European Union Bill

Lord Waddington Excerpts

Tuesday 3rd May 2011 Lords Chamber

Moved by

[Lord Waddington]

23ZB: Clause 4, page 4, line 3, leave out paragraph (a)

[Lord Waddington]

My Lords, I will not detain the Committee for very long. At first sight one might think that this amendment was a bit of a fuss about nothing. Why should anyone fuss about the codification of the practice of an existing competence? However, when one comes to examine the matter, the implications are serious. They were spotted by the House of Commons European Scrutiny Committee, which reported in these terms. It said, referring to the exception in Clause 4(4):

“In our opinion, this exception is significant: it would cover the practice of EU institutions pushing at the boundaries of their competence (competence creep), sometimes supported by judgments of the ECJ, and subsequently codified in a revision of the Treaties”.

I give your Lordships a simple example of what I am talking about. We are talking about, for instance, converting a non-binding intergovernmental agreement, which can be revised or revoked by another simple intergovernmental communiqué, into a treaty law which can never be changed except with the unanimous agreement of all member states. We are talking about what is in effect a transfer of power or competence because we are enshrining in the treaties an obligation that was not in them before. All this is not fanciful: conversion of simple agreements into what is to all intents and purposes permanent and irreversible Community law, backed up by sanctions against backsliders, has happened and does happen. In particular, parts of the Lisbon treaty were justified as mere codification of practice.

For instance, our own European Union Select Committee, in the 10th Report of the 2007-08 Session, on its assessment of the impact of the Lisbon treaty, found that new Article 43(1) of the Treaty of European Union, inserted by Lisbon, which set out the task for which the EU could deploy military and civilian missions under the common security and defence policy, codified in the TEU the tasks that had been agreed by member state Governments in 2003, as part of the European security strategy. However, the wording of the report, which I have here, hardly demonstrates that the committee had a clear understanding of what was happening. Rather surprisingly, at paragraph 12.127, the report stated:

“The Treaty will not change the scope of the CFSP or transfer any additional powers to the EU in this area. The new provisions in the Treaty could lead to a more active role for the EU in the area of CFSP, but much will depend on the degree of consensus among Member States regarding such a role”.

In fact, a non-binding intergovernmental agreement that could have been revised at any time by a simple intergovernmental communiqué was becoming virtually irreversible treaty law. It was not a mere codification, but a clear example of well concealed competence creep.

We are not debating whether the common security and defence policy is good or bad; I am pointing out that Clause 4(4)(a) would allow the conversion of a non-binding practice into binding and irreversible community law. The Bill is saying that when that happens, there is no need for a referendum.

Finally, the amendment and the situations that I have described should make us wonder whether the provision in the Bill for referendums, far from being an attack on parliamentary democracy, may mean that Governments have to take more care to ensure that they are open with their own Parliaments as to the implications of proposals, because of their statutory obligation to hold referendums, if there is a transfer of power or competence. I shall certainly not press the amendment to a vote, but I hope that Select Committees will in future be alert to the possibility of new law being made under the guise of codification, and report accordingly.

[Lord Dykes]

I apologise for interrupting. Can the noble Lord give any other examples, apart from the CFSP?

[Lord Waddington]

That is the example that comes to mind. There are three or four of them in the Lisbon treaty, but I do not have that information and, unfortunately, I cannot give it to my noble friend, but I will write to him, if he wants it. There were two or three other occasions; I am not saying that they were earth shattering, but it is alarming that the Select Committee did not spot that new law was being made here. That is the point I am making. It is alarming that new law could be made without holding a referendum, and it is doubly alarming that one of our expert Select Committees in this House did not spot what was happening on that occasion. It should not happen in future.

[Lord Hannay of Chiswick]

As a member of the EU Sub-Committee that was the author of that example, I should enlighten the noble Lord on the process. First, what he has said in the past few minutes is based on an interpretation that is a complete fantasy, whereby if this Government and country are party to an intergovernmental agreement, they can walk out of it when they like. They cannot do that. It is a matter of good faith and the law on treaties, and you cannot do that.

The noble Lord is quite right to say—and the text he read out demonstrates this—that we were perfectly well aware that the CFSP and the ESDP were being shifted from an intergovernmental basis on to a treaty basis. That is what we said in our report, but the key point was that the provisions for taking decisions within the Lisbon treaty in this area require unanimity, and there would be no surrender of powers or competences whatever. I am sorry—I will speak to the amendment in a moment, but I wished to correct that point.

[Lord Waddington]

With the greatest respect to my noble friend, he is in error. There was an intergovernmental agreement. You can say that that gave a competence to the EU, but it could have been withdrawn in a moment by just a communiqué between the member states. The noble Lord is surely not saying that it was a matter of insignificance to transfer an intergovernmental agreement into cast-iron treaty law. He is surely not saying that the report from which I read out made clear to its readers that, in fact, new law was being made on that occasion. The report does not say anything like that. It was certainly not a clear statement that an intergovernmental agreement was being transferred and converted into community treaty law.

[Lord Radice]

I thank the noble Lord for giving way, but what the noble Lord, Lord Hannay, made clear was that this position, even if it is in community law, is protected by veto. I do not think that the noble Lord, Lord Waddington, understood that.

[Lord Waddington]

That is nothing to do with the case that I have raised. I am saying that the Bill deals with all sorts of situations where it is said that there is a transfer of competence, and that there should therefore be a referendum. I am pointing out that, in this clause, what is dressed up as a mere codification can often be a transfer of competence and the conversion of an agreement between members states that could be altered at the drop of a hat into binding treaty law. That is what I am talking about. I beg to move.

[Lord Lamont of Lerwick]

My noble friend Lord Waddington is to be congratulated on and thanked for raising an extremely important point on which I should like the Minister’s reassurance. I should like him to address the points made by my noble friend.

Of course I understand that the Bill deals only with future treaty change, not the existing provisions of the treaty. If a power of competence has already been conceded to the EU from the UK, the decision obviously cannot be reversed by the Bill. Under it, codification does not require a referendum in any case, including a codified transfer of power or competence. Why? I know that the Government’s argument is that if codification takes place by the granting of a formal treaty base for an action, the transfer of power has already taken place, either under the treaties or through a different general article, such as Article 352.

However, the point that the noble Lord, Lord Waddington, raised is important. I know that some members of the Committee dislike the phrase “competence creep”, but a transfer of powers could happen through codification and the interpretation of existing treaties. I return to the point to which I referred previously, when challenged by the noble Lord, Lord Tomlinson, about an example of competence creep. I cited the use made of Article 122 of the Treaty on the Functioning of the European Union to set up the European financial stability mechanism. That article, as many Members of the Committee are aware, states that financial assistance can be granted to a member state where the state is,

“in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control”.

It is very difficult to argue that the case of the financial difficulties which Portugal got into were a natural disaster or entirely beyond its control. At the very least, it seems to me that there was a significant failure of regulation, and, other people would argue, of budgetary and other policies as well.

I do not want to go into that but, to many people, that seemed a bizarre interpretation of Article 122(2). It is that sort of thing that gives rise to the anxiety that the noble Lord, Lord Waddington, articulated. Of course I understand that there is a case for codification and that it will be necessary. Perhaps a significance test could be allied with that when assessing whether codification could be misused in that way. What the noble Lord, Lord Waddington, said, is not a fantasy or an imagined danger—it is very real when one looks at how legislation has happened in the past.

[Lord Brittan of Spennithorne]

With great respect to my noble friends Lord Waddington and Lord Lamont, I do not think that they are correct in this case. The test of what is codification and is therefore excluded from a referendum provision is an objective one. It does not depend on the procedures used to achieve the codification; it depends on whether there has been actual codification or something going beyond it. Codification, in the normal use of the word in English law, which is how the provision would be construed, means not a change in the law but the assembly in a convenient form of existing law. Of course there can be room for argument as to whether in a particular case there has been a change or merely a codification in the sense of an assembly of existing law, but the test is an objective one, not what procedure has been—

[Lord Waddington]

I—

[Lord Brittan of Spennithorne]

Just one moment—not the way in which that has come about either in this country or elsewhere. In the last analysis, the test of whether what has happened is codification and is therefore exempt from a referendum would be applied in the normal way by the British courts applying common-law principles.

[Lord Waddington]

Is not my noble friend at loggerheads with the noble Lord, Lord Hannay? The noble Lord, Lord Hannay, was arguing a short time ago that there was an existing competence. It was not at that time enshrined in treaty law but, as the result of an intergovernmental agreement, there was a competence. Clause 4(4)(a) refers to the codification of a practice in relation to the present exercise of an existing competence, so I think that I am right and that my noble friend is in error.

[Lord Brittan of Spennithorne]

I do not think that that is the case. The question is: is it codification or not? That is the question, not how it has come about. If it is not codification but the creation of a new law, the provision exempting the requirement for a referendum does not apply. If it is codification, which will be determined by an objective test applied by British courts in accordance with normal common-law principles, it applies. That would mean that there has been no change in the law of England, however that may have come about.

[Lord Waddington]

Is my noble friend therefore saying that in the new article inserted in the treaty by Lisbon there was in fact no codification, although it was stated to be a codification?

[Lord Brittan of Spennithorne]

I am not making any statement about whether or not any particular provision was codification. I am talking about the correct interpretation of this provision in this Bill with regard to the future, which determines whether or not a referendum is called on the question. The test is an objective one: whether what occurs in future amounts to a codification, however it has been achieved, or goes beyond a codification and involves a change in the law. It is as simple as that.

--- Later in debate ---

[Lord Hannay of Chiswick]

My Lords, I will now argue against the amendment on substance, having dealt with the ancient history to which we were all subjected previously; I do not want to go back on that.

A common-sense application to the amendment would lead one to regard it as bizarre. The object appears to be to ensure that if the European Union, with the agreement of the British Government—which is required under unanimity—conducted an act of genuine codification, we would have a jolly referendum about it. All I can say is that if noble Lords really want to go around this country stirring up apathy about the codification of some obscure piece of European law, common sense has flown out of the window.

The amendment is being moved, and support for it being given, on the basis of fear that a British Government will not know enough about the process to distinguish between a real codification and—in the parlance of noble Lords who support the amendment—competence creep. It is not sensible to add to the 56 other matters, to increase the number of referendums on a subject on which it is frankly just not credible that you could have a sensible political campaign involving the whole electorate of this country. I am not in favour of that.

[Lord Waddington]

I hope that the noble Lord will appreciate from the very fact that I am not pursuing the amendment that I use it as an opportunity to point out the severe error committed by members of his Select Committee when it carried out its study into the impact of Lisbon. I hope that he will always bear that in mind in future and that the error will not be repeated.

[Lord Hannay of Chiswick]

I am afraid that the noble Lord is going to be disappointed.

--- Later in debate ---

[Lord Howell of Guildford]

I do not think it is possible to quantify what will happen, what is happening or what has happened. Codification has occurred from time to time and I described one or two instances where it has occurred. There have been more. I would love to be able to say to the noble Lord that it has happened 15 times and it will happen 15 more times, but that would be completely unrealistic. I have no idea how it will occur, but it is important to ensure that we understand what genuine codification is. It will occur again and, as my noble friend Lord Brittan said, it is an objective legal concept but it is a bit like an Omega wrist watch that seems to be genuine but turns out to have nothing inside. There are non-genuine codifications and we have to watch very carefully to see that they do not join the genuine move towards competence creep, which is a phrase that people do not like. The phrase that people like in relation to the European Union is “knowing where they stand”, believing, as I think the majority of people in this country do, in the value of the European Union but feeling thoroughly uneasy about it continuing to take too many powers away from the nation states. Most nation states in Europe do not want that and we do not want it either.

[Lord Waddington]

I beg leave to withdraw the amendment.

Amendment 23ZB withdrawn.