X, Y and Z does not mean that they cannot propose, advocate or support them in Brussels—just that they cannot vote for them. This is a huge advance and I am beginning to understand how difficult the legislative process is.

Clauses 2 and 3 have two different procedures, depending on whether the treaty amendment emerges by the classical method plus a convention, or by the accelerated method that is meant to deal with emergencies. We have two different procedures, and one of the paradoxes is that we have a significance test in the second but not in the first. Therefore, we envisage that any treaty amendment by the first, traditional method plus the convention must be significant. The second curiosity is that I thought that a treaty amendment was a treaty amendment, whichever route it came by. The third curiosity is that the accelerator method, covered in Clause 3, is meant to be used in an emergency, but we do not have any emergency or urgency test built in.

The charm of the amendment, as I now see, is that it brings in these tests. It would get significance into the traditional method, where it is not at the moment. It would also bring in urgency and the national interest, which perhaps is not a bad idea. It is a complication and it is a great pity that we have not had any clear rationale for the separate methods that depend on the origin in Brussels of the treaty amendment. However, we are where we are and clearly the Government are not going to give us any concessions on that. Therefore, faute de mieux, I support the amendment of the noble Lord, Lord Liddle.

[Lord Howell of Guildford]

My Lords, I begin by dissociating myself entirely from the statement of the noble Lord, Lord Liddle, that somehow the Bill gives encouragement to referenda and public votes “on anything and everything”. That was his phrase, but it could not be further from the truth. It would be impossible to think of a proposition that is more remote from what the Bill is intended to do. The Bill is about transfers of power and sovereignty—over a wide range of issues, I concede—from the United Kingdom and this Parliament to the European Union. I am left almost speechless; what is unimportant or trivial about that? These are issues that we have dealt with again and again—the famous red lines that successive Governments have found to be of extreme importance to Britain. The argument is not that we should not be involved with the European Union in all these areas, but that we should retain a veto power if we are pressed too far; that all the powers that are needed have been conceded under the Lisbon treaty; and that those that were left out—the remaining issues where unanimity must prevail, where the veto must be kept in place and where no further treaty competences should be transferred—are all the important remaining ones, which many of the 27 countries insisted on preserving.

These are the important issues: defence and security, national security, military issues, national tax, fiscal and energy policy, provisions under the EU budget, financial management of the EU, citizenship and elections, foreign policy and social security. These are not trivial issues that can be dismissed. What prevails in these comments is a devastating lack of understanding of the importance of the remaining issues that are not within the competence and power of the EU because the nation states do not feel that it is necessary for them to be there—and, on the contrary, think that they should remain under national and sovereign control. Therefore, the starting point of many of these comments is so far removed from what is in the Bill and what the Bill is concerned with that I find it very hard to find a bridge of words to link the two, but I will try my best.

Under these amendments, decisions on whether a referendum on treaty change or a decision—these are big issues—should be held would be made by a special committee of both Houses. This is similar, though not identical, to the debate we had on amendments in Committee. They were limited to Clause 6 decisions, and seem to have widened the scope of the so-called European referendum scrutiny committee to cover treaties and Article 48(6) decisions. This is a big assignment of discretion to this parliamentary committee. How this committee would come about, I am not too sure. I have to say in the best of spirits to the noble Lord, Lord Kerr, that if he thinks that this committee would be free of interference from the Government or party-political pressures of various sorts, then his innocence is not entirely lost.

I am at least pleased that this amendment recognises that consideration should be given to the need for a referendum when treaties or Article 48 decisions are to be made. This is a clear step forward from the status quo, where it was entirely down to Ministers to decide whether a referendum was to be held and where, as we have sadly seen, Ministers and Governments can and do change their minds—hence many of our problems. The amendment appears to have retained the provisions in the Bill—which is good—that all treaties and Article 48 decisions must in future be ratified through an Act of Parliament. At least it retains a greatly increased role for Parliament, which this Bill stretches for and seeks to provide. This is a definite advance.

Moving from ministerial discretion over whether a referendum should be held, to parliamentary discretion over whether a referendum should be held, really is not sufficient. What we would have is an extra step in the process of deciding whether to have a referendum, which I suspect would merely diminish further rather than increase the confidence and trust of the British people when compared to the current provisions in the Bill and to what the Bill is trying to do. It would cut right across, and therefore potentially diminish, the work done by the European scrutiny committees of both Houses, which—despite the overrides, which one must concede have been too frequent—has been valuable in giving some impression to the general public and to the electorate of this country that there are some brakes on the system.

Why would the arrangements for the proposed European referendum scrutiny committee diminish public trust? The answer is that because whereas the Bill is, with the exception of the narrowly defined significance test, very specific about which transfers of power and competence would lead to a referendum—that is what this whole Bill is about—these amendments would do away with the certainty. In agreeing the Bill as drafted, Parliament would be giving a clear signal to the public as to when a referendum would be held. If the amendment were agreed, the whole process would be lost in a whirlpool of subjective political judgments and, I have no doubt, of manoeuvres as well, and of all the pressures that operate through our political system—perfectly properly, because that is the way that a democratic system works. The idea that they would be absent and that an isolated, divinely independent judgment could be reached by this committee is absurd and naive.

These amendments require the committee to assess all treaties and Article 48 decisions against significance, urgency and the national interest. These are highly subjective terms which are capable of a far wider range of interpretation than the criteria in Clause 4, which have been carefully analysed and crafted. This amendment moves the whole debate away from an objective consideration of whether power or competence has been transferred from the UK to the EU. It moves it away from objectivity to subjectivity of precisely the kind which works against trust and against confidence, and against support for the whole European Union project which I thought so many noble Lords wanted to see reinforced.

Government and Parliament will of course take into consideration issues of urgency, importance and certainly the national interest when negotiating a treaty change, and in passing Acts to ratify treaty change. These are centrally important issues, but they are not the right criteria on which to decide whether a referendum is needed before a treaty change or an Article 48 decision is ratified.

The other problem with these amendments is that the decisions on these highly subjective issues will be made, frankly, by a small number of parliamentarians. I have said that we are not quite sure how they would come to be on this committee. The way this committee is set up means that it could only ever deny the public a referendum, which is what is promised under this Bill. I do not like to say it, but when my noble friend Lord Hamilton points it out, it is a fact that the British people’s trust in the institution of Parliament and the political parties within it has, in this area, been eroded over the years, particularly on issues of Europe; I sometimes think that on other issues it is grossly exaggerated. One always marvels at how many people are generally critical of the political class, but when they start talking about individuals—the hard-working Members of Parliament—they say, “Oh no, our person is splendid. It is just the general lot we do not like”. It can be overdone. However, on the issue of Europe, it is quite clear, by every measure that we have seen of the public’s support and the general tenor of the public debate, that a lack of trust is noticeable. People have been promised a referendum on a treaty change, only to see it taken away again. This is reflected in the number of people who do not value the EU, who do not trust it or who simply do not seem to grasp its work, aims or purposes. There is a sense of apathy, because people feel powerless to influence decisions which affect their daily lives. To deny this really is to shut our minds to the good and valuable side of the EU’s work, which I believe is enormous and often underestimated.

The coalition Government intend to address this cynicism, apathy and lack of trust. The aim is to reconnect the British people directly to the key decisions on the EU and assure them that, while there are now vast powers and competences in the EU’s hands, any further expansion of these would have to be very carefully argued and in many cases put to the British people for their approval. It remains a mystery to me why the Opposition still somehow argue that there should be these extra powers—that we are going to need these future treaty changes—but what for? One is left groping the air, trying to understand the mystery of it all. It is a sort of apophatic doctrine, that somehow there are issues ahead so complicated that the people cannot put them into words or understand them, and that these require the flexibility which the noble Lord, Lord Hannay, keeps returning to.

We know that the British people want a say. The June 2009 survey by the European Parliament found that eight out of 10 people in this country agreed that future EU treaty changes should be decided by referendums. Fewer than one in 10 disagreed. These amendments do not represent the modern reality about transparency and openness that we in the coalition Government want, and which reflects a modern attitude to participatory democracy. They are a step back in time which may be nostalgic and romantic, but they take us away from reality and away from the future.

I am grateful to my noble friend Lord Waddington, who is not in his place at the moment, for what he said about these proposals in Committee. He said that,

“you are moving even further away from a situation where the general public has any confidence at all that its views are considered when vital decisions are made”.—[Official Report, 16/5/11; col. 1230.]

However well intentioned these amendments, they cannot serve to enhance this Bill or its underlying virtues and purpose. The Bill is deliberately designed to set out as clearly as possible which treaty changes would require a referendum, while avoiding the need for trivial referendums. That seems to me to be a scare story which I hope we are not going to hear repeated because it is not connected with the reality, the intention or the possibilities which arise from this Bill. Leaving it to the discretion of a committee of parliamentarians to decide whether a referendum is needed will do nothing whatever to reconnect, re-engage and regain the trust of the British people. I believe this is an amendment that we could do without and that does not help the Bill or the underlying purposes, which I believe most noble Lords in all political parties and in none basically want reinforced. I think these amendments go the other way and take away from us the purposes and goals that we should be pursuing, so I ask the noble Lord to withdraw the amendment.

European Union Bill

Lord Kerr of Kinlochard Excerpts

Wednesday 8th June 2011 Lords Chamber

[Lord Stoddart of Swindon]

My Lords, I have read the amendment, which would restrict the operation of the Bill to matters of urgency. That is what it is about. I thought that the Bill was about major transfers of power, not just little changes to ongoing, day-to-day matters in the EU; it is about major transfers of competence or powers. Whenever you are transferring powers from this country to another institution, it ought not to be done in haste. There should not be urgency about it.

Those sort of matters, those great matters, should be decided only once all the issues concerned have been examined by the Government and by Parliament; and then by referendum. Why do we want an urgency clause? We cannot afford to have an urgency clause when we are transferring powers from our country to another organisation. I cannot support the amendment, although I understand why the noble Lord, Lord Triesman, feels that it would be helpful to the Bill. I do not think that it would be helpful to the Bill, because it would undermine its whole purpose, which is to ensure that when this country transfers major powers elsewhere, there has been proper consideration over a proper period by the proper authorities, including the Government, Parliament and the people.

[Lord Kerr of Kinlochard]

My Lords, I need to make a rather nerdish point.

[Lord Stoddart of Swindon]

Oh no!

[Lord Kerr of Kinlochard]

The noble Lord, Lord Stoddart, will be very upset. I accuse myself of being nerdish, and I hope that the noble Lord will agree that I can be considered in the same class as Mr William Cash.

We are talking about an amendment to Clause 3. Clause 3 is about the accelerated, simplified procedure. I do not know why we have Clause 3 separate from Clause 2, but we do, and we are debating it. The simplified procedure cannot be used for the transfer of competences. That is what the treaty states. Article 48(6) states that the decisions referred to in the second paragraph,

“shall not increase the competences conferred on the Union in the Treaties”.

We are talking about urgency and the use of the competences that the treaties have conferred. We are talking about urgency because that is the nature of the simplified procedure. It was invented to move fast in situations where we might want to. It avoids the convention, it avoids the full paraphernalia after Parliament—you still have to consult Parliament under Article 48(6), but that can be quite quick.

This is a modest amendment, unlike the previous amendment on which we voted, which was bigger. This is a modest amendment because it simply suggests that the urgency condition might be written into Clause 3, on the simplified treaty revision procedure, which is about urgent treaty revision and not about competence. It cannot be used to confer competences on the Union from the member states.

It seems to me appropriate and modest to say that, when we are dealing with treaty revisions or decisions taken under Article 48(6)—which, by definition, will happen only in a hurry—we should be able to have an accelerated procedure here in this country. We might accept that the general view was correct: this was an emergency and we needed to move fast. Of course, if you did not accept that, you would have said “No” in Brussels and the accelerated procedure would have stopped, because it still requires unanimity. By definition, you are in a situation where people have thought, “We haven’t got the time to do the whole shooting match”. This is important. The Government think it is in the UK interest—they voted for it. Who would decide whether the urgency consideration applied? It is a question asked in this debate. The House would decide. Parliament would decide. If this provision was in the Bill, the Government would have to explain whether the urgency procedure, in their view, applied. Parliament would vote on that. This is a parliamentary democracy—that is where the decision should be made.

I do not see anything wrong with this amendment. It seems to me that it is appropriate—particularly appropriate—to this clause. I supported the previous amendment—the bigger amendment—which would have written it also into Clause 2, alongside the significance condition, which sadly is still missing in Clause 2, for reasons that I do not understand. Putting it in Clause 3, which the amendment of the noble Lord, Lord Triesman, proposes, is absolutely appropriate and I support the amendment.

The Minister commented with approval, as would I, on the evidence that Sir John Grant gave to the Commons committee. Sir John Grant made two points that the Minister quoted with approval. I approve of them too—although, as the Minister delicately pointed out, Sir John is a more recent permanent representative in Brussels than me. There may have been a faint connotation in the Minister’s remark that I might be a bit fuddy-duddy or out of date. I accept that; it is perfectly possible, and Sir John Grant is a very brilliant man.

Sir John said that he saw no chance of serious treaty amendment in the next few years. I agree with him for a whole lot of reasons. Nobody in Brussels wants it; the UK Government have said that they are not going to have it; and it is in a coalition agreement. That seems to me to be fairly conclusive, so I think Sir John Grant was on pretty safe ground with that prediction. He also spoke of the unlikelihood—and the Minister quoted him—of the passerelles being used in the near future. I agree. That seems to me to be implausible too.

What the Minister did not mention—I cannot remember whether Sir John Grant did—is the much more likely scenario in which, some time in the next decade, something will cause people to say, “Jeepers, we are going to have to change something. This is clearly a case for the accelerated procedure”. Things do happen in the world, things change, and the chances are—I do not think this is very likely in the near future, though the monetary example is fresh in our minds—that some time in the next decade there will be a need seen by most people, possibly by us as well, for a change, and if it is to be done quickly then the chances are that people will use Article 48(6) procedure.

[Lord Wallace of Saltaire]

May I, with apologies, ask a nerdish question of the noble Lord? If I understand Article 48(7) correctly, it suggests that urgency can be carried through at the fastest in six months. Is that correct?

[Lord Kerr of Kinlochard]

I do not think that is what the treaty says, but yes, it is likely that that is the case. Of course, any treaty amendment requires ratification by whatever the national procedures are. I am talking about an emergency situation in which most people think, “We have to do this pretty fast”.

We could still have our referendum. If the amendment in the name of the noble Lord, Lord Triesman, were accepted, there is nothing to stop the Government of the day saying to Parliament, “Despite all the risks of delay, we actually think this is a sufficiently serious matter to justify having a referendum”. That is entirely open to them, if the amendment of the noble Lord, Lord Triesman, is accepted. However, that amendment would remove the present danger in the text, which is that there would be an absolute requirement to have a referendum because there is no potential let-out for an emergency, even though that is the most plausible scenario for a treaty amendment and everyone, including us, would have agreed that it was an emergency and therefore justified the accelerated procedure. That is why I support the amendment of the noble Lord, Lord Triesman.

[Baroness Nicholson of Winterbourne]

The noble Lords opposite will not be surprised to hear that I find it very difficult to accept this amendment. Coming from the Brussels angle, I remind noble Lords that in Brussels the word “urgency” relates to the French word “urgence”, which means of powerful importance. I recall that week after week, month after month in Strasbourg and Brussels, we had urgency debates which took place many days, weeks and sometimes months after the activity in question, such as a revolution somewhere or the Arab spring. It took me a while to realise that the English meaning of the word “urgency” is quick or hurry up whereas in French it means something that counts, something that is valued and something to which we should pay special attention. It is rather like high representative which does not mean high at all, but important.

I suggest that the transfer of sovereignty falls into the French “urgence” category—it is something of powerful importance—but inevitably Brussels life advances at the pace of a snail; it is very slow. Rather like the mills of God, Brussels grinds exceeding small and it takes a very long time. I have never known anything of importance, high-value, “urgence”, to happen at any speed in Brussels. Nor do I think that the transfer of sovereignty, important as it is, should be done in haste. I honestly cannot anticipate Brussels not taking maybe a decade over something of real value, such as the transfer of sovereignty.

When I joined the other place in 1980, I found myself dealing with a very important piece of legislation on intellectual property. It was data protection and intellectual property in computer software. When I arrived in the House of Lords, a decade later, I found that the Bill had been to Brussels and come back to the Lords and it was still in an active, first-step, consultation process. Two years later, when I arrived in the European Parliament, being lucky enough to be elected there in 1999, I found the Bill was in the European Parliament. It was just about to leave the European Parliament when I left a decade later. Powerfully important things such as that take a considerable length of time. How much longer do we imagine that the transfer of sovereignty would take?

During the past decade, we in the United Kingdom have very actively supported the enlargement of the European Union. It now has 27 states and more are coming in: Croatia tomorrow and the Balkans the day after. As a result, quite properly, the slowness has increased tremendously. It is no longer possible to put things through even at a reasonable speed; now things are slower than slow. That is why I do not see a referendum coming our way even if this Bill goes through in its entirety, which I hope and pray it will, for maybe at least a decade. Brussels is simply not able to think that way. The confusion of the euro, combined with the continuing enlargement, has made the whole system so slow, and I do not think that we will see a referendum in the next 15 years or so. Urgency, in English terminology, is simply not available.

European Union Bill

Lord Kerr of Kinlochard Excerpts

Wednesday 25th May 2011 Lords Chamber

In those circumstances, it seems right—and I use the word right quite deliberately—that at the beginning of the next Parliament this issue should have to be reconsidered. If the experiment has taken place and we have had these referenda on these issues, no doubt we will be in a position to judge whether we need it to continue. If there have not been any referenda, it seems to me that we probably do not need it anyway. In either of those circumstances, a sunset clause is precisely what is needed, and I support the amendments.

[Lord Kerr of Kinlochard]

I support the amendments in the name of the noble Lords, Lord Taverne and Lord Richard, and in the name of the noble Lords, Lord Liddle and Lord Armstrong. The noble Lord, Lord Armstrong, is stern and unbending and I support his Gladstonian position. I will also speak to the amendment that stands in my name and those in the name of the noble and learned Lord, Lord Howe, the noble Baroness, Lady Williams, and the noble Lord, Lord Hurd of Westwell.

When Committee stage started—it seems a very long time ago—I attempted a feeble Shakespearian flourish, but I now realise that it was completely wrong. I had the wrong play; we are in A Midsummer Night’s Dream, or rather nightmare. We are a long way remote from the real world, but there is still perhaps in our debate a role for the rude mechanicals of the Cross Bench, who have a little experience in what actually happens in Brussels.

When we were last in Committee, the noble Lord, Lord Howell of Guildford, quoted from the then head of the Council Legal Service, Jean-Claude Piris. He did so in answer to the noble Lord, Lord Davies of Stamford, who had said that the Bill,

“will be seen by our partners on the continent of Europe and in Ireland as an example of terrible British negativity about the European Union”.

The noble Lord, Lord Howell, replied:

“We have clear indications that there are no difficulties. Jean-Claude Piris, the former head of the Council's legal service in Brussels, has commented that he sees no difficulties with … the thrust of the Bill. We have checked with people around the European Union and we are not getting the picture that the noble Lord talks about”.—[Official Report, 23/5/11; col. 1647.]

The noble Lord, Lord Taverne, quoting Vernon Bogdanor, spoke of Alice in Wonderland. This is what Jean-Claude Piris said in the letter of evidence that he sent to the House of Commons Scrutiny Committee, writing in a personal capacity as he was about to retire at the time. He said that if the other member states,

“were to consider that the national legal constraints of the UK were to lead to the practical impossibility of taking certain steps within the Union which would be perceived as necessary or desirable by many or all other Member States, it could not be ruled out that the compatibility of the referendum requirements with international and EU law might become an issue. Furthermore, if, in a specific case, the requirement to hold a referendum were to result in an impasse in the future, this might lead to the UK being sidelined on certain issues. This is because it could trigger a tendency among other Member States to circumvent this situation, either by engaging in enhanced cooperation among themselves without the participation of the UK, or by concluding intergovernmental agreements outside the framework of the European Union.”

That was the personal opinion of the then counsel to the Council—the legal adviser to the Council of the European Union—on this Bill.

I do not know whom the noble Lord, Lord Howell, talks to. He says that as he goes around Europe he meets nobody with concerns about this Bill. He should get out more. When the Bill is over, I have no doubt that he will be delighted to get out more.

I do not want to exaggerate my point but very few people across the European Union are aware of the extraordinary process that is taking place here, and the reason for that is that very few people in this country are aware. So far as I know, eight days of Committee on the Bill have not earned an inch of space anywhere in the British press, and therefore there has been nothing for the foreign journalists to pick up. As you go down the Champs-Élysées—

[Lord Pearson of Rannoch]

My Lords, perhaps I may refer the noble Lord to the Quentin Letts column in the Daily Mail and to copious inches in the Daily Express.

--- Later in debate ---

[Lord Kerr of Kinlochard]

I stand corrected and congratulate the noble Lord on his close reading of the Daily Mail. As you go down the Champs-Élysées, people are not saying to each other, “Do you know that the British are trying to block action under Articles 333.1 and 333.2, whereby one could have a qualified majority on the implementation of enhanced co-operation?”. No one knows what we are up to in this Parliament. No one in this country knows what we are up to. We are remote—we are in A Midsummer Night’s Dream. This is not the city of Athens; it is somewhere in the thickets of a forest outside.

Therefore, I feel that the Government’s principal argument—the noble Lord, Lord Taverne, spoke elegantly to it a moment ago—about the purpose of the Bill being to deal with mistrust and distrust is a little absurd. When these provisions are on the statute book, they will generate as little interest in the country as their passage, despite all our eloquence in this Chamber. There is no knowledge of these provisions outside and therefore no knowledge of the argument about distrust. It is possible that over time Jean-Claude Piris, counsel to the Council of the European Union, will prove to be more right in his prediction than even the noble Lord, Lord Howell of Guildford. It is possible, and it seems to me plausible, that there will be a chilling effect on UK negotiators in Brussels as a result of these provisions. We know that there are going to be no referenda in this Parliament. We know that because, as the noble Lord, Lord Taverne, reminded us, the Government have said that they are not going to agree to any of these things being covered in the Bill anyway. I do not think that that is a big deal in Brussels and I do not want to exaggerate but, over time, it could become quite a big deal.

We have created an extraordinarily rigid structure with this Bill. Flexibility will be necessary—or most people will think that. The UK negotiator will be unable to agree to propositions which are in the UK interest because they would require a referendum in this country, and the Prime Minister will say to him, “We don’t want a referendum, so you have to block it. You can’t agree. Sorry, go away”. That is likely to happen over time and the result of that might be, as predicted by Jean-Claude Piris, that the others will say, “We’re stuck. The British won’t agree so we’ll go off and do it amongst ourselves”. Some, possibly the noble Lord, Lord Pearson of Rannoch, would consider that that was a very good thing, and in some cases it is conceivable that it would be a good thing. Others might want to do things in which we might not want to take part. However, there may be a measure in which we wanted to take part but the others felt that they could not include us because we had our referendum requirement. I speak as a rude mechanical who has spent a lot of time building things in Brussels.

I add a small very rude mechanical’s point. When the noble Lord, Lord Pearson of Rannoch, elegantly argued that we had not said anything in this debate about the euro, he was not strictly accurate. I hope that there is an outstanding point in the Minister’s mind, which is the reference in Clause 6(5)(e) to the euro. That, read with Clause 5(1), seems to me to mean that we would be submitting the wrong question to an Act of Parliament and referendum. The issue would be the rate at which the UK joined the euro, not whether the UK should join the euro. It seems to me that there is a little bit of overspecification in the drafting. The noble Lord, Lord Hannay, made the big point—nobody in this Chamber, so far as I know, and no amendment on the Marshalled List argues that there should not be an Act of Parliament and a referendum on joining the euro. Mine is a rude mechanical’s point—we have overspecified the decision which would be put to our Parliament and to a referendum.

We will move into a different kind of Shakespearean play on Report. I hope that the Government will reflect on some of the points which have been registered—some of them were very mechanical points, for which I apologise, but some of them were very big political points and were eloquently put from all sides of the House. I hope that we will see some changes proposed by the Government before we come back to this. We have spent far too long in the enchanted forest of A Midsummer Night’s Dream. I wish that I were able to make the last speech in Committee, having made the first. Unfortunately, I think that I will have to cede that role to the noble Lord, Lord Liddle. I draw his attention to how Puck ends A Midsummer Night’s Dream. He states:

“If we shadows have offended,

Think but this, and all is mended,

That you have but slumber'd here …

And this weak and idle theme,

No more yielding but a dream”.

I wish that it were.

[Lord Flight]

My Lords, I apologise for not being present at the start of the debate as I had problems parking my bicycle on arriving at the House.

It seems to me that there is a perfectly fair debate to be had on what items should or should not be covered by referenda, but that there is no real case for treating this Bill as though it were in the same category as the counterterrorism legislation, and for arguing that it is suitable for a sunset clause. Once it becomes an Act—assuming it becomes an Act—it will not essentially be any different from other legislation in this country. It is, of course, perfectly straightforward for a Government to get elected on a manifesto that they will revoke this legislation, and so to do, but I do not believe that those supporting these amendments have made a proper case as to why the Bill should be treated any differently from other legislation. We have a perfectly established democratic process for removing legislation when a new Government are elected, if that is the will of the people. But the requirement would be for an incoming Government to have the will of the people to revoke this legislation. Secondly, if there were some automatic process of cancellation, a great legal hole would be left, unless the automatic sunset clause revoking the legislation were accompanied by fresh legislation at the same time to plug the many holes that need to be plugged that the Bill addresses.

The amendments are little more than an excuse to put the pro-EU cause and the anti-argument for this Government, who are quite rightly addressing the concerns of UK citizens. I sit down by making the comment that I feel uncomfortable that those who are opposed to the Bill seem to have the view that those British citizens—potentially the majority—who have become increasingly critical of the EU should be silenced in the interests of advocating the great EU cause. That is profoundly undemocratic in principle. Certainly, on this issue, a sunset clause would be wholly unsuitable.

--- Later in debate ---

[Baroness Nicholson of Winterbourne]

I follow the noble Lord with further comment about the applicability of a sunset clause for this type of Bill at all. We must provide certainty for the British public, which as a former Member of the European Parliament I must say is sadly lacking for them at the moment because of the way in which European Union business has previously been dealt with by the British Parliament and Governments. The sunset clause, which would in effect kill the Bill, would take away that certainty, and I wonder whether it is an applicable mechanism for this sort of Bill.

The sunset clause was, of course, introduced by the Counter-Terrorism Bill on the basis that that Bill introduced extraordinary measures in keeping with the UK's liberal values in an emergency, but that is not the case with the European Union Bill. This is not an emergency and the Bill does not reflect a short-term measure. It is a long-term policy shared by all sides, except I think by the minority, with even the Opposition accepting that there should be a referendum for big treaty changes under the ordinary revision procedure for issues such as the euro. I am one of those who believe profoundly that in order to reconnect with the public we need more possibilities for referenda, as those outlined in Schedule 1 inform us. However, the Public Bodies Bill, which also has a sunset clause, is tasked with a specific programme for a specific time. Let me suggest that as this Bill is for the long term, this is no different from any other legislation that your Lordships’ House passes. For example, privatisation did not have a sunset clause. It was, we believe, the right thing to do to react to new circumstances.

[Lord Kerr of Kinlochard]

As the noble Baroness continues to distinguish this Bill from other Bills, would she like to distinguish it from the Fixed-term Parliaments Bill, in which subsection (4) of Clause 7 headed, “Final provisions” is almost precisely the same as the one proposed in the amendment in my name and supported by my noble friend Lord Williamson?

[Baroness Nicholson of Winterbourne]

I thank the noble Lord very much. Perhaps I may continue. The day a Government believe this Bill should be changed, they can do exactly that through the proper mechanisms; they can repeal the Acts that introduced them. However, repealing the Bill and giving discretion back to Ministers is not the answer as it is with the other Bills that I have quoted. As I recall from my time in the House of Commons, a sunset clause is traditionally used to delegate authority for a temporary period upwards to the Executive. This Bill delegates downwards, which is why I suggest that a sunset clause is not relevant for this Bill.

I recall that Parliament defines a sunset clause as a provision in a Bill that gives it an expiry date once it has passed into law. Sunset clauses are included in legislation when it is felt that Parliament should have the chance to decide on its merits again after a fixed period. This sunset clause kills the Bill at the end of this Parliament, thus destroying the whole purpose of the Bill, which is to give the British people a say at last in what is happening in their name in ever-increasing EU legislation. However, it even gives it back to Ministers and not to Parliament. This is simply out of line with Parliament’s definition of sunset clauses.

The noble Lord, Lord Kerr, has spoken quite a lot. I give way again.

[Lord Kerr of Kinlochard]

I am very grateful to the noble Baroness. Coming back to the Fixed-term Parliaments Bill, I hope she will explain why the provision for which this House voted, which is in that Bill now, is inappropriate to the Bill we are looking at today.

[Baroness Nicholson of Winterbourne]

The sunset clause is inappropriate because, as I have said, this Bill attempts to do something quite unusual with regard to EU legislation and successive British Parliaments and Governments. Traditionally, British Governments, and to a lesser extent British Parliaments, had not involved themselves in EU legislation. Your Lordships’ House is very different from the other place. I am pleased to see that the noble Lord, Lord Roper, is in his usual place. It is known in the European Union—in the European Parliament particularly—that the reports from your Lordships’ House are unique, wonderful and vastly helpful. However, the fact is that given our particular position in this House—we are not elected and primacy rests with the other place—it is the other place that has let down the British people. EU Standing Committees A and B are deficient in their grasp of what is going through under EU legislation. They have not been briefed by successive Governments, which is why I believe that these referenda potentially give the British Parliament the opportunity to grasp again the power that somehow it has let slip.

It is all too true that there is an assumption now that EU legislation has primacy over the British Parliament. That is not the case. Parliament has let slip so much EU legislation in past decades that there is now an assumption that the primacy of European Union legislation overrules the primacy of what is passed through the British Parliament. It was not until I sat in the European Parliament that I realised that other Parliaments have not behaved like this. Other Members of the European Parliament from different member states did not have that perception. In other words, I am suggesting that we have undervalued the British Parliament’s authority over all EU legislation. That is because the British Parliament, particularly in the other place, has allowed so much legislation to slip by that an assumption has arisen that somehow we no longer control it. By we, I mean British parliamentarians. Therefore, I suggest that referenda offer one window into closing this gap of communication with the British public.

--- Later in debate ---

[Viscount Trenchard]

My Lords, I hesitate to intervene at this late stage in the debate, especially as I was unable to participate in the Second Reading and earlier Committee debates. However, I feel that I want very much to intervene in the debate now, and I especially felt that on Monday. The noble Lord, Lord Hannay, pointed out that no support on these Benches had been given to the Bill during the debate. I wanted to say that that was because the people who were moving amendments were those who wanted to change the Bill as it stood, whereas those of us who were silent could well have been silent because we supported the Bill as put before your Lordships’ House.

The Bill is intended to enhance transparency and accountability through greater public and parliamentary control over government decision-making and to increase the trust and engagement of the British people in the EU, which is very necessary.

The noble Lord, Lord Kerr, remarked earlier in his eloquent speech that we are fortunate to have on the Cross Benches of your Lordships’ House people who still live in the real world. I should like to ask the noble Lord where he thinks the real world is, because it seems to me that the real world for any of us is where we happen to be at any particular time. I do not have the same experience as the noble Lord of life in Brussels, but I spent one very enjoyable year there in 2006. I suspect that if I had spent a great many more years there, it is quite possible that my feelings towards the European Union’s institutions would have changed.

I have spent considerably more years in Japan, which is very different. Therefore I have seen the evolution of the European Union, and the United Kingdom’s place within it, from very different circumstances and a different country. That has led me to hold different views on our country’s bilateral relationships with other countries. I do not disagree for one moment that there are matters on which it is right to pool our powers with our European partners in order to exercise more influence. Equally, there is a great need also to draw a line in the sand. When I am in the real world outside this House, in the country or in other countries, I find that people want to know who is making their laws. I think that they feel cheated that there was no referendum on the Lisbon treaty. I am not sure that we should be proud as a Parliament to have provided a referendum only on AV and not on the Lisbon treaty, for it seems to me that the one, the Lisbon treaty, is much more important than the other.

Several noble Lords have suggested that we are changing into a plebiscitary democracy. There is a danger that we could have too many referendums; I am not in favour of having a great number of them. However, in matters which fundamentally change the way in which laws are made in this country, and where this Parliament decides to hand over, to all intents and purposes permanently, powers to the European Union, I think that most people think that they should have a say. So they definitely feel cheated.

I have enormous respect for my noble and learned friend Lord Howe. I listened with great respect to his eloquent speech in which he said that it would be better if we all concentrated on making the European project work rather than argued about this type of legislation. I remember voting in the referendum in 1975 to endorse the decision to join the European Community, as it then was. During many years in Japan, I extolled the virtues of the single market and tried to persuade Japanese companies to list their shares on the London Stock Exchange because of its access to it. I tried to persuade companies to come and invest in this country because it would give them access to a single market of 300 million people or whatever it was. However, at that time it was not envisaged that the European Union would extend itself into so many areas of legislation affecting our national life. A great deal was said about subsidiarity: in other words, where it is necessary to combine at European Union level, we should freely do so, but where it is possible and appropriate that national Parliaments should continue to decide things in the interests of their citizens who have elected representatives to those Parliaments, subsidiarity should apply. We hear very little about subsidiarity today.

The noble Lord, Lord Taverne, made a very eloquent speech in moving his amendment. He said that yesterday he heard that the City was very concerned about European financial regulations, and that therefore we should be very careful because a Bill such as this would reduce our ability to participate properly in formulating appropriate financial regulations. I feel that the noble Lord is seeing this from the wrong angle. It is increasingly difficult for our own regulators, who have far greater experience of financial markets, to make any regulations at all. The chief executive of the FSA told me fully a year ago that he can make no regulation now that is not agreed by the other 27 members, many of whom have very little experience in financial markets. Perhaps many of the other 27 feel that London has too large a share and would like to see some of that share go to other financial markets in the European Union. It is very important that we continue to defend the City and argue for the maximum say in these matters for our national regulators.

[Lord Kerr of Kinlochard]

Has the noble Viscount noticed, as I have with approval, Mr Lidington’s plan to make a speech today at the Mansion House saying that he will be relentless in dispelling the myth of Anglo-Saxon isolationism? This seems to me to be an excellent thing to do. Does he feel that this Bill in any way helps to remove from the continent the myth of Anglo-Saxon isolationism, and will he address the question of sunset clauses?

[Viscount Trenchard]

I thank the noble Lord for his intervention. Like him, I welcome the speech to be made by Mr Lidington. I do not wish the United Kingdom to be isolated in Europe—not for one minute. I believe that the Bill should help the United Kingdom to participate in decision-making in the European Union in matters where it is appropriate that we should do things together. It is necessary that we should make it clear where this country and this Parliament stand. We need this in order to define again the relationship of this country with the European Union. The people do not want to see more powers transferred to Brussels without their agreement.

European Union Bill

Lord Kerr of Kinlochard Excerpts

Monday 23rd May 2011 Lords Chamber

Debate on whether Clause 7 should stand part of the Bill.

[Lord Kerr of Kinlochard]

My Lords, I rise to speak to the question of whether Clause 7 should stand part principally to draw attention to a common feature of this clause and succeeding clauses, which was also a feature of Clauses 2 and 3 and to which the noble Lord, Lord Hannay, has drawn attention on a number of occasions. The question concerns the acceptability of the language in Clause 7(3):

“A Minister of the Crown may not vote in favour of or otherwise support a decision to which this subsection applies”.

This is the chicken-and-egg problem, as explained by the noble Lord, Lord Hannay. It would be normal before a decision is reached in Brussels that there should be preliminary discussion, the preparation of a text and textual negotiation, and that various rounds should be gone through before there is a decision. I am in no way disagreeing with what Clause 7(3) says about the Minister being banned from voting in favour of the decision. My worry—like the worry of the noble Lord, Lord Hannay, about previous clauses—is simply about the language “or otherwise support”.

One can envisage a situation in which the United Kingdom representative might be keen to say, “My Government would live with this”, or “My Government would like this”, but it must be understood that under UK law, under this Bill, it would require an Act of Parliament and a referendum—or, in this case, will require an Act of Parliament. That could be construed as supporting the measure, though explaining that there were steps that had to be gone through before the UK could vote for it. I am nervous about our being unable to say anything in respect of decisions that we favour. That seems to me the effect of this language. The risk is that the negotiator would be accused of having broken the law by supporting the idea or a particular form of the draft decision.

--- Later in debate ---

[Lord Howell of Guildford]

Reflections on the words as they appear here will be bound to have cross-reading repercussions. I will put it like that: that is what I am saying that I will seek to do.

I turn now to Article 333(1) of the TFEU, on enhanced co-operation. The pat answer that the Bill gives if you stare it in the face is that if a sensitive veto listed in Schedule 1 is removed, there will be primary legislation for the removal of other vetoes. That is something that the noble Lord, Lord Kerr, questioned. He cited the German example to which the noble Lord, Lord Empey, also referred. That is stretching it a bit. I cannot see that the pattern in Germany—for which there may well be good reasons, such as anxiety not to offend the Länder—arises here. I trust that it does not sound too austere to say that it would not be our way to go through that kind of action in the hope that people would understand that we really wanted to do the reverse. Nevertheless, it is a complex point and I have more to say about it.

This is to do with whether we maintain or surrender a veto in these areas. We are not talking about action in those areas: I am sure that that is perfectly obvious to noble Lords. Enhanced co-operation decisions will not be agreed overnight: they will be agreed as a matter of last resort in areas of sensitivity for some member states. A move to set up enhanced co-operation has happened only once, and is being proposed now in the context of the European patent.

[Lord Kerr of Kinlochard]

I had hoped that the Minister would score another boundary: he was starting splendidly with his exegesis on Germany, with which I entirely agreed. Does it not say in Clause 7(4)(e) and (f) that we are talking about a particular enhanced co-operation? We are not talking about the general rules for enhanced co-operation. I accept the first point that the Minister made about precedent. It seems to me—and, I think, to him—to be an insufficient answer, but it was a sort of answer. The point that he is making now surely does not apply, because paragraphs (e) and (f) state that the decision will relate to a specific reinforced co-operation in which we will be a participant.

[Lord Howell of Guildford]

That is precisely the point that I am making. I mentioned the European patent, which is a good example. A decision to move to qualified majority voting would not be something that we would agree overnight. It would be much more likely to be subject to negotiation over a lengthy period, not least because it would result in one or more member states being outvoted. I simply do not accept that the provision would hold up the taking of a specific decision. I am afraid that my mind may not be meeting that of the noble Lord, Lord Kerr. I cannot see what his concern is. This is to do with removing the veto, not taking that decision. That is the best explanation that I can give: I think that it meets his concern, which he put forward in a very valuable and experienced way.

[Lord Kerr of Kinlochard]

If we are talking about a specific enhanced co-operation, and the Minister accepts that we are, we have something going on out in the field—this is Article 333 on common foreign security policy. A particular kind of external activity is taking place and we do not know what it is. Those who are taking part in it have to make rapid decisions. They have to decide what we do tomorrow about situation x. The treaty says that if they unanimously so decide, they may take implementing decisions by qualified majority in relation to that specific deployment, or whatever it is. They are not changing the treaty or the general rules but are dealing with the problem that has arisen now. I do not understand the different scenario that is being presented when the Minister says that this will be prepared over time and that there will be a lot of consideration. This is about implementation. It is about people in the field. That is why I think it is rather inappropriate. Is the Minister quite sure that it is appropriate to make this a matter on which the UK would need to pass primary legislation?

[Lord Howell of Guildford]

I am not sure I agree with the picture of decisions having to be taken instantly. On the contrary, it seems to me to be much more likely that there would be all kinds of negotiation, not least because it would result in one or more member states being outvoted. I do not think these are. This is a very complex matter, and I have sought to try to explain as best I can how we see it working but, of course, I will write to the noble Lord in more detail about his precise concerns. I am not sure that he has really satisfied me about the cutting edge of his amendment, and I have clearly not satisfied him. We will just go on boxing and coxing while other noble Lords have to listened, so I think it is better if I write to him and try to clarify the Government’s understanding of the reasoning and the reason why primary legislation would be justified against his clearly very strongly held view that it would not be justified and might hold things up.

[Lord Howell of Guildford]

Yes, of course I will.

I want now to turn to the next point that the noble Lord raised, which is to do with Article 64(3) of the TFEU on the reverse of liberalisation of capital movements to or from third countries. The noble Lord, Lord Kerr, indicated he did not fully understand what the Bill means. He interpreted it as allowing a move back from QMV to unanimity. Article 64(3) allows for unanimity for the adoption of,

“measures which constitute a step backwards in Union law as regards the liberalisation of the movement of capital to or from third countries”.

I do not know where this phrase “step back” originally emerged from. I do not know whether it was way back in the original draft of the European constitution. It may have been. It is used to do that which we believe should be subject to an Act of Parliament. Once again, I will obviously look at it very closely, but that is why we believe it is in the Bill in the form that it is and why we think an Act of Parliament is the right way forward.

Those are the detailed points that were raised. As I said about the phraseology that comes down to us from legislation under a previous Government, there is matter for further reflection. I fully accept that just because it was there before does not automatically mean that it is the right way forward now, although the previous Government undoubtedly thought that there were good reasons for it, otherwise they would not have put it there.

Clause 7 covers four categories of passerelles—I do not want to detain the Committee by listing them all now—that cover a wide range of different passerelle devices with which we are concerned. I like to think that Clause 7 represents a clear step, which in principle although maybe not in detail has the support of noble Lords generally, towards enhancing parliamentary control over the Government’s participation in a range of important passerelle decisions at EU level. The result ought to be—indeed, the coalition Government believe it will be—an increase in Parliament’s, and ultimately the British public’s, sense of ownership of and engagement with the future direction of the EU.

Of course, in the highly sensitive areas listed in Schedule 1, as we know and have debated endlessly in Committee, the referendum lock would apply on top of parliamentary approval. However, an Act of Parliament is required in the other areas listed in the clause, which surely can only be a bonus for the public trust and accountability that we are all working towards in this legislation and in our work on the European Union generally.

[Lord Kerr of Kinlochard]

I thank the noble Lord warmly for his reply, particularly for what he said about looking again at the wording “or otherwise support”. Whatever its origins, I am sure the Government can do better and that the change would solve a lot of problems not just in Brussels but here. How would the Government advance the case for the Act of Parliament that would be necessary if the law prevented them supporting it? We are slightly in Alice in Wonderland here, and plenty of adjustments to the wording would solve our problem.

The noble Baroness, Lady Falkner, asked me a question that I do not quite understand. My objection to Clause 7(3) is based purely on its wording “or otherwise support”. My objection to Clause 7 as a whole applies in addition to the list in Clause 7(4), which, as the Minister understands, I think is a little too long. I have no objection to Clause 7(2), but I am puzzled by Clause 7(4)(c), (e) and (f). I am very grateful to the Minister for saying that he will reflect on Clause 7(3). I echo the noble Lord, Lord Hannay, in talking about the locus classicus for “or otherwise support”. The phrase is most likely to cause us major problems at the start of Clause 6, which deals with bigger issues than those that we are looking at in Clause 7.

I am grateful to the Minister for saying that he will reflect on the matter and that he will write to me about Clause 7(4)(e) and (f). I hope that he might also write to me about Clause 7(4)(c), if only to explain to someone ignorant like me exactly what the relevant passage of the treaty is all about, and why the Government would object to a move back to unanimity, which seems to me to be slightly inconsistent with their overall stance on decisions.

I do not wish for the moment to protract the discussion on whether Clause 7 should stand part.

Clause 7 agreed.

Debate on whether Clause 8 should stand part of the Bill.

[Lord Kerr of Kinlochard]

I have nothing to say except to point to the words “or otherwise support”. I will say no more than that. Those words are there in the first line, and I hope that the next time we look they will have vanished.

[Lord Bowness]

My Lords, I should hate to delay the Committee, bearing in mind that this clause stand part debate has been introduced so briefly. I have not spoken in these proceedings since Second Reading when I expressed my concern about certain aspects of the Bill, which I have to say remains. As chairman of the Justice and Institutions Sub-Committee of the European Committee—although I am not speaking for the sub-committee—I am concerned as to the effect that the provisions will have on matters relating to judicial and police co-operation. I fear that our ability to act flexibly will be compromised.

I have a question for my noble friends on the Front Bench, of which I have given notice to my noble friend Lord Wallace of Saltaire. This sub-committee has just had before it a proposal for a Council regulation under Article 352, the subject of this clause. It is about a matter as mundane as the publication of the Official Journal, which noble Lords will know is the source of the authentic versions of EU legislation and other documents. At the moment, Article 297 provides that the authentic version is the published and printed version. The proposal for this regulation is that the electronic version should become the authentic version.

I am advised that if this regulation does not become law before the passing of this Bill—if that is what should happen—an Act of the United Kingdom Parliament will be required to implement it. I have read very carefully Clause 8 and the various proposals and clauses with which this clause would comply. One such is the Act of Parliament and the other is if it is a matter of urgency, which would probably be stretching a point—my noble friends would be accused of stretching a point if they were to say that—or an exempt purpose. I do not read it as an exempt purpose, although I am open to be corrected. Do we really propose to have an Act of Parliament to implement matters as mundane as this?

--- Later in debate ---

Debate on whether Clause 9 should stand part of the Bill.

[Lord Kerr of Kinlochard]

Clause 9(4), second line: “or otherwise support”.

[Lord Wallace of Saltaire]

Noted.

--- Later in debate ---

Debate on whether Clause 10 should stand part of the Bill.

[Lord Kerr of Kinlochard]

This is getting hackneyed, but the magic words are there in the first line of the clause and in subsection (2). I have one small point of substance to make in addition in relation to Clause 10, where we have got down to reasonably light procedures—parliamentary approval by a Motion in both Houses. Therefore, my concerns are much reduced compared with my concerns about the appropriateness of the heavy provisions in some of the previous clauses. Indeed, my concerns about Clause 7 and the scope of Clause 7(4) would be more than met if the Government would consider moving some of the less significant items in Clause 7 to the procedures that we are now looking at in Clause 10. A Motion of both Houses rather than an Act of Parliament is much more likely to be right in relation to the fairly inconsequential and urgent matters that I was talking about under enhanced co-operation.

The point of substance that I want to raise comes under Clause 10(1)(c), where a procedure is laid down for the approval of decisions under Article 252 of the TFEU permitting an increase in the number of Advocates- General. There are eight Advocates-General assisting 27 Justices of the European Court of Justice. Ten years ago there were eight assisting 15, so clearly the ratio has worsened and should be corrected. The Advocates-General provide a useful element assisting the Court of Justice.

I was a member of the sub-committee of the splendid European Union Committee chaired by the noble Lord, Lord Roper. The sub-committee was chaired by the noble and learned Lord, Lord Bowness. A month ago, we recommended that an increase in the number of Advocates-General should be made as soon as possible, because that comparatively straightforward reform would assist the Court in increasing the speed with which cases could be dealt with while improving the quality of decision-making. We pointed out that there was provision in the treaty for an increase in the number of Advocates-General serving the Court and we recommended that the Court of Justice submit a request for an increase to the Council. I do not pretend that it is a very big deal that there would have to be a Motion in both Houses before we could agree. I take this opportunity to say that I hope the Government will agree and will be ready when the right moment comes to see the increase in the number of Advocates-General, which the Court clearly needs and which the UK legal profession believes it needs and is asking for.

European Union Bill

Lord Kerr of Kinlochard Excerpts

Monday 23rd May 2011 Lords Chamber

I find myself saying with recurrent regret what a tragedy it was that the European Union did not reach a concerted view on the wisdom and sense of the war in Iraq. Unfortunately, our own Prime Minister had acquired an obsession in that direction. I think that he got carried away by the excitement of receiving standing ovations in the United States Congress. That was one of the causes of the tragedy. If only the European Union had been able to unite with a concerted view, we could have saved ourselves that mistaken war. However, that is a digression. All I want to do now is suggest that we need not have the rather curiously ambiguous provision in Clause 18 and that we should endorse the Scottish question of my noble and learned friend and accept his amendment in place of that.

[Lord Kerr of Kinlochard]

It is a pleasure to speak after the noble and learned Lord, Lord Howe of Aberavon. He speaks with great authority on a number of subjects, but particularly on the 1972 Act, of which he was the father.

The noble and learned Lord causes me a little difficulty. I welcome his support for the amendment in my name and that of the noble and learned Lord, Lord Mackay of Clashfern—which is not surprising, as I am rather in favour of my amendment, and I am glad that he should be rather in favour of it, too. My position is slightly different from that of the noble and learned Lord, Lord Mackay of Clashfern, who said that Clause 18 was unnecessarily vague. I believe that it is unnecessary and vague, and I would go for the amendment of the noble and learned Lord, Lord Howe of Aberavon, calling for the elimination of Clause 18 —the Armstrong-Howe amendment.

I am against the clause because I am against declaratory provisions in principle; it seems to me that they are actively undesirable. I quote, as an authority on the subject, the then Sir Geoffrey Howe, Solicitor-General in 1972, who rejected a declaratory provision of this kind in his Bill because it would be,

“futile … and … a hollow sham ... the position is that the ultimate supremacy of Parliament will not be affected”—

by the Bill—

“and it will not be affected because it cannot be affected”.—[Official Report, Commons, 5/6/1972; col. 627.]

I agree with the noble and learned Lord. I think that that is absolutely correct.

My preference is for there to be no Clause 18. However, I strongly agree with the noble and learned Lord, Lord Mackay of Clashfern, that the vagueness of the version of Clause 18 which is in the Bill is undesirable and, I would say, dangerous. I argued on Second Reading that it was potentially sinister. I hope that I was wrong about that but I have not yet heard an answer to it.

The Explanatory Notes are not much help. They attracted the particular ire of Jean-Claude Piris, the then head of the Council Legal Service, in the memorandum from which the Minister made a perhaps selective quotation. Piris said that the intention behind paragraph 104 of our Explanatory Notes “is not crystal clear”, which is a very elegant way of putting it. The Explanatory Notes say:

“The words ‘by virtue of an Act of Parliament’”—

not the 1972 Act—

“cover UK subordinate legislation made under Acts, and because of the particular context of this clause, also cover Acts and Measures of devolved legislatures in exercise of the powers conferred on them by the relevant UK primary legislation”.

I do not understand that. That all derives from the 1972 Act, which is all you need to cite. Because of the 1972 Act directly applicable law applies in this country. It applies even in areas where the authority has been devolved. The 1972 Act is still the fundamental basis for all this. If we have to have a Clause 18, it should refer clearly and precisely to the 1972 Act. I thought it potentially sinister because the loose phrase “an Act” could be construed as referring to future as well as past Acts. The reference to the 1972 Act is only implicit and not explicit as the clause stands.

On Second Reading I wondered whether it was some kind of a dog-whistle or signal to those who would like us to be able pick and choose, to apply or disapply particular pieces of EU law depending on whether we like them. Of course, the Government know that that is not possible. Their notes say that nothing affects the primacy of EU law. The addition to the text suggested by the noble Lord, Lord Hannay, would say that explicitly in the Act. Why go for such vague wording? Why have something that is open to the interpretation that it might cover future Acts? I withdraw the word “sinister” as that goes too far, but I will settle for the words of the noble and learned Lord, Lord Mackay—“unnecessarily vague”, and add unnecessary. I believe that Clause 18 is unnecessary and unnecessarily and dangerously vague.

[Lord Willoughby de Broke]

My Lords, I hesitate to introduce an inquiring note to this love-in. I do not know whether noble Lords have read the Commons European Scrutiny Committee report on this Bill, which has some interesting things to say on the principle of parliamentary sovereignty, having listened to a lot of legal evidence.

I draw the Minister’s attention to what that report says in paragraph 76, as it might help him. The committee states:

“We think it right that, should an Act of Parliament instruct the courts to disapply an aspect of European Union law, the courts should do so: this is not only consistent with the case law of the courts, but also with the doctrine of the legislative supremacy of Parliament; and also with the rule of law.

As I said on Second Reading:

“Encouragingly, the committee goes on to conclude that it is entirely within bounds for Parliament to ask judges to disapply any aspect of European Union law if that is the will of a democratically elected Parliament, even if—this is important—that were to lead to infringement proceedings in the EU Court of Justice”.—[Official Report, 22/3/11; Col. 699.]

There seems to be a divergence of opinion. Who is right—those who say EU law is supreme and should be within the Bill as the amendments suggest; or is the Commons European Union Scrutiny Committee right? It presumably has had legal advisers to instruct them as well. I suppose that we ought to take account of the fact that the French Government threw out the Romanian Gypsies, which must have been contrary to EU law. However, as far as I know, no infringement proceedings were taken. Even now, the French and Danes are ignoring the provisions of the Schengen agreement, which they signed, and are putting in place border posts. As is well known, the French stopped a train from Italy that contained Tunisian emigrants who were given some sort of EU passe-partout and were supposed to be allowed into France. The French police stopped the train and would not let them in. Denmark has reinstated full border controls to stop immigration. Therefore, the argument about the complete supremacy of EU law does not any longer hold. I will be interested to hear what the noble Lord or his advisers say about this in response to the amendments.

European Union Bill

Lord Kerr of Kinlochard Excerpts

Monday 16th May 2011 Lords Chamber

[Lord Kerr of Kinlochard]

I agree and disagree with the amendments. I agree with the concept of proportionality which underlies them, and I think that we need to relate what we are doing to the real world. I do not like the complication that is built into these procedures, largely for the reason that the noble Lord, Lord Waddington, has just given. We do not need the additional commission to advise us. As for the Joint Committee of the two Houses, I do not know why we need that either, because the expertise is here. We need to reinforce parliamentary sovereignty. What worries me about the Bill—and is in conflict, as I understand it, with the coalition agreement and the terms read out by the noble Baroness, Lady Falkner—is that it takes away from parliamentary sovereignty by moving towards a plebiscitary democracy.

I shall illustrate my point about the real world with a couple of examples. I like the amendments not because they introduce complication but because they introduce the concept of urgency. In the real world, the very elaborate procedures that we are laying down might not fit very well. The examples that I take are in Clause 6(5)(e) and (j). Paragraph (j) states that we would require a referendum for,

“a decision under the provision of Article 333(2) of TFEU”.

That would permit using qualified majority voting for the following article:

“Expenditure resulting from implementation of enhanced cooperation, other than administrative costs entailed for the institutions, shall be borne by the participating Member States”.

Let us say that we had an enhanced co-operation activity, such as conflict resolution or election monitoring, involving less than the total number of member states. Such enhanced co-operation is governed by Article 333(1), which states that it needs to be within the framework of the common foreign and security policy. Article 333(3) states that the activity should be paid for by the member states taking part in it. It is possible to envisage, because it has arisen before, countries that did not feel particularly muscular militarily but wished to contribute. Germany has several times in the past been in that position; that is, it has been prepared to stump up but not send people. The decision that the Germans should be allowed to pay would require a referendum in this country under Clause 6(5)(j). The whole action would have to stop or, rather, the Brits would say, “No, I’m sorry, we can’t have your money, because if we took it we would have to have a referendum on it”.

This is not the real world. It cannot be right. Let us remember that the provision is not about the voting rules. Paragraph (j) is different from the reference to the same article in the schedule. Schedule 1 states that there would need to be a referendum if the voting rules were changed under that article of the treaty. In this case we have a specific decision on how we are going to finance this week’s expedition somewhere. Do costs lie where they fall? Germany says, “No, we would like to stump up. We think others should be contributing”. The Brits have to say no. The real-world consideration, which would be helped by the amendment of the noble Lord, Lord Liddle, is relevant here.

My second example relates to paragraph (e), which is about the euro. We all know what would happen if we were one day to decide to join the euro: the Act would go through this Parliament; it would be followed by a referendum; and if the result of the referendum were yes, the Minister would fly to Brussels to take the decision referred to in the Bill under Article 140(3) of the TFEU to make the euro the currency of the United Kingdom. Article 140(3) states:

“The Council shall, acting with the unanimity of the Member States whose currency is the euro and the member state concerned, on a proposal from the Commission and after consulting the European Central Bank, irrevocably fix the rate at which the euro shall be substituted for the currency of the Member State concerned”.

That is the decision—and our Bill is about what we do with decisions.

The decisions have to be brought back here in draft and have to be the subject of an Act of Parliament and then a referendum. But hang on—we have had the Act of Parliament: the issue upon which we wanted a great national debate and a referendum was on whether we should join the euro. The Bill states that the Minister cannot vote in favour of or otherwise support the draft decision about the rate. If we have a referendum on a Thursday about whether we should join the euro, we will know the answer on a Friday; the Chancellor of the Exchequer of the day will get on to his colleagues, the ECOFIN will meet over the weekend and the rate will be set before the markets open in Tokyo at three o’clock on Monday morning—it would have to be because the amount of speculation would be enormous.

This is a small technical point but we need to look at the drafting of the Bill to ensure that we do not create an unworkable monster in the real world. We know what should happen—the sequence is Bill, Act, referendum, decision—but we will not know at the time of the referendum what the rate will be; by definition it will be different on the day from what it was during the referendum campaign. So there is something wrong with the drafting of Clause 6(1) and (5)(e).

We can get it right and I am not arguing that there should not be a referendum on joining the euro. However, I am arguing that there should not be a referendum on some of the extremely minor items in the Bill, such as the one covered in paragraph (j) about enhanced co-operation and its financing.